allegations that big bank lends colluded to kick people out of their homes and cover up and underlying fraud in the relationship between the bank lenders and the government. we'll have more on this coming up, including an interview with ohio's secretary of state, who has just launched an investigation into the fraud charges associated with foreclosure. and carl denyinger, founder of the tea party movement and a man fired up over this housing mess, wrote a spectacular open letter today to democratic leadership. we'll have him on in just a little bit. first another economic battle being fought every day in this country. let's call this the war within the job wars. men on main street getting screwed. but guess what, the same thing is happening to women on wall street. on average in this country, women make over 70% of men's pay, that's up significantly since 2000, it sounds good, right? but don't forget women have only started to catch up because men have taken such a big hit in this recession. so while equal pay is emerging on main street, it's emerging

for the wrong reasons. flip the coin to wall street, where the story is much different. women have taken a huge hit. not just recently, but over the past decade. as if making 64 cents on the dollar wasn't bad enough ten years ago, women working in the financial sector now make just under 59 cents for every dollar that a guy doing the same job takes home. and when it comes to keeping their jobs, five times as many women as men have been laid off since this recession began. nancy davis, one of those women, she was laid off by jp morgan-owned firm shortly after leaving goldman sachs. nancy featured in a new bloomberg "business week" article out today, that was written by don kopeche who joins us in new york and from washington emily irvine fighting her own war. donna, i'll begin with you as the author of the piece, frame for us the magnitude of this problem? >> well women, ad as you said

are losing their jobs, lost their jobs at almost six times the rate of men during this recession on wall street. and the pay disparity for women on wall street is greater than any pay disparity in any profession anywhere. nationwide it's like 80 cents do the dollar. on wall street, women are making about half what men are making. >> why is that? >> i have to say, my experience at goldman, i was there for a decade, and at highbridge, which is owned by jp morgan, was very positive. i never had any pay disparity or discrimination against me. i think i was always treated fairly. in fact i think they were very accommodating to me as a working mother. >> so they paid you, so that they, all the other women who weren't making money, you were getting the money, is that how it works? >> dylan, you're twisting my words. >> i'm teasing. >> i can't comment on the pay disparity because i never had any issues with that and with the discrimination charges, i can't comment on that. i never saw discrimination with my ten years at goldman or my

time at highbridge which is owned by jp morgan. everyone was very fair to me and treated me very well. and the reason i was laid off was because when they were hired me, they were expanding into a new business. and then as the market and the economy turned south, things changed, obviously. >> i want to make sure i understand this correctly. so your story, dawn, is about discrimination against women on wall street and pay disparity. but you would say you were never discriminated against and never had any pay disparity. so she's the exception? >> she's the exception, not the rule. however, i thought nancy was great example, because she's incredibly qualified. she's a derivative specialistth and yet, she still is having trouble finding the job that she wants right now. now that she's been laid off. >> do you think that's because you're a woman? >> no, i think it's exactly because i'm a derivatives specialist. derivatives are basically a bad word on wall street. >> it's more derivatives than gender, right? >> but honestly, derivatives you have two sides to every trade

and derivatives can be used in a position tiff way to reduce risks and mitigate coststh and the way that i always used derivatives and the people i worked with was to kind of take the tails off the trade. >> well derivative is just a tool. i can use fire to cook dinner or i can use fire to burn down the house -- it's a tool. i want to bring in audrey irvine, laid off her job as a legal secretary. if you look, audrey, do you feel there was a propensity or a culture of discrimination against women in your workplace? >> well, legal secretaries are by and large, women. not exclusively any more, but for the longest time, that's who was sitting at the secretary's desk, was a woman. so discrimination? i wouldn't say you could call it discrimination. more of being siloed into that. once you become a secretary, also it's almost impossible to get out of that position. as soon as someone sees that you are a secretary, they don't want

to think of you for any other kind of job. but only as being a secretary. so i think being a legal secretary is very different in terms of any kind of discrimination issue. i also don't think that whether you are handling derivatives 0or whether you're a legal secretary, i think all of us are in the same boat. i'm not so sure there's a difference between men or women or derivatives or wall street or legal secretaries on main street. it's all about a jobless recovery. and that's not a recovery for those of us out looking. >> go ahead, nancy, you agree with that? >> i definitely agree with that. i think it's been challenging for a lot of people to find the right job and to find the opportunities. they're just not there. and people who are finding jobs are taking kind of the job that isn't their ideal. it's just something for right now. because there are not many things out there. i've been fortunate to kind of been looking -- i've been looking for a place that i can stay long-term and something that can really continue my

career, build my career and continue. like i said, i was at goldman for a decade. i want to find another place i can stay for another ten years. >> go ahead, dawn. >> what we found in our research is that women aren't necessarily being discriminated against outright. but what they're suffering from is some sort of a subconscious kind of discrimination. where the men that are doing the hiring would like to hire guys that are just like them, that they're comfortable with, that they're familiar with their background. and so -- >> isn't that a problem, not just on wall street, but in a lot of places? >> yes it is. it's a little more of a possible on wall street where you have such a male-dominated profession. but we're seeing that women aren't necessarily you know, suffering the kind of discrimination where men are grabbing them and those sorts of things any more. but it's more of the subconscious type of discrimination. >> and do you think that that's unique to women? or do you think that goes to black candidates or latsenno candidates? >> yes. >> anybody who is not like whoever the boss is, has a

higher threshold to get hired? >> it cuts across race and gender, socioeconomic circumstance. and another issue that affects women disproportionately to men is when they have children. and when they have mothers, it becomes an issue where people question their competence. question their commitment. so that's an issue. >> i guess what occurs to me listening to the three of you, we know that the rate of hiring in this economy is incredibly tepid or nonexistent, depending on the industry. when you have a weak environment of any kind, the ability to abuse some of these types of things that get covered up or swept up in the bullishness, whether it's hiring people like me, not like me or men or women or whatever it is, quickly becomes much more. in other words as the numb of people being thrown off the boat increases, those with the strongest ties to whoever's in charge of the boat are the ones going to be the last ones thrown off. and they tend to be the ones that have been there the longest

or the closest to the boss ort owner. is that fair to say, nancy? >> i think that's a real generalization. i don't think it's really fair to say, my experience at goldman and high bridge was always very fair. i don't think it was the person who was closest to, had the best personal. i think it was all based on production and your performance and in my case, you know, they were expanding the business and then decided not to expand the business. because the market changed. and it's a risk out there in the world, like things change. and like i said, derivatives can be used in a speculative way. but the way i ualways used them was in a way to enhance returns and mitigate risk. >> if only the other $600 trillion were useded same way. nice to see you, thanks for your time. coming up on the "dylan ratigan show," crimes, hiding crimes in the housing market. what wall street and washington do not want you to know. also the latest hot air coming out of washington. the party of food stamps versus

the party of paychecks we're told. what does it have to do with real solutions for an economy that's not creating jobs? we'll mix it up. plus who killed the health care public option. a real-life murder mystery and new evidence has the trail leading right back to the white house, surprise, surprise. hi. you know, if we had let fedex office print our presentation, they could have shipped it too. saved ourselves the hassle. i'm not too sure about this. look at this. [ security agent ] right. you never kick off with sales figures. kicking off with sales figures!

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all right. time to mix it up with the day's headlines, food stamps versus paychecks in the political arena and little inconvenient truth about the health care public option. we start with nancy pelosi

attacking newt gingrich over his most recent advice to republicans. urging his colleagues to define the democrats as the party of food stamps and republicans as the party of paychecks. pelosi is not happy about that. >> what is the message there -- that government is working for somebody else and not you? if you don't have food stamps? i think this is a very, very dangerous terrain. >> let's look at some of the hard numbers, food stamps rose to another record high in july and the government estimates one in eight people participate in the program now. meanwhile you want to talk paychecks? real wages over the last ten years have been entirely stagnant. so all the political spin aside, the fact of the matter is that neither party wins on this, the american people lose and the six industries that control our government and are extracting the wealth and the wealth of the middle class in this country are the only winners. here to mix it up is the "washington post" and the "washington independent." i don't even know where to begin with this, jonathan caepart.

if you were to look at this as a political strategy, is the belief basically that the american people are oblivious to what has gone on in this country over the past 20 years? and just think that -- it's a stupid slogans will save us? >> well, sure. because they've worked in the past. you know, reagan talking about welfare queens. you've got democrats, democrats do it as well. always talking about how republicans are trying to kill social security. we just earlier this week, we're talking about the republicans around the country who want to do away with the minimum wage. this is something that goes on all the time. but what newt gingrich is doing, is he's demonizing people who, a whole lot of people, who are in trouble. i mean, this isn't a situation in this country where unemployment is at maybe 7% and some people are feeling the pinch and can you make this argument and gin up the base. the base is some of those people who are getting food stamps. people are hurting, this doesn't

help. >> david wiegar. our economy has a basic problem. we've got structural unappointment employment and we've got a political process that is clearly inefficient at best, disastrous at worst. how much longer can these stupid slogan fights between these two parties continue before something gives here? >> well it's already, it's already given. these slogan fights don't matter in the discussions we have outside of washington. i don't know why pelosi swatted this ball because i think jonathan ably described the politics behind this. these politics have never work ford democrats. what democrats have been missing for the last two years or longer, is a positive argument for why it may not sounding like spending a lot of money on this program may be a way to get out of the recession, but trust us, we need it instead of explaining why the government needs this until the economy recovers, she took this softball into the gut

and took a partisan fight that never benefits. >> are these slogans, jonathan, just a smokescreen by both politicians to avoid dealing with the real elephant in the room? which is that too many of them are bought and paid for by special interests one way or the other, period? >> well that might be. but i think pelosi probably saw this as an opportunity to show or to try to show that the republican party is removed from the everyday suffering of people. you know, i was at that meeting that the speaker had with columnists on friday. and it was clear they were going to drive home this idea of jobs, jobs, jobs and what they're trying to do to help the american people and get the economy moving again. and so, to have you know, a foil like newt gingrich is terrific, from her perspective. >> one thing that hurts, though, is the financial reform not driving investment and this next story, which is also a story about the democrats. where it looks like someone, a democrat, accidentally told the truth about the health care public option. so while the democrats try to

act like they're in touch. if you believe this most recent bit, it's an act. former obama adviser, tom daschle in a recent interview, daschle said in early july '09, the public option was taken off the table as a result of the understanding that the people had with the hospital association, with the insurance association, and others. they wanted to keep those stakeholders in the room and this was the price some thought they had to pay. bear in mind, behind financial services, health care is the second biggest contributor of political donations in this country. i guess that's what it means to keep them in the room. keep the money coming in. despite that deal, the president was still saying he wanted the public option later that same month. >> this is controversial, and i understand some people are worried about this. we do think that it makes sense to have a public option, alongside the private option. >> of course the public option didn't make its way into the final health care bill after daschle's initial interview was posted, he tried to walk it back saying the public omgs was

dropped only when it was no longer viable in congress, not as a result of any deal cut by the white house. say what you will, this continues to taint the legislative process, jonathan capehart, with the air of control from industry. >> look, dylan, you were talking about this when it was happening. you were suspicious from the very beginning. and unfortunately, or maybe fortunately for the american people, they watched this slow, agonizing process of putting together this health care bill minute by minute. this is sausage-making at its finest, if you will. but also at its ugliest. >> dave weigel, to go to the essential core of all of this, what do you think is the next step for the disrobing of the political process, which continues to reveal itself as again, a bought room working for special interests? period? i don't want to sound like a broken record, but boy, i watch the news come through and the

concept of some sort of policy arguments based on principles is laughable. >> the record is playing something pretty important. i think we'll learn more about this frankly after the election. after there are democrats who no longer have much to, much utility in defending what they voted on. and when they can open up a bit more about this. when it's no longer in their interest to defend the health care bill. but they're speaking pretty eloquently now in the way they're not defending much of the bill in their own re-election campaigns. remember, the theory was that they would pass this, and as ugly as the bill was, and as much of a rub goldberg machine as it looked like, it was going to become more popular over the course of the year. russ feingold, steve israel, a couple of democrats are saying it was worth it to pass this mess. we've got people that keep staying on the insurance until they're 26 and we've got a ban on preexisting conditions, denying you health care. but the rest of it has been unpopular and they thought they were going to have the mantle of

not just reform, but reform that took on the hated health care industry. instead they're seen as captured by that, frankly. captured by that. the funny thing that strikes me, campaign after campaign, is republicans run against them for passing a bill that pharma liked while cutting medicare. they would have had a medicare buy-in and not been vulnerable to the attack. >> how much of a problem is it for the democrats to be long a policy that have some very good components, but never dealt with the issue of cost? and in fact when you look at the revisions after, it made it look worse than it was. >> there are people in the administration who would argue with your characterization. but i do think that you know, folks on the hill and folks in the administration probably made the calculation, look, let's get the floor of this house laid database. let's lay down the foundation and then we'll be able to go back, add to it, fix it, change it, along the way. but we at least have to get this

ball rolling. so i think dave is right. after the elections and you have democrats who are more willing to talk more openly about what was going on at that time. we'll have a clearer view of where they might be going after the 2010 mid terms. >> it makes sense. but what occurs to me is the danger of selling somebody an automobile, but only giving them half a car. i understand that they want to get the health care thing going. but you wouldn't be very happy if i charged you $30,000 and sold you half a car. and on the promise that i was going to finish it later, right? >> no. but if you do end up finishing it later, i'll be very happy. >> touche, i agree with you. >> it's trust. and trust in washington is -- >> yeah. touch and go, i understand. but i trust the two of you, so it's a start. jonathan capehart, dave weigel, up next, the first-ever daily rant, talking why firefighters stood by and let a house burn in

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you forget things. and i did. i suffer the consequences for it. so i'm not a freeloader. i've worked all my life for everything i got. >> no firefighter wants to stand by and watch a neighbor's house burn. but we're sometimes put in this predicament through the subscription response program. >> that is jim frannic, whose home recently burned to the ground and the local fire chief defending the actions of the crews who did nothing to say it. crayonic calling 911 but firefighters were ordered to stand by and watch as his house was destroyed. all because he had not paid a $75 fee. sparked a debate about limited government. and ala carte government. dr show regular karen finny fired up about it. >> i want all of us so sear the image of mr. crayonic's burn

home in our mind. so when we hear the right wing rhetoric about the virtues of limited or less government, we remember that what they're really talking about is an ala carte system where there can be no mercy. the firefighters were following orders when they left his home to burn. do we want to live in a system where firefighters have to check a list to see which homes they can save in a crisis? imagine in the aftermath of hurricane katrina, if rescue workers had been working off a check list to determine who got save and who got stranded on their rooftops. obviously in a small economy, small towns like cities and states everywhere are facing tough choices trying to provide services with limited budgets. but let's forget about big versus small government. how about effective versus ineffective. in this county, ineffective decision-making by what happened to be an all-republican county commission, shows ideology in politics over potentially effective solutions for the

peel. not long ago, that same republican county commission rejected a proposal that actually would have created a countywide fire department. and the plan called basically for raising about half a million dollars from either a 13-cent property tax increase, or other minimal fees. the commission, the commission voted against the plan because they wanted to be able to crow about keeping taxes low and limiting the size of local government. where have we heard that before? if they had adopted the plan, this county could have offset the cost through hundreds of thousands of those evil big-government dollars that we always hear the right wing railing against. but instead, gene crannick's house burned to the ground. so when you hear about limited or too much government. i say remember this county. and does repealing parts of the health care legislation or denying health care services to someone who might be in the country illegally really mean an ineffective ala carte government? >> sometimes it might seem that

way. karen, let me ask you a few questions. i accept your premise, that the debate shouldn't be big versus small government. but debate has to be effective versus ineffective government. efficient versus inefficient government. and the place that the anti-governmentites, if you will, reside, is that the government is by definition, inefficient. that the government is by definition, wasteful. and so the only way that i as a -- god-fearing american can fight this inefficient, wasteful government is to make it smaller. how would you reframe that debate, such that i'm now moving towards an efficient government. as opposed to fighting all government? >> well, again, how about looking at it just from a practical sense? so like these commissioners in this county, if they had thought about a 13-cent property increase, we could get federal funding to offset those costs, it might make more sense than

letting homes burn. and one thought here is that legally, actually the insurance company could actually sue the fire department. and if that happens, that's going to cost them more than the $75. and i think it's also, dylan, when you think about what happened after 9/11, we needed to make changes in the way we were gathering intelligence and dealing with homeland security. that made sense. >> i guess to back it up a little bit. i don't disagree with a lot of what you're saying. to back it up a little bit, when the government has vast sums of money that are distributed in earmarks and they can't pass any of our transparency bills so we can see how they spend it. instead they hide all the earmarks in 535 different websites as tom coburn will gldly tell you. when the government has duplication of the exact service, federal, state, down the line. when the government is clearly taking money in secret as jimmy williams, our friend and

neighbor will happily tell us. those base things provide incredible ammunition for the stupid ideas that get through in government, because of the apparent level of corruption in the process. am i wrong in that? >> you're absolutely right. dylan, i think it comes down to something i think i've heard you talk about before. and that is that we, the people, have to take the responsibility of trying to hold people accountable. and it's not always easy. there's a lot of shell game going on. but again, i am just suggesting that we ask ourselves when we hear this rhetoric, that we take a step back and actually think what are the real-world consequences of that. because in this instance there's a very dramatic example of what can happen if we don't do that. >> right, the easy solution is to say, get rid of the government and then you end up with what you're talking about, the hard work is for everybody to show up to the table. and actually solve some of these actual problems. which i know you're doing and i thank you for it. >> thanks, dylan. >> karen finney.

still ahead, a million small crimes covering up ha is a national disgrace. the growing problem of foreclosure fraud and perhaps more importantly, the underlying heist perpetrated by banks and politicians. to this day. think of the foreclosure games as the second lie that must be perpetrated to cover the first. but first, help wanted. actors who can play hicks. some controversy from recent ad in west virginia.

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well we're back with the political version of madmen, first up, an ad attacking democratic governor joe mansion in west virginia. starring down-home fellows, speaking the plain old truth. >> joe's not bad as governor, but when he's with obama -- >> he turns into washington joe. >> and washington joe does

whatever obama wants. >> we better keep him here in west virginia. >> away from washington. >> the ad was cooked up by some city slickers in philly. the casting call saying they were looking for a hick, blue collar look. telling them to bring john deere hats. mansion says the ad was an insult to west virginians. no kidding. what are the accept, the ad has been pulled. speaking of actors, rand paul in kentucky hired an obama impersonator for his new ad in the senate race. >> i know i can count on conway to vote for more spending and debt, bigger government and higher taxes. there he is now. mr. jock conway. >> now, rand's faux obama isn't half bad. but pretending to be somebody you've not in order to influence the public, we don't need actors for that. we've got plenty of politicians who already live that way. just up next, motive behind the

mortgage mess. why banks and politicians are complicit not only in an ongoing foreclosure fraud, but why that foreclosure fraud is being perpetrated at the tip of an iceberg, people. a fraud the scale of which is hard to comprehend. we're back after this. [ male announcer ] prilosec otc traveled to fairbanks, alaska. home of one of the coldest, longest nights on the planet. and asked frequent heartburn sufferers, like carl, to put prilosec otc's 24 hour heartburn protection to the test for two weeks. the results? i can concentrate on everything i'm doing, not even think about it anymore. since i've been taking it, i've been heartburn free, which is a big relief for me.

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i just know somebody is breaking, somebody broke into my house. >> did they kick the door in? how did he get the door open, do you know? >> i don't know. >> one woman's harrowing run-in, not too long ago, not with a burglar, what turned out to be a jp morgan henchman sent to change her locks. >> not knowing who was actually at my door or how many people or if the person had a gun, a knife, a sex offender -- i was just frightened to death. i would say that the banks are robbing american people in plain english. >> that story, just the tip of the iceberg when it comes to lenders trying to speed or fraudulently foreclosure in this country. but why would the banks be so anxious to behave this way? and why would politicians and the treasury department allow them to do it? take a look. >> most mortgages are backed by the government. in order for a bank to get that sort of backing, it must fit two

criteria. one, borrowers must be verified by the banks and their agents, as qualified. and two, the lenders must fill out paperwork accurately, and make sure that when the home's title changes hands, so, too, does the documentation. but during the past two decades, a whole lot of the time, that never happened. why is that? for the banks, the motive is simple -- money. banks profited by packaging and selling the toxic home loans and profited again, by betting against those same securities. a bet in essence that a fraudulent loan they made wouldn't be paid back. but why would politicians allow this? the simple answer? to stay in office. giving people houses makes them happier. and makes local politicians more popular. at the same time, the financial services sector, the banks, making all the money, were donating to the political campaigns. in 2008, the financial sector

was the top donor to both democratic and republican candidates. so where are all of these fraudulent loans now? >> you own them, at the federal reserve, fannie mae and freddie mac. the banks and politicians will do whatever it takes to prevent a legitimate foreclosure proceeding, one that would easily reveal the lack of qualifications and bad documentations in the loans the banks have been selling and giving to the government for years. and finally, the last and most important why -- why isn't our government dealing with it now? perhaps because that would reveal systematic criminal and civil fraud at the highest levels of america's banks and political corridors. we know who's fighting for the banks with all the money going to our politicians. again, from the president on down the line. no one has given more money to all of our politicians than the financial services industry. question is -- who's fighting for everybody else? and joining us now is jennifer

brunner, ohio secretary of state. she's launched an investigation into the specific foreclosure proceedings in her state and carl denyinger author of the "the market ticker" who caught my attention today, with his fiery open letter to california democrats on this very topic. one of the founders of the tea party movement going back to this original issue a few years ago. jennifer, i'll begin with you. can you give us a sense of what you see as the problem on the foreclosure side right now in your own state? >> hi, dylan. i'm the secretary of state of ohio and i license the notaries in my state who notarize documents for instance for some of the home finance companies, the banks that are processing these foreclosure documents. what we're seeing is for instance, eight notaries notarizing 18,000 documents a month. and hearing stories that the notaries filling in information to the document. handing it to the signer. who is actually named as an officer of multiple banks and

signing multiple documents to create a chain of title or a list of owners and then the notary handing it back to the signer. the signer signing it and the notary notarizing it. i don't have the authority to actually revoke these notaries or to prosecute. so i send it to the justice department in august to have them take a look at it. >> and have you heard back from them? >> i've been in some contact. and out of respect for the justice department, i've said that i finally called in late september and said, am i allowed to say anything about the fact that i've referred it to you? and i was given the go-ahead. >> listen, carl, i want to read everybody a little bit of an excerpt of the letter you wrote today. very powerful. you say, this is clear evidence that these securities, the core of all the foreclosure and housing mess, are fatally defective. you say there's no solution to this problem that is both lawful and yet preserves the fiction that all is well with this

edifice. and yet at the same time protect the chain of title in housing and the rights of both homeowners and securities buyers. it's almost as if you're saying we can keep the system we have, but then we have to forfeit our sense of property rights in this country. or if we want to reestablish property rights in this country, we have to deal with the fraud or the malpractice that is at the core of this, is that a fair interpretation, carl? >> yeah, that's essentially the problem. what's happened here, dylan is that these people at the inception of all of these loans, knew they weren't any good. we now have this, it's been discussed in fcic hearings and yet, these securities were packaged into these specific types of conduits. the problem is the irs regulations saying you have to convey the paperwork. and in addition to that, there are specific standards for the amount of nonperforming assets or things that you could foreseeably see a default on, that can go into these structures. you can't get there from here,

when 30 to 90% of these notes are found not to be in conformens. and that's the testimony we've had over the last six months. so you can't go back and unbreak this egg. it's already happened. we now have either a bunch of these structures that were put together with defective instruments, or the instruments were never conveyed in the first place. and because the dates have passed where you can add things into these structures, there is no fix for this without violating the tax preference. i don't know how you solve this problem. the only thing i can come up with is force this bad paper back on to the originators, repay the mbs holders, who bought these things thinking they were good securities and actually bought an empty box. >> i'm going to interrupt you just because we're dealing with -- i want to make sure that anybody who is watching this can understand what it is you're saying. the point is that the people who bought a lot of these securities was your pension fund, the teachers' pension fund, the

judges' pension fund, the police and firefighters pension fund. and those pension funds were sold these mortgages on belief and verification, both in the ratings agencies, from the banks and implicitly from the government, that those loans were good. and when we find out that the loans were not good, through these foreclosure processes that they're trying to avoid, you either have to pay back the pension that you've raped, or you have to ignore it and continue to drive the system the way that it's being driven. but that doesn't seem to be politically viable much longer. if you look at this, jennifer, how much longer can we avoid dealing with the core issue of banks making money by selling nonconfirming loans to the government by the trillion, and then going forward, betting on their collapse and donating to politicians who say it's okay? >> well this was part of the

reason why i made the referral to the justice department. i knew it was happening across state lines. and i also knew that the notary issue was really the tip of the iceberg. that when you start to look at how sloppy the banks have been at keeping their chains of title in line. they asked consumers and tell consumers they have to follow the letter of the contract between the bank and the consumer. whether it's a credit card or whether it's a home loan. at the very least the banks should have to follow the letter of the law. in this case i knew that we would find situations where there was not only sloppy notarization, but actual lapses and gaps that really leave the final person who is bringing the foreclosure action in a position where it may not even be good and where clearly, you've got a homeowner who may want to find out who really is the party in interest. or have an attorney for them looking into the predatory lending and it's very difficult to get to the bottom of that. >> karl, if you were to look at the core issue, that the savings of america was the piggy bank that this type of product was

being sold to. that the savings of the america whether it's new york state pension managers. are the ones that got stuck with a lot of this paper. not to mention fannie, freddie and now the federal reserve. if you were to look at that core issue, and then you were to look at the understandable anger, not just from the tea party, which i know is, a constituency that you were catalytic to at its beginning. but across the entire political spectrum. why do you think we haven't seen the organized focus from the tea party on this issue in a way that is effective, and for that matter, an organized focus from anybody else who is pissed off, whether they're a tea partier or not? >> dylan, you have to look at it from the standpoint, you don't present false documents if you have real ones. the real ones are gone, they were intentionally obscured. if we stant to look at this and

what if we find out that of these $6 trillion of securities that are outstanding right now, half or more of them are defective. you put them all on the banks and they all blow up. we have a resolution authority under frank dodd, how about if we use it? >> can i leave it right there. i would love to see him use it. especially if this is all fraud. >> i hope you both come back and i hope that the two of you remain as vigilant on this issue of the compromising of property rights in this country as i intend to. and if you're watching this program, please take the time to either rewatch the segment, or if you can't believe everything that you have just heard and you're interested in learning more about it or have the opportunity to reread it, to understand it, i understand it is technical. i advise you to check out not only the market ticker in and karl's open letter, but a blog that i posted today to the front page of the "huffington post," that explains how deep-seeded

this problem is in country, property rights gone wrong. if the banks have stuck a bunch of fraudulent loans at the federal reserve, fannie and freddie and are trying to cover it up with foreclosure fraud, please, lets us see the justice department do something to defend the american people as opposed to the largest banks in this country. for a start. coming up on "hardball," the tea party with a whole new crop of lawmakers in its sights. chris asks is no republican conservative enough for these people. but first here on the dr show, your government bought and paid for. our next guest says duh! dyl dylan, come out of your slumber and welcome to reality. a man who says not only this is going on, but it may be worse than tammany hall. ♪ yes! ♪ look, they fit! oh my gosh, are those the jeans from last year?

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a little time in the town square for you. tammany hall in the '20's, a 19th century robber baron. you've got huge enterprises funneling money to bought politicians that continues to allow them to extract money. those were the bad old days. but in a surreal sort of way -- it's quite a bit like today. in fact, it was a chicago party boss who once said -- politics is the art of putting people under the obligation to you. no one better than a bankster at that. and so it goes these days. but with money. unprecedented amounts of it greasing the wheels of this

political cycle. some in public, too much in private. big businesses to labor unions. cutting checks like never before. with money flowing to outside groups, free to launch attacks on any candidate they choose. with little or no regulation. but the idea of an election bought and paid for by special interests is not news to our next guest, martin tolchin, who looks at me like a babe in the woods as i carry on about these thigs, he's co-author of a book "pinstripe patronage." it's a pleasure to meet you, sir. >> good to be here, dylan. >> describe to me the prevalence of the binstripe patronage you see today in the context of this country's history. >> the tammany folks were pikers compared to what's happening today. they gave out christmas turkeys, they gave people jobs and sanitation workers. today you've had two converging lines. you've had the soaring costs of

political campaigns, and at the same time, the soaring power of government, the soaring reach of government and the soaring funds disposable, at the disposal of government. so we've gone from the christmas turkey to the $1 billion halliburton contract in iraq. noncompetitive bidding, no competitive bidding. >> we had a whole list of a bunch of noncompetitive bidding. and that's tidally winks compared to the multimillion-dollar fraud i was just discussing with my previous two guests, who make no-bid contracts look like a christmas turkey. >> that's exactly right. and you know, government can make you or break you. but with the power of the campaign contributors actually to some extent the shoe is on the other foot. because these people put so much money in these political campaigns that the politicians

are obligated to them. and they have been calling the tune more and more. >> if you were to look at what, what has broken the cycle destructive and political corruption, it's failure to separate business and state that's really harming this country. clearly, 100 years ago when they invented the railroad and all the rest of it, it was a great idea to chop down every tree in california because you could make a lot of money, as long as you bought off the politicians. clearly running a systemic mortgage fraud, a multitrillion-dollar mortgage fraud and sticking the loans in the treasury and pay politicians to make sure it doesn't get audited or put back is great way to make a lot of money. how do we stop it? how did they stop it then? >> well in fact there is a difference, because in those days, the nations needed a transcontinental railroad. the nation needed to industrialize. and was willing to throw money away. these days, the nation does not

need a billion-dollar contract, does not need to have more contract employees in iraq and afghanistan. than u.s. soldiers and u.s. employees. does not need to deregulate major industries. does not need to let the banks run wild after repealing glass-steagall. these things are really counter to the national interests. >> what can we learn in brief, because we're going to fix it that's why i'm here, that's why you're here. there's not a shortage of people that sbentd to fix this, no matter how long it takes. in brief. i got 30 seconds. your guiding principle? >> not easy to fix. transparency is one way to go. public funding of campaigns is another way to go. get money out of campaigns