good afternoon to you. i am dylan ratigan. it is indeed the time for the republicans to tell the racist fringe however small of its party to hit the road. bricks through windows, a gas line cut at a politician's house and at least ten democratic congressmen asking for extra security facing threats? some extremists in the tea party are being blamed. maybe only a few of them and i would say there's a huge opportunity for the tea party here to make a big move on racism in this country. we'll talk to some of their leaders. and the folks at freedom works about that. they've got some great ideas and just a troublesome fringe, i suppose. also, financial police or keystone cops? we're looking for someone with the guts to actually fix what is wrong with wall street. is there anybody willing do that job in this country? so far, not in our government. all that, plus sobering news for the famous pub systes are irela. the show starts right now.

well, good afternoon to you and in america today a disturbing series of events leading members of congress to ask for extra security, congressional leaders demanding that the knopp gop denounce the actions of the family of one congress member fearing for their lives after a gas line was cut at their home. i don't think they want the family to be denounced. i think they want the person attacking the family to be denounced. of course all seemingly over the passage the health care bill. i want to start with the family of a virginia congressman tom pierelo. aty party organizers posted what he believed, perhaps hoped, waspirelo's home address on its website and urged readers of his tea party blog to drop by his home and tell him face to face what they thought about his vote for the health care bill. the quote was out of personal touch. the address that was posted by the tea partier, however, turned out to be perriello's brother home. his brother who has four young

children had his gas line cut this afternoon. despite to take down the wrong address. political reports that mike troxall. and now we're learning that indeed the gats line was severed at the home of the congressman's brother. good times. and in the past few days as you likely known, bricks have been thrown through the windows of five democratic offices. that has democratic leaders outraged and nervous for their colleagues. just a short time ago leadership revealed some ten members of congress have asked for extra security due to threats and they are calling on the gop to denounce the violence. >> certainly those of us who are elected and leaders in our country to try to maintain the civility of america. >> republicans coming out against the violence in just the past hour.

minority leader john boehner saying that's not american way. whip eric canner talking it reprehensible behavior. many feel the rhetoric has gone too far. incite them to action. one tea party promised on election day. rush limbaugh inciting his list listeners. when we do ubetter watch out. sounds a little bit like a threat isuppose. maybe it's political. other conservatives have tried to distance themselves from what many view as the fringe in this movement. >> this tea party movement is largely novices, relatively politically unsophisticated people and as a result sometimes their rhetoric is raw and angry and that's the downside. >> the downside, indeed.

and the numbers show that republicans as much as they might like cannot ignore these guys because, for the most part, they are republicans. nearly 3/4 of the tea partiers identified themselves as members of the gop or at least leaning that way according to the latest quinnipiac poll and at the end the day, elections, as you and i both know, are about votes, although really it's about money, but we'd say boots votes. with that in mind, it does seem some republicans are more than willing to bow to fringe tea partiers, because, hey, racists and nazis vote too. former congressman charlie bass running for his old seat in new hampshire, for instance. and he gave a nod to the tea party the very day he threw his hat into the race "i love them. god bless every single one of them. their agenda is exactly the same as mine." the movement's hero, sarah palin, certainly not helping to calm the fired up tea partiers. not helping them form a

legitimate opposition to call out the democrats for the obvious catering to special interests in their health care bill. in fact, instead of that, they're calling on conservatives to target 20 vulnerable democrats so that they can go back to the status quo where you don't even have to insure everybody. we don't use the word target flippantly. she's gone so far as to post a map on her facebook page using iconsof crosshairs, gun crosshairs like a site, to label the vulnerable districts. and on twitter, palin is urging her supporters to, "reload" after their health care defeat. too bad they're not reloading to take out special interestings that were accomodated by the democrats, and instead, are trying to just take down the democrats and go back to the status quo. that's curious. and if the rhetoric we've seen is any indication there is no telling what these guys are capable of or willing to do. tea partiers in eastern washington state, went so far as to call their senator patty murray to be hung, literally, over her support over the health care bill. and all the racist and antigay

language we saw in washington over the weekend, unfortunately, was nothing new. check out the taunts at a tea party rally from the spring. >> you're a -- >> you know what turn around. >> we're working people. >> now, it's hard for republicans to fight that sort of outrageous behavior when their own members are fueling the fire even if there's only a few of them. here's former congressman tom can creed cancredo. can anybody say jim crow. >> people who cannot even spell the word vote or say it in english -- [ applause ] -- put a committed socialist ideologue in the white house.

name is barack hussein obama. >> love to emphasize the hussein, as if by saying it it will make you think of saddam hussein. it's the craziest things these people have -- remember, party identification in this country continues to diminish massively, now less than 25% of all registered voters have linked themselves with the gop, and who can blame them, when the gop instead of being a viable opposition party with an easy target in the democrats who clearly seek to accommodate corp rations at every turn whether it's bankers, health insurance companies or drug company and instead of calling them out and improving the legislation, they actually try to race further to the bottom. i want to bring in tea party texas founder dale robertson, who's been a friend of show. he's with us from houston. along with brendan steinhauser, grassroots director for freedom works who's been helping the tea partiers organize -- a member of freedom works and also a friend of this program. dale, as a tea party founder in your state, what is your reaction to the slurs that happened over the weekend in the

perrielo infringement. >> it's extreme. the reality is most people are unhappy with the direction our congress is going. and we've -- on our side actually made a poll to recall our congressman and so go to teaparty.org trying to recall them right now and so if you are interested in recalling your senator that's the proper way to do did instead of using violence. violence is not the solution to the problem. >> brandon, when you look at the tea party values, for freedom, for real conservatism, where, again, banks can't steal money, corporations can't get sweetheart deals from the government, like they got from the democrats in the health care bill, or like they got from the republicans for the past eight years, those are values that somebody like myself and quite honestly, so many other americans would leap at the opportunity to represent, and yet, the failure -- and this is in my opinion -- the failure of the tea party to renounce or let alone take up a crusade against

racism makes it difficult for the tea party to grow. why do you -- in my opinion, why do you think there is the -- really strong values on the one hand, and then at the same time you have this fringe that -- at least that's not dealt with at this point. how would you deal with that? >> well, i would say, dylan, that i have personally dealt with this. and that freedom works has been instrumental in highlighting the african-american, hispanic leader in the movement. giving them the stage on the september 12th, march on washington, which had -- i think we had 15 or 16 african-american speakers. all of whom were welcomed and cheered loudly. so this idea that somehow this movement is racist or you know that this small element of fringe they don't even consider to be part of the tea party movement. the idea that they're somehow more influential than they are i totally reject out of hand. >> and, dale, so many will say what brendan just said, and very likely true. at the same time, when you see the tea party events, at least the protesters that show up

calling themselves tea partiers more often than not at least in washington, d.c., there are folks they're exhibiting homophobic, anti-semitic racist slurs, yelling, we saw it over the weekend again, it seems to me whether you're a democrat, republican, or a tea partier,s thatiism, homophobia,ect is poison for the political debate at the time that the tea party represents perhaps some the best values of anticorporatist politics that we could have if only you could add to that an antiracist crusade so that you obliterate this bad branding for the tea partier. do you think that's possible, dale? >> well, i would hope it is possible. i think that racism is not part of the tea partier like brendan said before that there's no place for racism in the tea party organization. blacks -- every race, dialect or even ideology is embraced. the idea is to get special interest out government and restore our country back to the

founding father's principle which is the constitution. >> again, i couldn't agree with you more. and yet, i don't understand, brendan, why we don't see that brand differentiation. because of not a central control for the tea party movement? or because of an obligations to the republicans who are at least willing to court the tea party voter if not manage them. why is it we don't see, not only the wholesale renouncing but the addition of an antiracist crusade to a very valid anticorporatist crusade taken up by so many in the tea party. >> well, i think that the claims that this movement, you know, has these elements that are, again, that are racist, i mean the numbers are stories that are out there have been string together to fit this narrative. but the god's honest truth is that we had 40,000 people near washington this weekend. i didn't see a single racist sign. i didn't talk to anyone who had anything homophobic or racist to say.

>> just because you didn't do that doesn't mean it didn't happen. in other words, i'm not even disagreeing with you in the sense you argue that most the tea partiers are not disposed to racist or any type of this behavior. >> sure. >> but you cannot deny those who say, hang, on maybe the tea party at the very least let the racists hang around and raise hell because we cannot hang around any player. >> no. >> how do you explain the direct epithets thrown as barney frank and others going to the hill yesterday having nothing to with health care and everything to do with people's color of skin and sexual orientation. >> again, if this oopd. >> we have videotape. >> well, i haven't seen. >> hold on, i can show you the evidence. do we have the videotape, you guys, of the tea partiers over the weekend with the epithets? hold on one second. i mean, we've been watching it. it's been on tv. it's videotaped with audio. it's right there. if we want to -- we might as well sort this out because a lot of folk it's. >> if i could finish. >> no. >> if i could finish my point. >> you just said it didn't happen and understand it did

happen and then we could talk about what to do about it. here, take a look. >> yeah, that's not from this weekend. >> no, no, that's not from this weekend. so actually i'm wrong. >> right. >> so you're right. i apologize. there is video but my staff -- we don't have that video. so we -- let's put this -- this will be good on the internet. anyway, finish your point. >> sure, if there is video that shows that which i haven't seen brought to light. clearly, again, this is -- if this happens, this is always a fringe even within the tea party movement and jenny beth martin, myself, dick aermearmey, anybod has been a spokesman for the tea party movement to the point there is a spokesman has been said racism is not supported. it's a collectivist idea, we believe in individual rights. racism makes no sense even in our basic political philosophy. >> that's what i think. your philosophy is similar to my own and that i don't want special interest taking over my

government. but your point is made. we don't have the video over the weekend and although i have seen that video and although who in the heck is going to believe me. >> gentlemen iappreciate you having the conversation with me about it. coming up here on the "dylan ratigan show," health care, v e vote-o-rama. plus, critical days in the fight for financial reform. will lawmakers clean up wall street or will the banks win again? we're breaking it down with best-selling author mike all lewis. but first, behind closed doors, the tensions that private in that private meeting between president obama and israeli prime minister benjamin netanyahu. oh, no, no, no, no, no, no, no. aah! [ door opens, closes ] wow. what's the occasion? [ male announcer ] relax. pam helps you pull it off. i'm just a skeptic so i don't necessarily believe that anything is going to work but i was like, hey, this actually works. (announcer) only rogaine foam

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welcome back. other top stories we may or may not have have video. irreconcilable differences on the health care and the closed-door talks between the u.s. and israel, again, with or without video may or may not actually be happening. we begin with today's action on the senate floor, where debate over the health care fix's package is inching closer to votes on gop maemts. supposed to be less than an hour from now but chamber didn't have to wait long for the fireworks to begin. take a listen. >> the fix-it bill and i call this is pau off bill, as you all know the speakish of the house had to pay off all of these individuals. >> for all these weeks, our friends on the other side have said, no, no, no, to health care. not one good word. not one of them stood up and said yes we should cover 32 million people who don't have

coverage. also today the president signing an executive order that reinforces a ban on federal funding for abortion. no tv crews were allowed in so there is no video. but the white house did release a photograph. here to mix it up, the host of the young turks and blogger for politics daily.com, matt lewis. chang, where are the democrats headed here? >> well, they seem to be celebrating over this historic victory and i get why there's a lot of good things in this bill and they address people who didn't have insurance, et cetera, et cetera. but i'm a little bit worried about where they are headed because it seems like hanging a "mission accomplished" sign. i don't think there is an effective way of stopping that through this bill and if the democrats think that is good enough, i'm worried that the american people will disagree when their rates go up again. >> yeah.

matt, i agree with cenk, in the sense they have achieved the goal of coverage obviously and they've done it with the most outrageous set of backroom deals and accommodations to special interests that we've seen since the bank bailout. it leaves a lot of people on the right, who say, they shouldn't have done this. and a lot of people further left, if you will, of those who are into accommodating game-rigging and special interest, andile don't know how that is lefty/righty. do you think that the democrats understand that what they've done while they've achieved the politically desirable with covering the uninsured and the humanly desirable tatway that they did it it is more evidence of how screwed upoir government is than the fact that it works? >> i don't think so, dylan. i think they are hanging the "mission accomplished" banner up they're just so proud to accomplish something and pass something and frankly it's understandable why they are. it took them a year. which frankly, was not one of the top two, three issues that the american people cared about. the american people according to

polling, care about jobs right now and the economy. so i think they're just happy that they passed something, but you're right. i mean essentially, the people who should be most happy about this are the insurance companies. we're now mandated by law to buy a product from companies, from insurance companies -- >> not only mandated but they also have a monopoly because they've got an antitrust exempt -- i mean we all know, listen. the big winners the uninsured, drug companies and insurance companies. thank you, democrats. and thank you, republicans, for a pathetic opposition for refusing to call out democrats for their obvious catering. america deserves a better ruling party in my opinion and a better opposition party to call out a ruling party that does this sort of thing. turn to the closed-door dealings between president obama and the israeli prime minister bench min n benjamin netanyahu. two meetings with the president to discuss the settlements in jerusalem. eers jerusalem specifically. the u.s. opposes those settlements and a part of the

city where palestinians hope to one day have their capital, the palestinian section of the city. the white house remains tight-lipped about the details of those meetings. not allowing a single photo of those meetings. >> when you -- when the president holds events and does not allow photographers in, it implies that the president is hiding something. is not -- is embarrassed -- is embarrassed about something. >> we were very comfortable with the coverage for last night's meeting. >> there was no zmoonch not everything the president does is for -- for the cameras and for the press. >> hm, i -- cenk, why don't you have a crack at that one. >> i don't think that coverage is the issue. that's okay i don't think that coverage is the issue at all. if the president wants to do something behind closed doors, that makes perfect sense. no problem with that at all. the real issue is how congress is dealing with this. because netanyahu, his government, basically slapped joe biden across the face when

he was in israel. and dared him and basically said, what are you going to do about it? i'm going to keep building these settlements even though you're against that and you came all the way here to start the peace talks and when netanyahu goes to congress, what does congress do, they totally undermine the president. one thing they were bipartisan on. they undermine our foreign policy, and basically telling netanyahu he is carte blanched to build any settlement he likes and go ahead and ignore our president. it's a terrible idea by the democrats and the republicans. >> because once again catering to the money flow that comes from aipac and other funding sources and -- you know look they've got their constituencies, they've got lobbyists, there are special interests, of course. but what's obvious is that they don't care about the substance of this and they apparently don't care about the peace process. we're supposed to help israel. >> let me jump in dylan. look, people talk about money and the lobbyist influence but israel is our number one ally and a very difficult part of the world and i think there's a very

good philosophical -- >> why is it different. >> a very good philosophical reason to support israel, this is their territory. they won it in 1967 and essentially asking them to do is turn over to their sworn enemies, people who want to destroy them, who don't even recognize they exist, part of their territory. i think we should stand with israel on this, and the fact that the united states is openly, i think undermining our ally in the region, that's the real issue. >> cenk, real quick? >> it's ridiculous. why do we have such problems in the region? it's because we support israel 100%. no matter how right-wing their government is. >> we know where you stand. >> we have to be a friend. we have to be a friend and actually work towards peace and the way you do that is by being even-handed. >> you are not giving peace by giving away territory. >> one at a time. >> peace through strength. you don't get peace by giving away territory. >> how has that worked out for you. >> every time that israel. >> how has that worked out for you, matt? six years. peace through strength? you haven't gotten peace at all. all you've done is you know,

more bombings, more oppression. >> -- appeasemaker. >> really? when when? when was the last time that happened. >> trust me every time they give these -- >> i don't trust you. i don't trust you at all. >> obviously you don't. >> we have the facts, you're wrong. >> we have a deep philosophical difference on this but i think that the bottom line is israel's our ally. we should support them. you are obviously don't support israel, that's okay, that's your position. >> that's not fair. >> that's not true at all. again you're lying. >> i'm lying. i'm lying? >> look at this rhetoric. >> this is not my position. >> hold on, one at a time. >> you are calling -- this is not the type of rhetoric we should engage in, civil conversation. you just called me a liar. >> i agree with you. i agree with you. >> you made a position about me. you made up my position. you said i don't support israel. how is that true? how do i know? because it's my position. >> you want them to give away territory, that's not supporting that. >> of course, i do for peace. so you want them to be a perpetual war. you hate israel. you hate israel because all you

want them to do is engage in war for the rest of time. do you think that will help them. >> your rhetoric is out of line. it's typical -- >> oh am i out of line, i'm sorry. >> you are. this not the time civilized dialogue we should have in politics. i think we should sit down. have a rote. >> i'll be honest with you. >> biden civilized is what netanyahu did to biden civilized? >> matt? >> guess what, he runs that country. he is the prime minister of israel. we shouldn't be telling him how to run his country. >> and we should run our country. we should run our country. and when congress -- i mean imagine if they did that with anyone else, with other allies, whether it's turkey or britain or jordan or ustrailia. just say all right we support you a million percent no matter what you do. >> sworn enemies who want to destroy them who don't even recognize. >> who cares. >> turkey's surrounded by sworn enemies. who cares? that doesn't mean that you agree with their government. turkey has a right-wing government. should we support?

no we shouldn't agree 100% and although they're a strong ally surrounded by enemies. >> should we tell turkey that they have to give away their territory so that there can be peace? that if they give away -- >> it depends on the context. >> you know what the greeks would love to have istanbul. that may bring about peace. have them do that. send biden over there. >> i will jump in here, i will say that in the history of mix it up, it has never been hicksed up as well as you two very mixing, all right? that was -- take that as a compliment. i appreciate both your passion for this subject. i think it is in the fabric of our society. why it is such a heated issue in this country and quite honestly i think that both of you represented a very fundamental point of view that exists keep in this society in multiple ways and it may not have been totally fun for both of you the entire time but i do think that you both did hell of a job mixing it up and represented a lot of the basic fundamental philosophy and philosophical difference with this issue which i appreciate. thank you. still ahead here, what exactly did george bush do with

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all right. it looks like the irish aren't drinking as much as they used to and it's because of the economy, or so they say it is today's "by the number." says that '09 the worst year for drinking in that country in recent memory. a new report says that the total volume of alcohol consumption in ireland dropping 6% in '08 and then dropping even further, 9% in '09. the report also estimates that consumption could slip another 5% in 2010. if that weren't bad enough per captia of consumption of alcohol has dropped 21% since 2001 when ireland's economy was riding high. the report says recession and unemployment rates are strong behind the force. another cause lower alcohol

taxes and in northern ireland lead the border to buy booze and tax gaming on and that cost the irish government. coming up speaking of numbers, can a bottle of water change the world? a chemist at n.i.t. thinks that he can make electricity with it. we'll tell you how he's planning on doing that. it's in our "dig list." but first the keystone cops of finance. will lawmakers do what it takes to fix wall street for good, stop the stealing, stop the bubble-building and stop the meltdowns. we'll break it down with author michael lewis after this. hey! increase in 6 months. pete, back it up! ( marker squeaking )

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i think that the american people expect us to address the largest, the most significant financial crisis since the great depression. caused by a collapse in our financial system either because regulators didn't do their job or there were no cops on the beat at all, and certainly in

unregulated activities that contributed to this mess. >> so we here at the "dylan ratigan show" are putting out an all-points bulletin for actual legitimate honest to god financial cops. today the would-be wall street crime-stopping duo of senator chris dodd of connecticut and congressman barney frank out of massachusetts emerge from a morning meeting with the president. announced plans for their next steps in financial reform. chief among them, they say, we need better cops watching out for you in your financial interests. i'm sure you and i couldn't agree with them more. after all today's financial police tend to look less like hard-charging enforcers and more like the keystone cops. ♪ take, for instance, the headlines from this week from the s.e.c. news that regulators at the s.e.c. surfing the web for porn on an extraordinary basis at the exact same time that the economy was tanking and wall street was

perpetrating the largest welt transfer in the history of the world. according to "the washington times" security employees and contractors attended to view porn on their government computers at work more than 8,000 times during the past two years. and it was during that time that $23 trillion was delivered to the banks. biggest it's most profitable in the history wall street last year, yes. no wonder we're still waiting for those wall street perk walks which at this point who knows if they will happen. although i think they will. add to that the fact that the s.e.c. workload, of policing wall street, has skyrocketed while the manpower at the precinct has stayed flat. you get a situation that madoff whistle-blower harry markopoulos described in the following way. >> i'm suggesting that if you flew the entire s.e.c. staff to boston, sat them in fenway park for an afternoon that they would not be able to find first base. >> then there is the issue of the credit rating agencies.

firms like moody's and standard & poor's, names you may or may not have heard. they assign grades to the quality of securities. in theory, they're supposed to be a safety net for investors. they're supposed to protect shareholders and investors by giving fair grades. saying this is high risk, this is low risk. too bad that their interaction with the big banks who sell these risky securities works a little bit more like this -- >> what's that? what is that? >> you're not an educated man. let me pay you the complement of being blunt. there is large, a large and popular business which you are causing dismay. >> which leaves us nicely into the problem of the fact that the cops work for the crooks in our financial system and there's a revolving door between the low-paid police force and understaffed and the highly paid

criminal community that they theoretically police. we all know how one of the chief architects of the financial bailout, for instance, the treasury secretary at the time, hank paulson, was indeed a former goldman ceo. one that just happened to benefit his firm, that bailout package he created, happened to bail out goldman sachs substantially under what is still a very secretive set of circumstances. we have not seen the aig e-mails, for instance, nor have we seen the terms under which mr. paulson delivered the t.a.r.p. money in that secret meeting of the nine in the fall of 2008. anyway, today we get another fun example of the very, very thin line of our politicians and the finance industry. democrat jon corz ierng just one example, accumulated a fortune as a chief executive at goldman sachs, which he then used that fortune to get into politics because we all know that money is how you -- right, right? anyway, so then he sort of takes that walk, right? i'll see you later. this is fun. i'll see you in a second.

i'm going to government. he, then, does his work in government, returns, and then won the governorship and all of the rest of didn't. he didn't. we've lost. you know this. corzine's announced he's heading back to wall street of the new executive specializing in futures and derivative trading. now corzine's not a regulator but it goes to show how advertise is for finance professionals to move between the two worlds. you go to wall street, you pick up the cash. you then buy your way into politics. potentially take care of your friends. they certainly have changed a lot of laws and delivered a lot of money to the finance industry with no strings attached. whether it was appropriate or not. and whether it is the cops on the take from the crooks or just down right bumbling and fumbling, we definitely need a big bust of this broken system. the problem is so far neither senator dodd nor congressman franks' bill does anything about any of the problems that i've discussed.

no change to the credit rating agency. and no barriers to the revolving door between the government, the s.e.c. and wall street. joining us now a man that is intimately familiar with all of these problems, michael lewis, his latest book, "the big shore" which basically captures so much of the culture going on wall street at this point in time. just hit number one on the new york times' best-seller's list. chronicles that downward spiral. and michael, you've made it very clear. cops working for the crooks. everything that i was just discussing but how do you stop it. >> you put it a little bit more bluntly than i do, dylan. but it is no question that there's this problem of a revolving door. the last -- three of the last four directors of enforcement at s.e.c. have taken up resonance on wall street. you know all industries have this problem of regulatory capture. but when the difference between what you're paid to work at the s.e.c. and what you're paid to work at goldman sachs is so vast, it's almost hard to imagine a world in which they will regulate them.

>> so how do you address that? do you need a law that says if you go to work as a financial cop you cannot go work at goldman sachs at least a ten-year cooling-off period? >> that's probably not a bad idea. some sort of cooling-off period. but you know, the bigger problem is that you're asking these people at the s.e.c. to police a system where the incentives are totally screwed up. >> what do you mean? >> well, you explain to me why a big wall street firm should be able to trade for its own account in securities it's same securities as it is advising its customers to buy and sell. >> where you can basically trade against your clients? >> yes. in fact in the bond market it's become routine. it's become just assumed on the part of the customers that the bank has some agenda. why there isn't like a wall dropped down between those two businesses, and you say you have a choice. you can be a trader. a proprietor. with your own money, yes go ahead. or talking to customers and giving them advice. and that, if you did -- if you are -- if you made just that change, you would effectively break up the firms.

you're at goldman sachs, go two ways. there would be a business that would advise customers and a business that would be involved in trading. so you've got these -- you've got these built-in, why for example do the wall street firms pay the rating agencies to rate the bonds that the wall street firms are creating? when you have those incentives built into the system you have -- you know it's going to be inherently corrupt. no matter how good the people are, they're going to be constantly faced with pressure to behave badly. and when you've gotten an industry so vast and so wealthy with those sorts of incentives i think it is impossible to police so change the rules first and give the regulators that's even possible to regulate, and then, and then sort of deal with this problem of the police force being inept. >> and where would you begin the process of creating incentives for honest capitalism where people have to make good decisions with money in order to make more money? i have to actually find an interesting business that i think will actually add value and create product and invest in it to get rich as opposed to just making bad decisions. >> yes. one of the incredible morals of

this story that we've just lived through and written a story about the collapse of the financial system. and there are people who got rich because they made smart bet but even the people who made the dumb bets got rich. everybody got rich. just being -- having a seat at the table was a license to get rich. so the system is broken. it's pretty clear the society understand happens the system is broken. i think it's even pretty clear that the people in washington understand the system is broken. and so i -- i actually think that reform bill is the beginning of a discussion that could lead to pretty dramatic reform because the politics are so clear. i mean who is going to stand up and say, we want to keep this? i mean, it's crazy. >> if you were to look at the primary offense, which is, risk transfer as a business model. i will hide this hot potato and give it to somebody else. so i've got it. i've taken a bunch of money and new now you've got it and aig. whether it's a repo swap. or reinsurance policy with somebody else, it's all of the same principle, which is, i will hide my risks so that i can take

more money. and ultimately the risk was hidden at the u.s. federal -- the federal government. >> that's right. the federal roov. >> how do you stop that? >> well, a lot to answer that question. but the broad thing is that -- look, wall street is supposed to be a handmade into the productive economy. and it's supposed to do this by allocating capital intelligently and it can only do that if the risks are transparent. if they're clear. and what is going on in the financial system for a while is they've been -- is the risk's been disgi been disgiegsed as you say by making it so complicated. the issue has to be on transparency so a very simple rule that would solve a lot of problems is -- is if everything that wall street traded, everything wall street traded, had to be traded on screens, you could see the prices, and through clearinghouses and through exchanges. so that it was -- >> sure. >> so you could see the risk that was being taken and you could see the prices that the market was assigning the risk. so that when goldman sachs goes

to aig and say -- and says, would you like to insure $20 billion of subprime mortgage debt? aig can look at the screen and see where that's trading in the market rather that being a deal cut between just two people that has enormous consequences. >> you're optimistic that we'll actually get real capitalism back in this country. >> i do. i do. yes, i am. because i think that the politics are so clear. >> listen, michael, a pleasure to spend a little bit of time. thank you for paying us a visit. the book "the big short." i didn't have enough time for "dig list." ninchts t. chemist says he can create energy with a water bottle. mimics how plants take sunlight, combine it with water and make energy. the future of energy may well be in our pockets in your hand. you may have a little bit of energy bottle with you. i can't help but talk about these things because i think they're very exciting. anyway, up next, is george w. bush busted? the video of our previous president in haiti that has a lot of people doing a

double-take in his relationship with president clinton there and then our town square today the devils casinos, ed, to vicky ward taking us inside of our new book with her insight into the toppling of lehman who may be one of the chief propirietiors. lehman brothers had an interesting business model. for highway safety calls it a "2010 top safety pick." consumers digest has called it a "best buy" two years in a row. and with a 100,000 mile powertrain warranty... we call it...peace of mind. chevy malibu. now, qualified lessees get a low mileage lease on this 2010 malibu ls for around $199 a month. call for details. see your local chevy dealer. it feels like a liner, but protects like a pad. because it absorbs 10 times more. there's nothing quite like it. carefree® ultra protection™. feels like a liner, protects like a pad™.

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first up republican congressman, the texas lawmaker, saying that the american people should no longer have the power to elect their senators? really? he says we should repeal the 17th amendment which in 1913 took that power away from cigar-filled backrooms of state legislators. >> the 17th amendment took out the last check and balance on use of patient on state's rights. it's time to get the balance back in place. let's get an amendment that gets the balance back into the country and the constitution before this congress destroys what's left. >> why do this? mr. gohmyrt thinks it is the solution to the health care bill that just passed to allow politicians for the senate to be selected in backroom deals when the exact problem is backroom deals made by democrats that cover the uninsured and catered to special interests. we think more democracy, more

transparency, not less, is more likely the answer to this one, no matter what the problem. next, what exactly did george bush do with bill clinton's sleeve yesterday? the two former presidents were down in haiti to oversee quake recovery efforts. shortly after shaking hands with some quake survivors, mr. bush, you could see it here, appeared to wipe his palm on mr. clinton's sleeve. now the intention behind the gesture is certainly open to interpretation. former president bush could had been just signalling to clinton that he was ready to move on. it's unlikely any of us will ever know, but one thing's for sure, it kind of looked a little off, right? anyway, i don't know. up next in our "townsquare" the devil's casino at lehman brothers a fascinating look at collapse and help trigger the financial meltdown and why it could happen again as our government continues to legalize wild-risk gambling with other people's money. why there are record bonuses last year on wall street and yet no reform. meanwhile on "hardball," chris matthews talks to congressman

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all right. welcome back. to the "town square" today. today a tale of stranger than fiction on wall street. this one indeed true. if you watch us regularly, you know about greed. book-cooking, outright lie, hiding risk, buying out regulators, regulators watching porn, you pick it, it took down not only lehman brothers and allowed dick filled to take $5 million out of our economy in the process but was only one of many banks exhibiting

unfortunately all too similar behavior in a new book "the devils kasino" for the first time ever reveals how four working class guys from long island, more from wall street's good guys to some its most corrupt players whose actions nearly collapsed the entire u.s. economy. joining us now the author of that book "vicky ward" also a contributing editor for "vanity fair." congratulations on the bill. >> thank you, dylan. >> and i will quote from the book "ceo dick fuld neither a leader but a dazzling intelligent but many years widely considered as someone who had very little to do with his employees or business operations." does that further indict him for his business practices or does it exonerate him in your view? >> well, i think, well, legally it has to indict mimt ceo's not supposed to be disengaged from his business. he's supposed to be running it. having said that, i think that what the book -- the book is about four people, primarily as

you said. and the lehman president, joe gregory, was a master at disguising just how machiavellian what he was and going on at lehman. so i think in fairness to dick fuld he wasn't the only person blinded as to also -- all sorts of human resource maneuverings and things happening, the leverage being taken. joe gregory fooled him and fooled a whole lot of are people too. >> did you get the sense, or maybe you know this in the book, that hiding risk -- >> yeah. >> with the repos on the 105s was a business model. basically take on as much risk as you can, take your garbage, hide it when it is necessary and take more risk? >> yes. >> that's fraud! in my book. >> it was a way of life at lehman and not just -- the story starts back in the 1970s when the traders would hide their

volatility you know and if someone came in and see, they would take the cards off of the wall and put them back when visitors have gone away. they started to lie one of the senior executives told me right after the mexican crisis the mexican cries in 1994 they took massive bets to survive the crisis in 1998 and certainly in 2008 they did the same thing again. this time -- >> wrong. >> the bets were wrong. >> how much money did these four men take out of the system to pay themselves personally while running an operation like this? >> well, one of them who's really the best of all of them in the book, was -- became sick of what overcame. he gave his bonus back in 1996. spread it among his employees and quit. >> because he knew that they were taking money? >> he said what have we become? we didn't set out do this. another of them died tragically right after he was forced out. leaving too, steve lessing and