hey, time for what we learned today. william, what did you learn? >> i learned that being a republican can be very treacherous in certain parts of the world. we learned from our author today. >> i think he's right. mike barnacle, what did you learn? >> also, i learned that people on the right have a sense of humor, people on the left have no sense of humor. >> come on, man. far left. far left. far left. >> angry left. >> what did you learn? >> i'm told that all republicans are not evil.

>> still working through those feelings. >> i finally discovered my husband has something in common with the republican party. >> that was mean. >> smoking. the smoking e-mail. >> he says i'm an idiot. >> and i've learned that there's somebody up here that does give a damn about the troops in combat. i'm not going to tell you which one it is -- >> you don't care about the health of americans? >> he's wearing a pink sweater. it is "morning joe." dylan ratican takes over right now. >> that's the meeting. good morning to you. no desk cleaning, thank you, mika. joe, you just stay away. you just walk away slowly. welcome. walk away. walk away. topping our agenda today -- i love you from a distance -- the winners and losers in the

emerging health care bill. we'll get some details on what's coming out of the house, what's going on in the senate, who wins, who loses. insurance, patients, doctors, you know the story. more information on the secret cia plan to have hit teams take out al qaeda leaders. was that a secret? our question, why couldn't four separate cia directors over an eight-year span get it together to actually do this? then sarah palin appealing to the common man. is her path for a white house run in fact more grassroots than barack obama's was? some recent data on fund-raising suggests she's twice as powerful on the grassroots fund-raising front as our current president was in his campaign. then finally, confirmation hearings of judge sonia sotomayor, facing a third day of grilling by lawmakers. it is 9:00 a.m. in the east, 6:00 in the west. the morning meeting starts right now.

we'll do cia, we're going to do a whole variety of conversations. paulson's testifying in a minute. we'll talk about his view of what should be disclosed to the american people and what shouldn't about the banking system, federal reserve. fertility i think is coming up at the meeting later. health care is the agenda. three house committees ready to vote on the reform bill. we already have something coming out of the house. the senate preparing to come up with their own version of things. nbc news political director and chief white house correspondent chuck todd has the full reporting. >> reporter: i think the big issue today is we're still missing one voice from the health care debate on congress, and that is senate finance committee chair can max baucus. we have heard from everybody. we have heard from the house and all of their committees. we have heard now from chris dodd and the senate health committee with their bill that came out. now the last remaining piece of this congressional puzzle to try

to figure out when is this thing going to go through and what are the different funding mechanisms and the single-most important person on this issue on the hill is max baucus. there has been amazing public silence from him, from his committee on his bill, what's it going to look like, what are the different funding mechanisms. it's creating a sense of frustration on both sides of capitol hill, on both sides of pennsylvania avenue among democrats, dylan. >> what do you think he's doing? >> well, he's trying to come up with different funding mechanisms that he still wants to have a bipartisan plan. one of the things about the senate finance committee that max baucus and ranging republican chuck grassley from iowa, they do everything in tandem. he does not yet have grassley's okay to go ahead with this on a partisan line. as you know, the senate health committee voted along partisan lines, they got that bill out of committee with no republican support. that's something that baucus is always hesitant to do.

he's got one person he can probably get to make it bipartisan and that's olympia snowe, the republican from maine. >> before i bring the rest of the panel in on this, quick and dirty, chuck, what's in the bill? the house bill that has already been presented, key highlights and kilolights. >> i think the key highlight that it's everybody here is how to fund health care reform. this idea of surcharges. one thing earlier this week the president reiterated the pledge on not raising taxes on those that make $250,000 or less. what's that mean? to come up with the funding gap that was missing here, anywhere from $300 billion to $600 billion, depending on the different health care bills, the house bill is talking about a millionaire surcharge of 5% or no more, gradually going down to 1% to 1.5% to those making $300,000 or above. i think there is another marker at $350,000. that's obviously taking up a lion's share of the public debate. i would caution folks, don't get too attached to what that house

version of the funding proposal is, because i don't -- that thing may not fly in the senate and that's why waiting on max baucus liis the single-most important part of this debate at this point. >> eliot spitzer joins the conversation for the balance of the meeting. nice to see you. gavin pilone, tv and film producer, old friend of mine joins us from los angeles. ezra klein, "washington post" reporter, writes one of the most widely followed blogs on economic and domestic policy, specifically to health care. ezra, start us off. what is your sense in a nutshell of where the balance of the costs against beyond the tax aspect, if you look at doctors, how do private insurers fare, how do drug companies fare, winners, losers and interpretations of what you know so far. >> sure. i think what they're trying to do is not make anybody pay a lot of cost. ones who will suffer the most, if they'll suffer at all, are

going to be the insurers, they're the least popular and somewhat the least essential. you can't do much without the doctors because you need drugs, you need hospitals but you don't necessarily need insurers in their current role. they are making the largest concessions, allowing community rating which means they can't not give me health insurance because i had allergies two years ago. they have a guaranteed issue which means they have to give it to you if you can pay for it, on and on. the the folks who will win the most here are the uninsured, are people with fairly low incomes, people who would be eligible for medicaid, people who would be eligible for subsidies. all that cost chuck is talking about, he's absolutely right, that's where the key controversy in the bill is right now, it is all the pain for folks on that end of the income spectrum. they'll come out of this with a lot better health care situation than they went in. >> governor, it is an admirable undertaking. before we get into the nitty-gritty of this, the fact as a country once again we are attempting to acknowledge the broken aspects of our health care system and desire to make it better, fantastic.

>> absolutely. >> with that said, this is the house version is a first attempt. obviously they achieved a portion of the goal. the question is are they addressing -- do the losers have the power whether it is private insurers, drug companies, small business owners, or the rich who will pay the taxes? >> let me make this point. as shob was there trying to figure out how do we restructure this, i would say we have patients, doctors, hospitals who provide essential services or benefit from the provision of services. insurers do nothing other than move money around, why are they making so much money. shouldn't we be able to squeeze the percentage they are taking out -- they're the ones who get rich, everybody else suffers. it made no sense. every effort of reform, however, leaves them in a position no matter what we do where they do very well. we haven't really figured out how to squeeze that role and take them out of the equation. we should, because they don't provide what we care about which is health care. having said that, i think ezra is right structurally. every time we go forward with a

bill like this we end up spending more than we think we will and saving less. i'm a little less sanguine than he is that private insurers will suffer as we go forward, even if we have a public option. still, private insurers will have the -- most of the insurers will be provided -- >> so how would you adjust either the house proposal or some other proposal to more effectively diminish the amount of money available for health insurance companies who currently wield so much power? >> i'm not sure -- i don't think that is the objective honestly. the first objective here is to provide coverage for the 47 million who couldn't have it. the second objective, how do we control the rate of increase of spending in the health care system. there is a lot of chatter about it but there really isn't going to be as much attention to that because coverage is priority one, as it should be. what's killing the economy long-term is the increased cost. you really want to do something dramatic.

single payer is the answer. we can do it more efficiently. no reason to have all these multiple parts. finally bite the bullet and do what needs to be done. >> gavin, you out there? >> yeah. >> good morning. >> i'm getting angry listening to all of this. >> let it rip. pick up your sword and join the battle, my friend. >> the biggest loser is me, people like me, small business owner. okay? small business drives the economy. our big businesses that we're very proud of in this country, like microsoft, like oracle, they started as small business. i own a restaurant. you've eaten there. >> i enjoyed it. >> that's your own health care problem right there. okay. we employ 50 people. we're doing pretty well in this economy for a restaurant. the worst time to own a restaurant since the great depression but we're doing pretty well. >> that's a good burger you've got. >> it's called the waffle, sunset boulevard. >> all right. go ahead. >> we employ 50 people, we're doing pretty well. flat is the new up in the restaurant business right now.

we're thinking, hey, there are a lot of opportunities, maybe we should open a second store. the government says, i'm going to impose a surcharge on you for health care. i think maybe that's okay. not only that, i'm going to hit you with another 5.4% income tax to pay for other people's health care. i'm getting a double whammy on this thing. plus my taxes i know are going up in 2011 when they repeal the bush tax cuts. the people who are -- hold on. the people who are going to drive the economy are people like me who want to invest in business. right? i now am not going to have to reconsider opening another store which will employ another 50 people. those 50 people that might have been hired are now also going to be losers because small businessmen like me have too much pressure put on them by the government. >> hold on, gavin. >> gavin, are you fundamentally right. job growth comes from small businesses. the entire economic revitalization plan over the last two years, doesn't matter which administration it's been geared toward, big business, giving them all the money,

that's why cit will go bankrupt, goldman sachs makes more money than they've ever made before. to see this only through the prism of health care is perhaps not to understand the magnitude of the problem. when this comes to health care, we must bring everybody into the system. we must have a mandate that says everybody has to be -- to have insurance otherwise the system doesn't balance, it doesn't work. the only way to do that is to have a mandate. it is working in massachusetts to a certain extent, you have to work it through carefully but it will work long-term. splems the problems of small business have to be addressed carefully. we've begun the conversation on health care. chuck, thank you. gavin, stay with us for the duration of the meeting. eliot as well. ezra, thank you. contessa, what's going on? we are watching another big story this morning here, dylan. "the washington post" is reporting the cia was on the verge of activating that plan to plain anti-terror assassination squads when cia director leon

panetta learned about it and shut it down last month. the plan to use the hit squads to kill al qaeda leaders actually had been off-and-on for years. it was put into the works after 9/11. reportedly kept secret at the direction of then-vice president dick cheney. at the time, cia director george tenet reportedly could not get the program off the ground, scrapped it in the spring of 2004, he said there was a lack of targets, there were problems with other practical details. and then porter goss took over and brought back the program. it never got going under him either. ap reports that by this time the cia was relying more on predator drones, the use of foreign intelligence, to go after al qaeda. so the program remained technically alive, but during makele hayden's time, the cia director, but finally killed by current director leon panetta last month. now congress may order an investigation to see if that program was close enough to be active, operational, to have required the cia to tell lawmakers about it.

dylan, they are saying at this point that under this directive signed by president george w. bush they were not required to inform congress about this plan to go after top al qaeda leaders, osama bin laden and others. >> i'm not educated on the subject so i give a simplistic analysis. so forgive me, but is it -- how is it a secret that we were trying to kill al qaeda leaders and how is it that i thought we were trying to do that going back to when donald rumsfeld wrote -- an open letter in the "new york times" going back to september 11th where he said, listen, we're going to try to go kill al qaeda leaders, and now we couldn't even get it done to kill al qaeda -- this confuses me. jack wright, former cia agent, joins the conversation. your ability to deliver insight on one hand very good, but i suspect on the other hand not so good. you understand my -- why i'm perplexed. i feel like we're making this big deal an cheney has a secret, oh, my goodness, what were they

doing? i'm thinking, my god, we're going to invade canada. i find out, no, he just had a list of al qaeda leaders which he wanted to kill which i thought we were trying to kill al qaeda leaders going back to september 11th. >> i think the bottom line is about transparency and oversight. the 1947 national security act requires the cia to brief congress on operations that are taking place or are getting close to being -- taking place. maybe that's the ultimate question, the question of definition on sort of what is operational. yes, there is no question, this is not about whether or not we decided to kill al qaeda leaders. this is about making sure that congress is aware of operations that are taking place. law says they have to do it. it is just that simple. >> but they're saying this was never operational. >> well, see, now -- >> that tells but the competency of our cia, with all due respect. if we can't get operational a plan to kill al qaeda leaders in eight years, what can we do? >> you're right, but this is one thing that makes it interesting to me. representative hoekstra, again the republican out of michigan, has already said $1 million was dropped on this program. these guys were literally just sitting around a table drinking

coffee and soda, then for whatever reason, where did the rest of this money go? if this wasn't an operation, what was it? that really is the question, too. there is a lot of things that people are trying to understand. >> jonathan capehart, are you there? >> good morning. >> good morning. >> "the meeting"'s under way, as you can tell. you heard my question? >> no, i didn't. >> my question is -- why could they not get this program active? i'm not concerned that they were keeping it a secret. i'm concerned that the secret program which strikes me as not much of a secret if it's killing al qaeda operatives was never implemented? >> wait a minute. we don't know -- >> fair enough. >> one, we don't know if the program got off the ground and was officially a program and that it killed anybody. i think what we've learned over the last week, as bits and pieces of this program come out, is that it was something that was devised, something that they were i guess sitting around a table, like yours probably, trying to figure out what they could do to go after these al

qaeda leaders. >> are we still going to figure out how to use the top of this thing? >> but the point is -- >> same problem. >> right. it never got to the point where, i guess the folks in the cia figured that they didn't need to tell congress. and from our story today in the paper, what it tells me is that the process was working. when it was realized that they wanted to get moving officially, they went and told the cia director, in this case leon panetta. leon panetta heard it and said, i don't think this is a good idea, in fact i need to go to congress and let them know. to me that's the silver lining in all of this. last week we were talking about how the cia potentially rogue elements in the cia were trying to override the will of congress, and instead what we're realizing is that the gears and apparatus is actually working. >> but guys, there is a question here. the question is, if george tenet is the one who shut this down originally, then porter goss

said, no, no, we'll try to keep this again. general hayden said we'll try to keep this again, if you have this thing rolling for five, six, seven years, on and off, at what point do you say it is just beyond the preliminary stage? that's a fundamental question. there is an obligation to congress to say, we got to watch what we're doing. >> dylan, i think your take on it is exactly right. the first question is should they have cold congress. everybody will say, sure, at a certain point they should have. we can let lawyers figure out where that threshold us. we are fighting two wars. why couldn't the cia get this right? we couldn't we figure out where to go, where to do it and where these guys were? that's what the cia is supposed to do. >> that's the question. we'll take a break. gavin, i'll get new here. we'll pick up also on the fed. federal reserve said the economy is in fact sinking not quite as fast, as slowly down is the new up. back with that conversation after that. plus, sarah palin path to

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welcome back. nice to see you. what's going on? >> good morning. dylan, we are getting somewhat of a mixed report here on the economy and where we're heading. >> you don't say? >> no, no. here's what we have. >> surprise, surprise. >> the fed says it expects the economy to shrink at a lower slower pace through the end of the year by 1.5%. >> slowly down is the new up. >> that's the glass half-full kind of thing. right now the unemployment rate is at a 26-year high. stands at 9.5%. more than 7 million people have lost their jobs since the recession began in december 2007. we just got a report in the past hour that finds first-time unemployment claims fell sharply

last week to 522,000. that's the lowest since early january. that's the glass half-full news. the fed expects though the jobless rate to climb to 10% by the end of this year. that's the glass half-empty. and predicts it won't drop until -- drop to 8% until the year 2011. if you really want some good news, jpmorgan chase just reported today sizzling earnings, raking in $2.7 billion in profits, a 36% jump from a year ago. jpmorgan got a $25 million bailout. it paid the money back, by the way. >> i worked for bloomberg almost ten years, cnbc obviously almost for six years. part of my job is to ask people what they think's going to happen. is the stock going to up? is the economy -- basically everybody that i ever interviewed, el liot, gavin, contessa, folks at home -- jonathan, hi -- they always predicted it was going to be better.

it was in the next six months it was whatever it was. then after six months they say it is going to be fantastic. house prices are going to be up. stock prices are going to be up. whatever it is. at what point do we stop trying to invest in false hopes -- not that it won't get better -- and start to admit, we don't know. we have no idea what's going to happen. >> dylan, are you so right. virtually every prediction over the last year has been fundamentally wrong. the reason for that is that we are using old data based upon an old principle, an old understanding of what the economy was doing and clearly things are changing in a fundamental way and not changing for the better. your bad news in terms of the unemployment is horrendous news. it is not 9.5%. when you bring in the marginally unemployed, those who haven't looked in the last four weeks aren't counted. the bureau of labor statistics says they aren't really looking for jobs. they aren't looking because they can't find them. we've seen the manufacturing

sector of our economy dropping, hourly wages dropping, we are in an unemployment disaster. i'll give you an unfortunate take on morgan chase and goldman sachs. we've given them an infusion of taxpayer money, trillions of dollars, they're becoming proprietary hedge funds, playing the market, it goes up, it goes down, they make money either way. that capital is not being used, not going to small businesses who can invest, build, create. it is going into hedge funds that aren't be productive in terms of capital-building sectors and creating. >> this is the thing i feel policymakers either don't understand or do know what to do about it. we allow this capitalism functions when capital, money, is available to contessa, to you, to me, to kids in the midwest, to kids in the south, to kids in the west. old people, young -- to start to pursue an idea. the more we basically trap capital and suck it in to systems that don't allow it to

circulate, the fewer jobs there are, the less economic activity, the fewer gavin polones that are opening restaurants. do our policymakers understand fundamentally what they are doing when they redirect policy to steer money into those places? >> well, dylan, it goes back to what eliot just said, in terms of the predictions that have been made over the last year, no one knows what they were talking about or what they're predicting. i think folks, particularly policymakers on capitol hill, remember when all of these changes and new policies were put in place, folks in washington were beside themselves over what to do about the economy. the economy was in free fall, and so they figured it's better to do something than do nothing. so if that meant going to the old play book and trying to -- >> so i've heard that a million times and it's valid, i understand it. i say, yes, i get it. i understand. but -- doing something instead of nothing to stave off

disaster -- in other words, if contessa falls over backwards in the chair, yeah, we'll try and catch her to presilent hvent he hitting her head. but the mere act of trying to save someone from a dire situation does not solve the problem of why the situation occurred in the first place. we continue to be in a situation where the rescue package that was devised last fall for the banks, for the economy, for whatever it was, was deployed with some success and some failure. but there still is not a conversation about how did we build the system of banking and policy in this country such that it was vulnerable to a collapse of that magnitude? and that is the conversation. >> dylan, the problem there is they still have not confronted the too big to fail problem. we're seeing it play out again. soldma goldman, citi, chase, all got money. when we were saving the

financial system supposedly by bailing out goldman and all the rest, we should have said the game of "too big to fail" is over. the "wall street journal" got it right yesterday when they said we've got to control what we've done here. >> originally when you go back to monopoly law, rockefeller, carnegie, there is a point where the government steps in and says capitalism has now -- >> can we have one more data point? the chinese economy is growing at 8% a year. why is it that they, overseas economies and india i believe has something close to that, why are those economies bouncing back so quickly and our infrastructure is failing terribly? >> what's the quick answer? >> the quick answer is i don't think they went through the housing crisis which as so depleted the assets of our consumers. we don't make anything to export and all we have now are these services that are no longer marketable. >> by investing in green technology, and there was something to export in the future -- >> that's a five-year process. >> but still, even if you look at long-term plan --

>> is that you, gavin? >> that's me. >> go. >> there is a big thing that we also do know that's going to happen in the future. they're inflating the deficit wildly, beyond anything that anybody's seen since world war ii. they're inflating the money supply meaning that the value of the dollar is going to go down. there is going to be consequences for that. on top of adding to the unfunded medicare liability going forward. this is going to lead to two things -- higher interest rates and inflation, and higher taxes because we're going to have to deal with it. if you take the capital out of the system through higher taxes from people like me, then they're not going to invest in business and then the job growth is going to stop and we are going to have more people unemployed. if interest rates go up, people aren't going to be able to borrow, they aren't going to be able to start new business and there is not going to be more people employed. if inflation goes up, same kind of thing. they are just spending willy-nilly. all of those people who are making those decisions have never had to make a payroll, never signed a long-term lease. they've all come out of academia

or government and don't understand what it is like for people like me. >> what i would say to that, i think it is time -- this is the reason we even have this meeting for that matter -- to empower the voters and educate the voters so that they start to demand stricter systems. in other words, as long as we allow our politicians to borrow against the future earnings of every child in america for generations to do some politically expedient -- anything -- plan, health care, defense, i don't care -- they will do that. so until the voters step in and start demanding a system of how we administer our country that does not predicate itself on borrowing money from china, buying oil from people that want to kill us and borrowing money from our children, i don't know how you solve that problem. we'll come back. we got an hour and a half of meeting left. eliot probably has ten more things to say. so does gavin. so does jonathan and so, too, does contessa. you've got a lot to say. >> not a lot of time to say it.

>> we'll work on that. free cr!

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innovation today for america's tomorrow. coming up in the second half-hour, you think barack obama had grassroots? you think that howard dean had grassroots when he ran? sarah palin may be the best grassroots politician this country's ever seen. we'll have that conversation right after this. come on in. you're invited to the chevy open house. where getting a new vehicle is easy. because the price on the tag is the price you pay on remaining '08 and '09 models. you'll find low, straightforward pricing. it's simple. now get an '09 silverado xfe with an epa estimated 21 mpg highway for under 28 thousand after all offers. go to chevy.com/openhouse for more details. including who i trust to look after my money. ♪

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welcome back. let's reset the agenda. the committee's planning to vote on health care reform this morning. what's missing from the bill? that conversation's coming up. sonia sotomayor back for her third day of questioning. we'll check in on the supreme court hearings. witnesses up next. then the opening bell has indeed rung on wall street. futures up, the surge yesterday on that fed forecast pushing things along. question again is, are we watching an economy propelled by

taxpayer dollars at banks or are we looking at an economy that will eventually create jobs? the fed it will be five to six years before that happens. we'll come back for all that. first i want to start with a conversation about sarah palin, if i could. specifically, about whether she is actually the best-suited grassroots politician this country has seen, contessa. there are some statistics that suggest as much. >> we're looking at her political action committee. right? this is generating $733,000 in the first half of this year. that's not a ton of money but about 60% of that money that was raised, more than $443,000, came from small donations. of course the antipalin fund-raising movement is proving it can generate cash as well. moveon.org sent out an e-mail yesterday slash wlag it calls palin's lies in a recent op-ed

she wrote calling president obama's plan a killer. >> she's so irritating people are willing to donate money to shut her up. >> either you love her or you hate here. she is a polarizing force. in her own state she says she's stepping down at this point because of multiple ethics complaints against her. now the alaska legislature is going to override palin's position not to accept stimulus money. >> if you look at fund-raising -- ron paul, 62% of his money comes from $200 or less. came from, i should say. palin, 60%. obama has a perception of being very grassroots funded type of politici politician. clearly relative to most, quite honestly, he is. however, compared to sarah

palin, there's no contest. only reason i bring this up is this, eliot. most politicians have to cater to a certain constituency, as you well know, in order to raise the money necessary to become an active politician. the less vulnerable or beholden they are to any one constituency, the less likely they are to behave in a way that serves the interests of health care, finance, energy, whatever the unions -- whatever it may be. am i overreaching when i look at her fund-raising capabilities and ability to build a crowd -- forget some of the political aspects -- that she is a legitimate threat if only because the country's frustrated with the congress, it's frustrated with all the things that we talked about, and she represents somebody who will not be bought and paid for who can really ask questions. >> i agree with much of what you're saying. let me point out one thing about these numbers. reason's barack's number's at 38% is not that he received less money in $200 contributions or less, it is that he received so much more in bigger

contributions. he was still a grassroots fund-raiser. in total number of people in that column. he has a much larger base. but more important i think what sarah palin is doing right now -- i think most of us who look at what she says and try to follow her logic -- discount her and say she just doesn't get what's going on. i think that's a general conclusion, that's fair to state. but she is tapping into a populous group out there. sarah palin will become directly more popular proportionate to their -- >> he comes off as being extremely knowledgeable about money? >> hos is out there in the media vortex tapping into this anger, freed from all the constraints. she's no longer a governor, she can say what she wants. she can say i've been beaten up.

she's tapping into the anger on the east and west coast only. >> chuck todd? >> yes, sir. i'll just say this. be careful on populist politicians. can you get to a certain point as a populist. pat buchanan did. nationwide. jesse ventura did it and actually got a term as governor in minnesota. populism can get you so far and can get you so that you can get great crowds and get a voice to a point. what made obama successful for instance and howard dean not -- right -- both of them initially were powered by grassroots fund-raising and grassroots activism -- it is the ones that can balance and walk the line between the establishment and the grassroots. and the politicians that do that, end up getting -- look. i see sarah palin as becoming a huge voice, becoming a major conservative populist without ever maybe even running for

president in the future. >> jonathan? >> chuck is absolutely right. the other thing that i wanted to point out is that, it's great that she's raising money from the grassroots, which is from the conservative wing of the republican party. but as we've talked about many, many times, that part of the party is a very narrow slice of a party that's now become a regional party and that sarah palin represents this wing that is not about looking outward, looking at things, a way to reach out to independents and reach out to democrats. it is a very reactionary part of the party. the second thing is, great, have you all this grassroots support, but there's no "there" there yet for sarah palin. yes, she has that op-ed piece on "the washington post" op-ed page, but that's the first stuff we're seeing she's said in a very long time. i keep saying this over and over again, if she wants to be a real voice for her party, to be a real powerhouse, has a knowledge

base to go with the fund-raising base, she has got to go away and study and come back -- >> go to the kennedy school. >> right. and come back -- >> if you were sarah palin and went to the kennedy school right now and came back, i think it would be genius. >> i was going to say more like the hoover institute. i think chuck is rights, you read your limits. but if unemployment hits 10%, 11%, think we are looking at a fundamentally different dynamic. president obama's numbers in ohio, virginia and pennsylvania are dropping directly proportionate to the rising unemployment. if we don't get answers and create jobs, then we will see a shift in the political dynamic. that is why jobs, jobs, jobs is what we should be talking about. >> jobs, jobs, jobs is exactly the one thing we have yet to get and are still losing. it is not even that we are not getting them, we're parking money as opposed to letting the failed banks fail, creating healthy banks, then having healthy banks that lend into an

economy where people would develop alternative energy. i'm glad you're here contessa. somebody was going to say something. >> the one republican in the room. go. >> america hates a quitter. when things got tough there, she was under some fire. there's been a lot of -- you can't be a politician and not have people say negative things about you. she kicks off her heels and she runs. ross perot '92, had 39% of -- at 39% in the polls, leading the pack in june. whole things comes out about his daughter and some pictures and he quits. whatever happened to ross perot? co-have been president of the united states. think the one time that we have really seen her metal-tested which is right now, she turns and runs? it's over for her. that's good for the republican party. i'm happy for it as a republican because there is better candidates out there. >> thank you, mr. polone. lots more to come. we're doing half-hour meetings for a couple of days. we got lazy. we didn't do anything. we br drinking by 11:00.

now it's 9:40, the meeting's not even half over. treasury secretary paulson testifying. we'll talk about what the threshold for keeping secrets in this so-called democracy ought be, whether you are dick cheney ar hank paulson, at what point is it okay to keep secrets from the voter. in six different ways?

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welcome back to "the meeting." contess contessa, postponing any morning drinking, instead going to talk news. >> i'll just have to wait until later. right now, sonia sotomayor back in the hot seat. we want to show you some live pictures from capitol hill. day four of senate confirmation hearings for sonia sotomayor, getting under way, 12 senators still in line to question president obama's pick for the supreme court. after that witness, testimony will begin.

msnbc chief washington correspondent norah o'donnell is live at hearings this morning. what are you expecting to see today, norah? >> republican senator jon kyl just kicked off some of the grilling this morning. guess what he's talking about? that new haven firefighters case. because frank ritchey is going to testify today for the republicans. they are trying to get judge sotomayor to answer questions about why she dismissed that reverse discrimination case. clearly they're setting the stage for what they want the headlines to be about tonight. but i think this is important to remember, it is day four of this and judge sotomayor only has to withstand just a couple more hours, then she is likely on her way to be confirmed as the first hispanic on the supreme court. she'll also become the sixth catholic who will be sitting on the supreme court. this is all about wrapping that up. also i think we should note, too, as we look at these hearings, so far republicans have failed to trip her up,

failed to create that meltdown, remember that republican senator lindsey graham said would prevent her from becoming a supreme court would prevent her from becoming a supreme court justice. there were tough questions about abortion, her temperament. the only time that judge sotomayor got tripped up was by a democrat, al franken, when he asked her to name the one perry mason episode where the prosecutor, perry mason, lost a case, contessa. >> it's good to know there is something beyond the grasp of someone so intelligent. thank you. nasa is looking carefully at video of the launch. pieces of foam insulation broke off and hit the shuttle during liftoff. nasa says it's not worried. engineers still checking the tape to make sure "endeavour" is okay for the rest of the trip to the space station. this morning the nominations for the 61st emmy awards announced in hollywood. it's another big year for cable.

nbc's "30 rock" leads all nominations with 22. they will be up against "entourage." "how i met your mother," the office, 30 rock, and weeds. big love, breaking bad, damages, dexter, house, lost, and mad men. the awards will be handed out september 20th. and dylan, we'll have our own emmys. this is what i'm hearing? >> the political emmys. best political, best drama. i'm new to this business but apparently there's a lot of craziness that goes around washington. >> what? >> i'm just learning. we're going to take a break. we're back right after this. you have questions. who can give you the financial advice you need? where will you find the stability and resources to keep you ahead of this rapidly evolving world? these are tough questions. that's why we brought together two of the most

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welcome back. i'm just showing contessa how to come up with a few billion dollars. we have a freedom of information request that was fulfilled for that meeting that paulson had. can he get in here? can you look at this? i want you to see this real quick. this is how you get -- i don't know if you can get in here. >> this is how you get $25 billion. >> you fill out the form. >> look closely. get right in there. you fill out the form. can you see that? if you put in the $25 billion and citigroup, that's how you get the money. there's $10 billion in goldman sachs. that's how you get that money.

$10 billion, merrill lynch. it's a four-paragraph form. you just have to fill it out. >> write your name in. >> how much do you want? >> $10 million sounds good. >> we only do billions around here. >> i can do a lot with $10 million. >> what do you have? michael jackson dominating the headlines. wait until you see the hair on fire. remember the pepsi commercial in 1984 this happened. show it, roll it, let's see it. >> come on. >> there it is. apparently -- look at that. now he's running -- he got hurt really bad. they say this is sort of what started his painkiller abuse. >> the beginning of the end. >> exactly. >> we're just getting a look at that video. unbelievable. >> tito jackson, we're talking about the kids and who is biologically the kids' parents. tito jackson says michael jackson absolutely is the father of the children. he says there's a likeness in their eyes. you can see michael jackson's eyes. so tito putting this whole thing to rest. he doesn't need a dna test. >> he can just look them in the

eye. >> that's how i do it. you're alreal right. you're to be trusted. >> so far. >> coming up, we're back. health care with all these proposals. again, fantastic we've taken up the conversation, but what at this point is the congress sweeping under the rug and we'll lift the rug up and pull it out. we'll have that conversation. plus -- >> plus, bernie madoff adjusting to life behind bars with the help of a prison coach. the macro business in prison is apparently booming. maybe he can start a macroponzi behind bars. and from paulson to cheney, many people are raising concern that is the government is operating in secret. who gets to decide when secrets are kept in a so-called democracy?

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all right. welcome back. i won't try to hold up papers like that again. i get excited. i can't believe you can get $10 billion, four paragraphs. anyway, second hour "the meeting" getting under way. health care at the top of the list. what is being swept under the rug as congress prepares to pass more than $1 trillion worth of expenses onto the taxpayer in an efforted a mir raably to reform health care. bernie madoff concerned about coping with life in the

big house. he hired a prison coach to help him. we'll talk to a prison coach about the so-called macro -- used to be cigarettes. apparently now you trade sardine tins. smoking isn't cool anymore. secretary paulson on the hill. we're ask why he and other top officials feel they can hold secret meetings to decide what to do with her our money or our resources. isn't the definition of a democracy you have to disclose to those who pay your paychecks what you are doing with their stuff? anyway, what is the threshold for secrecy in the government? we'll have that debate. and day four of the hearings for sonia sotomayor. it's gone well for her so far. they are going to attempt to rattle her once again today. 10:00 a.m. halfway through "the meeting." nice to see you. contessa, let's pick up -- oh,

shucks. that was fun. i think chuck todd is here, but i don't really know. chuck, are you there? >> don't mess with the cool graphics, dylan, man. >> there is no chuck, there is chuck. >> i'm always here. i'm omnipresent. >> i'm talking to my crazy spaceship graphic we worked so hard on. what's going on with health care? >> reporter: well, as we were discussing at the top of the last one, at this point when it comes to the politics of this thing, it's all about one person, max baucus. he's chairman of the senate finance committee. it's almost a game of where's waldo. where's max? where is his plan? where is his opinion on how to fund this thing. i know we've had a spirited conversation about this house plan and the potential that there would be a surcharge on millionaires and then a surcharge on folks that make over $300,000. well, that funding mechanism may be a moot point once the senate

gets its hands on it, but that's the point. max baucus is the guy. everybody has been deferring to him. the white house has tried to defer to him. harry reid has tried to defer to him. he still doesn't have a plan. it's frustrating democrats in congress and it's frustrating people over here at this building. >> eliot spitzer back in the conversation. gavin palone, ezra klein. you were talking single payer the last time we talked about this. when you look at the current proposal, what does it do for quality? how is single payer different for the quality of health care? the big concern is my health care -- i'm not going to be able to see the doctor, not going to be able to see the doctor i want. my quality of care will go down. that's one of the fears. >> that should not be the concern. really, how you handle payment from patient to a doctor to a hospital shouldn't affect quality. we have to separate the mechanics of payment versus the quality of medical care. the issue we're not focusing on, we've had all these agreements, pharma is going to take a cut of

"x," hospital will take a cut of "y." those numbers usually do not result in a long term, this is where gavin's concern comes in. costs have grown, and the reason for that is technology gets better. technology is expensive. we all want access to all of those types of new care that make it possible to get better faster, keep people alive longer. as we have benefited from that new technology, it gets more expensive year by year to pay for all this. we haven't figured out how to do the ugly thing, with i is ration health care. nobody wants 20 to do it. >> the government will be the one that toes it. there's a system in england, one eye for you, but not two. one toe. >> we do it in different ways and it's a all hidden from the public. >> senator scott brown, are you there? no. yes, no? maybe so? >> yes, i'm here. >> senator? >> hello, i'm here. >> welcome to "the meeting." >> thank you.

i have been listening. it's a very interesting conversation. >> why don't you make it more interesting for us. your views on massachusetts' efforts to create mandatory health care. what worked, what didn't work, and how you would make it different if you were to try to scale it beyond a single state. >> well, it's been interesting looking at what the senate and the u.s. senate is doing. they're really mirroring what we did a couple years ago through governor romney's leadership. we had a bipartisan plan that was carefully crafted to make sure that everybody's interests were taken into consideration can. business, providers, individuals, and obviously the commonwealth, and we have a plan, as i said, it's somewhat similar to the federal plan, but the problem is you have a new administration and in a lot of those assessments they are now being born and increased to the providers and to the actually businesses. >> let's just look at massachusetts as a laboratory that we know. in other words, it's a state where you stepped in and said, listen, everybody has to have health care. we'll create a law that says mandatory. what has been the biggest problem in massachusetts thus

far doing this? in other words, whether it's a tax burden on certain constituencies, quality of care, all of those things. >> it's pretty easy. it's costs. costs, costs, costs, because without the federal stimulus dollars and the federal waiver money backfilling our plan, it would fail. and, you know, you have really great plans. we've gone from 10% uninsured to 2.6% people uninsured, so it's worked, but it also has its failures. >> hang on one second. ezra, go ahead. >> i think, you know, earlier in the hour we had i believe it was represent pallone talking about small business -- >> he's not a representative. he's enough of a pain in the neck without being a representative. >> i think he got something wrong, but i think the central thing we're not talking about enough in this discussion is the central inefficiency of health care. why does my newspaper provide a

newspaper and provide me health care? everything is routed through employers and it's a problem. obama comes on and says if you like what you have you can keep, it but the central question not being asked is what if you don't like what you have, right? in trying to preserve the employer-based system, we'll make it hard for people with employer-based insurance to get something better or something different. >> some have proposed alternatives to that, but the political system is very wary because they're worried they will get attacked on the idea that if 20 million people want to change their insurance, the republicans will say, oh, you're going to lose what you have. >> and gavin, i'm coming to you. >> it's a historical an ak row nism we provide health care through employers. it doesn't make sense. i think the massachusetts lesson is you can impose mandates. it can work, but the cost goes up. massachusetts, i believe, senator tell me if i'm wrong, is on the cusp of narrowing eligibility and eliminating a huge swath of people from coverage so the number of uninsured will go from the very

low 2% up to something higher. that's because costs keep going up year after year. until we get cost control, none of this will work. >> representative pallone, are you here? >> i'm here. >> that's your new title. we'll talk you representative pallone. >> it's going to stick. some day i will be. >> i believe it. listen to me. if you were to go with an he will yot spitzer proposal, single pay er, is there a conversation to be had there from a conservative standpoint, from a small business owner spanned point of view that you would be willing to support or develop? >> not only would i be willing to support and develop, i would be willing to pay for it with tax dollars. we need real leadership in washington to take on the entrenched interest. we've got to bring costs down. if you look at other countries

where they have brought costs down, it's managed care. so we're going to have to create a base where we say this is the level of care that we're going to provide to everybody, and if you want more, your employer or you yourself will have to pay for a better plan, and that's going to have to looked like an hmo and there's wrong with t i have an hmo for some of my employees. it does work. you can't choose your doctor, but people in the military can't choose their doctor and they get a high level of care. can i throw one more thing? >> quick. >> tort reform, okay? there's a lot of costs in this system that take place because doctors are afraid of being sued and there's a lot of money they have to pay out in insurance. >> i want to come back to that because we have two -- we're going to do health care for weeks to come. very quickly here. >> you are right. we tried to new york when i was governor, we said we pay more per person on medicaid than any other state in the nation. we tried to change that by fundamentally changing the way health care was delivered. we were attacked by both the union that said we're going to

lose jobs in the hospitals and the hospitals themselves that said we'll see our revenue streams cut. we said of course, you are. it was a massive onslaught, tv ads against me personally. it is a vicious fight. you're trying to take money away from certain groups that are used to getting money. >> ezra? >> that was inaccurate. of course you choose your doctor in canada, in netherlands. >> you're saying it was inaccurate when gavin said hmos don't let you choose the doctors. >> when he said in other countries the way they brought costs down, you don't get to choose your doctors. they bring costs down the same way walmart brings costs down. it's a large pool of customers and they bargain low costs. that's why our seniors go to canada to buy drugs for a lower price than they can get them in america because the canadian government has, whatever, 50 million people, 60 million people in one plan that says you

can fill them all at once if you give us a good deal. they do get to choose their doctor. >> the nice thing -- who is that, scott? >> yeah. part of the problem also is massachusetts is a little unique, a little bit more liberal. you know, we agree on this issue, but you have some states that their uninsured folks are 40%, 50%. to ram this program down their throats is going to be problematic. >> we'll come back again, like i said, two-hour meeting. contessa, away from health care and onto madoff and his trip to prison. he's heading in today or is already there. what's going on? >> yeah, he's there. it's a busy time for prison coaches because of people like bernie madoff. there's been a sharp rise in financial and white collar crimes. a lot of people who were used to a soft life now going to the hard life, and so they need prison coaches. so bernie madoff, for instance, the meg a scammer serving his 10 year prison sentence.

to help him make the transition from the penthouse to the big house, he may have got some advice from steven oberfest. he's a prison coach. this is the speech he gives to new inmates. >> if you're not afraid right now, you should be. first of all, take a look at me. 285, rock solid. can you take me? are you able to handle yourself if i come to you and give you a problem while you're incarcerated? i doubt it. >> oh, i'm really interested to hear what the advice is if he comes at him. >> let's find out what to do because i'm nervous, i'll be honest. larry levine joins us right now, head of wall street prison cons consultan consultants. why that's a business is a conversation for another day. i'm going to jail, i'm bernie madoff. i have a 285-pound man that's asked me how i might deal with him. your advice to me? >> keep your mouth shut. don't be confrontational. show a lot of respect. remember, you just jumped into the system.

you don't know nothing about what's going to happen. he's been in the system for a while. he knows the ropes. you need to find some people that you're going to run with while you're in there that you can kind of call your friends, but on the other hand, don't trust anyone. don't trust oberfest. do your time, don't do someone else's time. don't get jammed up in the politics or the drama. bernie's problem is he doesn't have an out date. he's never getting out. because of that he's going to be in with people like that who have nothing to lose. so i've heard people say that butner is the crown jewel of the bop. i think bernie is the crown jewel of the bop. you will have somebody there trying to take him out. he will leave in a box or a bag real soon. >> now, do you think that they know that? in other words, do you think that the wardens and people running the prison system are aware of what you just said and as a result he's going to be kept in isolation to protect him

from that? >> you can't -- well, you can't keep the man in isolation forever because he hasn't done anythi anything. on the other hand, you can't watch him forever. that warden is a probably a little pissed off that they even sent him there. he's going to be a problem for the bureau of prisons until the day he dies. butner is a little different, it's a complex. you have an fci, two medium fci -- >> what does fci mean? >> federal correctional institution. >> got it. >> the lows are dormitory living, the medium is cell living, the camp, there's no fence, minimum security. let's jump to the medical center. i have clients that have been to the medical center, and usually somebody in madoff's situation, they're probably running him through there for a psychiatric evaluation and a medical evaluation. butner may not be his final

home. we don't know that. >> got it. >> i have clients that stay there for six weeks and they moved them on. >> jonathan, do you want to get in here? >> i'm here. i'm sort of curious about how many people have sort of prison life coaches? this is something i had never heard of before. >> there's about half a dozen of us in the country, and there's a few people popping up now that really lack the experience. they're doing a great thing trying to help people, but in my case, i did a ten-year stretch at minimums, lows, mediums, and highs. i know what's going to happen somewhere. i'm not reading it out of a book. i know it off -- >> what were you convicted for? >> narcotics trafficking, securities fraud, racketeering, obstruction of justice, and minnesota guns. >> was it eliot spitzer that put you in jail by any chance? >> no, eliot wasn't involved in my case. >> racketeering was one of his specialty sincerely whyies is w.

>> i was federal. >> this is one of the scariest little pieces of tv i ever watched. we obviously know life inside the federal prisons can be very tough and bernie madoff will have an adjustment, especially at the prison he's at. larry is right. there are some minimum security prisons where life is actually pretty cushy. where the white collar defendants usually go where there aren't fences. he is in an institution where he's going to be in there with rough guys who are going to perhaps teach him a if you lessons. this is scary stuff. >> i have macro cans on my table for the following reason. i am told by people that cigarette sincerely no longer the currency of choice. that it's mackerel cans. >> no more smokes in the feds. >> what's with the mack keerel.

>> they're in pouches now. >> i can do some damage. >> that's why they're going to pouches. a pouch of mackerel is about a buck. it maintains its value. you can use that to have your shoes shined, your area cleaned up, it's a common currency of trade. a lot of people don't eat the mackerel. you use it as trading value. >> monetary policy in the federal reserve system. >> i can see ruth madoff smuggling mackerel and a cake into the prison. larry, thank you very much for your time. you're an interesting personality i would say, and i feel like i learned, and that's why we called this meeting. i appreciate that. >> glad to be here with you. >> thank you. come back. hopefully not, you know, not to talk to any of us about anything too specific. still ahead on the morning meeting, a string of things, including do we have a good

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call or click today. progressive. the oldest woman to give birth recently died. had twins, in fact. she got pregnant with the health of a series of fertility drugs. maria delcarmen the name. >> she made headlines. was named a guinness world record holder. she was 66. she had these twins in 2006. she lied to the california fertility clinic that helped her get pregnant saying she was only 55. that's the maximum age the clinic would actually accept for a single woman looking to receive in vitro fertilization. we don't know exactly how she died or now what will happen to these twin boys not even 3 years

old yet, dylan. >> all right. again, we'll have a quick conversation on this. eliot is here. gavin, i will start with you on this one. is there a role for government in managing things like fertility? is this a valid conversation or should science and its ability to -- reproductive science and other aspects like that be left to scientists and women and men and should the government stay out of it completely? >> you know, i'm generally pretty libertarian on things, but when other people's lives, and the lives of two children in this instance, i do think the government has to regulate it. even if she were 5 5, i think we all think it's pretty distasteful. we don't know what the long-term effects are. there's probably a higher cancer risk because those things are always tied into hormones. the fact that there are two children that are 3 years old that doesn't have their mother anymore, the government should step in. >> how is that different than a

man in his late 60s who has twins and dies after a couple years? glen mcgee is the editor in chief. >> i heard the morality tale. >> how do you spont? >> it's a morality tale. when i was a little boy i was told the story of the birds and bees, too. i remember hearing about every mom and dad having 2.1 kids. there is a real issue here about the family. it's not just that this child isn't going to have a mom. it's about the fact that we really don't have any kind of social regulation or even just social planning and kids books to help us as we deal with a whole variety of new ways to make babies. there's not a big market of 65 and 70-year-old women out there who want to have kids. it's not like we need to pass a ban. but we do have to have some way of thinking about this before we start. >> yeah. and, again, as science moves

both towards women being able to have babies much older than they used to be able to and then obviously men having that ability forever and viagra quite honestly helping that in a huge way. it just does. at what point -- in other words, because gavin's point is this, we're paying for this -- >> it comes back to our earlier conversation. this is where rationing comes in. it's an ugly word. nobody likes to use it. when public money is involved, you have the ethical issues, the sad story, two kids without a mom. if we are cutting back on health care, some legislature somewhere will say at a certain point this is not the sort of investment we rationally should be making and, therefore, you begin to make these what some people would say are very reasonable decisions about rationing health care. >> if i may, i don't know -- i was just going to say that sounds nice and we'd all like to see some rationing of a whole variety of different kinds of reproductive behavior, but the truth about reproduction is the truth about reproduction. a couple of people and a bottle

of wine and you have a baby and there's no policy in the world that's going to prevent that from happening just like there's no policy that could ever prevent reproductive health care from being what it is. the doctors providing these services are being paid cash. it's not as though a wave of poor women are going to show up saying i want reproductive medicine, too, and i'd like to clone. these babies are often born unhealthy. long term they're at huge risk. you get seven kids at a time or kids when you're a grandma. yes, it costs a lot of money, but it's not rationing. the question is how are we going to decide who's responsible? when these costs crop up, the answer right now is you and me. so we have to answer that question. >> jonathan? >> and the other thing though, you've mentioned it in the setup to the piece but it hasn't been talked about. remember, she lied about her age. clearly, if they had known she was 66 years old, they would not

have done in vitro fertilization. at what point and how can, if we're talking about government stepping in and preventing people from doing this, at what point or -- should this person be prosecuted? should she be thrown in jail? >> the doctor shouldn't be performing it. she shouldn't have had it at 55. >> an important point -- >> it's the doctor -- the doctor is responsible. >> go i a head, gavin. >> i think the doctor has some responsibility. even if she wasn't lying about her age and she's 55, i think that's too much. we have to start setting some limits about what you can and cannot do. if a doctor could put a second head on her shoulders, should he be allowed to do that? it doesn't make sense. it's unnatural. >> this woman did use a fake i.d. she went to two different clinics in new york. but in the time since this child has been born, more women have been giving birth to babies after menopause. it's become a phenomenon of a large number of women and a lot of us in the world of bioethics

have said why can't we have rules and regulations? there's a simple answer to that. in the american system, not the british system where it's no problem and there are rules, but in the american system the societies of doctors absolutely refuse to regulate themselves, and it's not as though you can bring the police in. this is a simple matter of patients and physicians, and the only way that there will ever be what gavin is exactly right we have to have, the ohm way that will ever happen is if fertility medicine dock titors say we wilt allow it, and any doctor who does it we will sanction and we will stand side by side in the malpractice courtroom saying this is reproductive malpractice and here is the damage. a little child who doesn't have a mom. >> yeah. got it. listen, that's the last word. glen, thank you. we will take a break. we are back with a look at the testimony on the merrill deal, the cheney comments on the cia. at what point does democracy end and russia begin? we'll have that conversation

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welcome back. health care has to be in the mix here -- >> no, it's not. that's a big topic for the rest of the day. i want to talk about meghan mccain saying she wants to be the anti-rush limbaugh. >> really? >> and she does so by picking on joe the plumber. do you know what she said? she said, here is the quote, joe the plumber, you can quote me, is a dumb ass. he should stick to plumbing. >> i thought he wasn't even actually a plumber. >> he was working as a plumber -- anyway, i don't think you become the anti-rush by calling names. >> you can do better than dumbass anyway. >> dumbass is a good word actually. i think i used it during the commercial break. >> i bet you did. >> there was a lot of tweeting going on about the president's first pitch at the all-star game. >> really? >> a lot of people, rush

limbaugh included, seemed to think the president throws like a girl. this is the big topic of conversation. does the lefty throw like a girl? mark reardon, who is an old friend of mine, conservative radio talker in st. louis, tweeted yesterday that this is how president obama prepared for his first pitch. show the youtube video. that was the pitch. he says he learned it from this youtube video. look, i'm no expert on what pitches look like, but i thought it was pretty good. by the way, what are you saying about the way girls throw? have you seen a girl throw, mark rath reardon. >> girls don't throw that well generally speaking. i hate to say it. you know it's true. i know you have brothers. she'll be back. the truth sometimes hurts. and sometimes they just don't like to tell us the truth, like if you're the treasury secretary or the vice president. why do we live with what appears

to be a good fellows government? some comments from hank paulson and the treasury secretary as i try to reconcile with contessa. >> to beat you up. at 155 miles per hour, andy roddick has the fastest serve in the history of professional tennis. so i've come to this court to challenge his speed. ...on the internet. i'll be using the 3g at&t laptopconnect card. he won't.

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don corleone. >> what's with all the secrets in our government? whether it's the secret meeting of the nine with hank paulson last fall and the 100-some odd billion dollars that was put into the banks at that meeting, or all the dick cheney conversation we have been having? i know hank paulson is testifying about whether he

coerced bank of america. >> lawmakers want to ask him some questions. they want to know if the federal government and hank paulson pressured bank of america to go through with this deal to merrill lynch. paulson, who was the former ceo, remember, of goldman sachs says his actions were justified. here is some of his prepared testimony. quote, some have suggested there was something inappropriate about my conversation of december 21st with bank of america ceo ken lewis in which i mentioned the possibility that the federal reserve board could remove management and the board of bank of america if the bank invoked the mac clause. i believe my remarks to mr. lewis were appropriate. but come on, dylan, you're talking about lots of secrets. last october secretary paulson, some of the ceos from the nation's nine biggest banks, he had a secret meeting with them. he made them an offer they felt they couldn't refuse. they took 250 billion bucks to help prop up their balance sheet and you already mentioned vice

president dick cheney. lawmakers say he directed the cia not to inform congress about a secret program to develop these hit squads to kill al qaeda leaders. again, "the washington post" reporting this morning that it was a directive signed by george w. bush. dill snn. >> i want to read the paulson comments. i have representative grayson with us. ellioiot spitzer, gavin, contes all still here. here is the comment that came out. paulson said if a capital infusion is not appealing, you should be aware that your regulator will require it any circumstance. bear in mind he's the regulator. he represents the regulator in that context. representative grayson, are you there? >> yes, i am. >> what has happened to the process of american government that we are being subjected to a culture of secrecy that we obviously now talk about almost

daily? >> well, hank paulson never should have had that job in the first place. he had a $700 million conflict of interest, and everything that he did while he was treasury secretary, every single thing did he has one explanation. what's good for hank paulson. >> and i want -- i'll come back for a hank paulson conversation, not because i don't want to have it, but i'm concerned that the system of the american democracy has broken down to the point that whether it's hank paulson, dick cheney, taxpayer bailouts of aig, whatever it is, that the process by which we are making the decision to torture, the decision -- i don't care about what the decisions are, but the mechanism by which we are making decisions in this country with american resources behind closed doors in private meetings and then we find out after the fact about whether it's waterboarding or with a bank or whatever it is, and i'm trying to figure out what the american voter, what the american journalist, and what we should be expecting of our congress to improve the

congressional system so that this stops happening across the board. >> you are absolutely right. one of the best examples of that is the trillion dollar secret bailout issued by the federal reserve since last september. that's $3,000 for every man, woman, and child in america, and they won't tell me or any other member of congress who got the money. >> i'm aware. you're looking at the same set of problem i am, eliot spitzer is looking at it, gavin polone. even if you don't understand some of the dynamics, you do understand the decisions are being made with your money behind your back in a way that you may not have approved of that are to the benefit of small constituencies. what is your sense -- i guess i'll bring you in on this, eliot, but what can be done in either the political theater or in the -- >> first, one observation, not directly on point. it's amazing they agencies that were imposing their willing on

t -- wills on the bank are now saying they need more power. they had all the pow her in the world, but didn't use it in the right moment. i think the answer is members of congress to call the hearings and call not in an angry -- >> we don't need a witch hunt. >> but to say to ben bernanke and hank paulson, to say to tim geithner, why did you impose these bailouts? why did you give money to aig and goldman? ask the questions. we still haven't had the questions asked. they have to answer the questions if they're asked. >> representative, when are we going to get a hearing like that? >> we've had some hearings like that without getting the answers yet, but we took a clip of those hearings, put them up on youtube and 1.7 million people have now downloaded that clip and seen it. and that shows that people have a hunger, a hunger for the truth. >> you bet. look, i wrote a piece where i laid out a bunch of questions that should be asked of tim geithner or hank paulson.

there was a good piece in "the washington post" on sunday saying what should hank paulson be asked. there are many questions out there. maybe the so-called pecora 2 commission will begin to ask those questions because i disagrees with representative paulson about one thing, the policies hank paulson put in place have been continued by this administration. there's a sense there's an imperative to do this. what they haven't done is explain why. they haven't been asked why are you doing this. >> what's most frustrating i think to me and others, both me as a journalist and me as a taxpayer, is the fact that we have had yet to see the congress aggressively step forward and say, listen, we approved your emergency bailout when you brought us into a room last fall and scared us silly. why are we not getting answers now about those decisions in the past, the economic benefits that are going to the goldman sachs and the banking system now while jobs continue to be lost in this country, and why are we not

seeing our congress aggressively go into a hearing, a ron paul hearing, i don't care who runs it. i just don't understand why we're not seeing a meaningful investigation or whether we're about to, representative grayson. what's your sense on this? >> we're not getting the answers we need. therefore, we have to legislate. that's why i've lined up 100 democrats to john in ron paul's bill to audit the federal reserve. something that hasn't been done independently for 97 years. when they're handing outside $1 trillion of our money and we could reach a point where we'll need a bailout of the federal reserve, we deserve answers. that's why we need to legislate. that's why we need to expose this and put some sunshine in the system. >> what is the threshold for you, eliot, and you representative grayson, and gavin, i want to get you in here, for keeping a secret. you look at dick cheney defending his secrecy. he said we focused on getting their secrets instead of sharing ours with them. on our watch they never hit this country again.

the argument is the ends justify the men. the paulson argument is we don't think it's tenable to opt out because doing so would leave you vulnerable and exposed. your regulator would require it in any circumstances. then it looks like the back of a napkin and people wrote in their bank and wrote in $10 billion. i got ten of these different forms. >> separate issues. one, in the security context i think with the cia, the question is disclosure to congress. there were some elements of oversight outside the decision makers themselves. there we have to have a very serious conversation. in the context of the economy, i think it's a question of the public's money is being spent. yes, there was a crisis. the public needs to hear why they made those decisions and hear it now and hear it immediately. we did that when i was in government. the public deserves to know why these huge sums of money were being given to private entities. >> and still $14 trillion -- just short of $14 trillion

taxpayer money at risk. you see the goldman earnings, the jpmorgan earnings. it's just not an acceptable structure. representative grayson, thank you for the case. >> gavin, i will get you in on the emmy conversation and i'll let you go. we are back with the first ever, and we're a two-week old show so almost everything is a first ever, but the first "morning meet" awards. rod blagojevich strong con tender for best comedy. sarah palin also on the agenda when it comes to best drama. we're back here on political emmys right after this. we all have confidence and we all have doubt. but when the moment comes... what's going to win?

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care. talk feds. all right. so we heard what the prime time emmy award winners earlier in the meeting. you graced us with that. >> we were just thinking that there's been so much in politics, maybe we should give awards like they do in the emmys. >> sure, i like it. >> frips, you have the lead actor in a comedy series. >> gavin, are you there? >> i'm here. >> are you ready for this? >> i'm ready. >> and the emmy goes to rod blagojevich. >> best lead actor in a comedy series. that was a shoo-in. >> you can tell by the silhouette. >> what's the interesting choice? everybody knows he was going to win. >> he was a shoo-in. i think he's definitely the most comedic one we have. >> what about al franken? >> no, not so funny. >> all right. >> he did have the perry mason thing yesterday. how about the lead actress in a drama. the winner is, the emmy goes to, sarah palin. >> yeah.

>> because everything is a drama. >> yes. >> with regardle >> regardless of whether she's being made fun of. yesterday she was tweeting about the bears. >> i think the whole state of california is a drama. i feel like the emmy should go to the state of california. >> but is california a lead actress? i don't know if that fits the category. how about the outstanding made for tv movie, which is sort of a category we immediate up. don't look at your papers. just guess. >> mark sanford. >> the winner is mark sanford because, you know, we saw him -- >> i have to disagree with that choice. i think mark sanford is like "chicago hope" which is more like ensign and "er," which is the better show. ensign had a frienn affair with friend, then went to the parents

to pay it off. >> made for tv movies are sappy is a lot of tears. there has to be a real love story. i don't think the ensign story had a real love story that. might have been a good john grishem book. >> but grishem is better. >> sanford is more of a love story. >> he left the state with his wife to work on the marriage. >> why do the women go back to them? no guy would do that. >> wait a minute. that's not true. that is not true. >> that is true. >> women cheat on men and -- okay. well, here we go. >> dylan -- >> we'll do -- >> listen, i wouldn't go back. >> you're not married. how do you know that? you don't have kids. >> that's why he's not married, contessa. >> please, please. >> yeah. thank you, gavin. we'll bring up the marriage conversation. that's perpetual. thank you, mr. polone. "morning meeting" panelist,

republican, california republican. >> why do they go back? >> handsome bearded restaurateur. we'll have more on that. thank you, mr. polone. i am back. contessa is off. she has her own program to deal with. our takeaway on the mackerel economy right after this. kraft tuscan house italian... delicious flavors... expertly blended...

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welcome back. we talked about bernie madoff going to jail. got into a discussion about how mackerel cans are the new currency, although they're not in cans, they're in bags. >> a pouch of mackerel is worth about a buck. it maintains it's value. you can use that to have your shoes shined, your bed made, your area cleaned up, get a haircut. it's a common currency of trade throughout the federal system. >> does that mean -- >> and a lot of people don't even eat the mackerel. just use it as trading value. >> if you want to know what mackerel gets you, larry gave us some more pricing. two cans get your shoes shined, three cans get you a haircut. five cans get you a person to clean you have your area for a week. also for five cans, specially prepared foods smuggled to you from the dining hall. that will do it for "the morning meetings." we're back in full swing tomorrow. right now carlos watson about to pick up. are you around here? >> i got a little mackerel.

>> how are you doing? >> we have a great show. you have to stay around. we have is mayor villaraigosa. is california coming undone? >> the answer is yes, by the way. >> that answer is important, but do you know what is as important? should we be angry about some of the bonuses some of your buddies on wall street are getting? >> only if you've read through some of these documents to see how easy it is to come by $15 billion. >> want to talk about the new season of "entourage" and i talked to samuel l. jackson. we have a little bet. >> how many billion are on the line on that bet. >> not $15 billion. don't go anywhere. msnbc live, we have toure, senator chuck grassley. we have a whole lot more after the break. holesterol. you've taken steps to try and lower both your numbers.

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