dylan, where i'm thinking, where is he going to take it. and because you're a man of genius, one never knows where it's going to go. >> thank you for the compliment. >> the professor of the university of tribeca. >> we're using up the balance of your time and we're going to use a moment of mine. >> go ahead. >> i couldn't help but notice you had chris hayes on the show today. >> indeed. >> i thought i was your favorite, first of all. >> come on, chris hayes is a smart dude. he's like you. all the smart dudes come to this show. him, you, you're all the same. >> i also noticed he didn't have to the wear a tie. >> that was his choice and not mine. that was his choice. i thought he looked very dapper without a tie. the truth is, are you wearing shoes today, dylan? >> yes, i'm actually wearing boots today. >> very good. >> again, i will -- >> you'll take it away. let's start your show. >> i will delude myself no longer. >> the show starts right now.

all right. good friday afternoon, oh, sorry, yeah, there. good friday afternoon to you. i am dylan ratigan. if you recognize that music, you know our big story today. aerosmith, "the same old song and dance," that is what we are getting from both sides in the so-called super committee in washington. the republicans, their plan $2.2 trillion in cuts over a decade, that is a pittance compared to the portionalty of our problems, it is an insult. $685 billion will come from cuts in medicare and medicaid. no talk of reforming the health system that's the most expensive in the world, obviously. no new taxes, that is the republican mantra. on the other side, the democrats, their plan, $3 trillion in savings, also a pittance compared to the size of our problems. they, democrats, say they'll get $1 trillion out of the tax base, $2 trillion in cuts.

no one talking about debt restructuring or the catalysts for explosive growth that could be released in solving our energy problems, infrastructure problems, health problems, educational challenges. instead, we revere the beauty of their pro wrestling while they preserve the status quo. so whatever comes out of this, by the day before thanksgiving, it will not come close to addressing the underlying structural issues of a broken banking system without capital requirements, a corrupt trade policy that is rigged to the benefit of those who would extract money from this country, our education, which is effectively an "f," especially in early childhood, an energy plan that prizes a debate over fuel sourcing, while ignoring the fact that our power generation efficiency is 34%. and of course, an auction-based electoral system where the person who wins the election is determined 94% of the time by the one who raises the most money. our first guest is a friend of the show, and he's more familiar with a lot of those issues that i just laid out than i am and

probably you are. and yet he still shows up to work every day. senator tom coburn, we are dealing with colossal problems. we were talking to the ceo of dow chemical, andrew liverus a couple of days ago about the need for a meaningful global debt restructuring, not piecemeal, and a path to explosive growth. why are we not seeing more provocative or diverse thought from the super committee? >> oh, dylan, i'm not sure you're not. i think the only thing you're hearing is what they want you to hear, as they get closer and closer in toward their cutoff date, i think you'll see a lot of movement. the hope would be is that they do something very big, that they would restructure our tax system in this country to promote growth, to direct capital in the way it should go, based on what's the best return for our economy as a whole. i'm going to cut them a little

slack, because all the public statements they're going to make now belie the fact that they're going to have to compromise if they're going to come up with something. and my hope would be that they would come up with something. whatever it is, if it's small, we're going to have to turn around as soon as that's done and then start doing the next large deal, because we have to ring $9 trillion out of our government over the next ten years to get in a position where we can afford the debt we have today. >> and that, your goal -- you say $9 trillion with the goal of being able to carry the debt load. and i think most people in america have a goal of explosive growth. it's why we work as hard as we do. and so it would seem that if the threshold is at $9 trillion to just manage our water, it would seem that we are in need of some fairly large thought. >> well, at $14.9 trillion of debt, what we know is that's suppressing our gdp right now, greater than 1% per year.

well, that's -- that 1% is a million to 2 million new jobs a year right now that aren't being created bu ed because of the de. if you factor in what could potentially happen to us after interests rising, which they will ultimately, after europe works through its problems, and the sovereign defaults take place that are going to take place, both if europe and in japan. if we're not positioned at that time to hand our own issues, then we won't be able to climb out of it, because the interest costs will be enormous. >> there is an emerging group of people, i mentioned bill gross at pimco, others, who are really arguing that we need a cohesive global group, meeting to talk about the debt the markets and how that could be restructured in order to either defer some liabilities, understand who's going to default and how that's going to affect the banking system, and basically figure out

what we're dealing with so that we can move to the growth phase. i'm interested in your thoughts on sort of the marshall plan framing for the magnitude of these problems. >> well, i think they have it backwards. i think if we would do what we need to do, and we can do so, still protecting those that are most dependent on us, still having a wonderful safety net in our country. if we would just eliminate the waste, fraud, and abuse in the programs that we have today, that's $350 billion. if we'd eliminate $200 billion worth of duplication that we have in that, that's $550 billion. if and if you reform the tax code, where you take down rates and get rid of tax earmarks, which there are true earmarks of about $400 billion a year, you're there. and the interest savings that would come from that, plus, you can downsize. i mean, we don't need enough nuclear weapons to destroy the world ten times over. we need enough nuclear weapons to be a deterrent and a strong

de deterrent. and our defense is based on our economic health. so what we have to do is, i think if we were to put our house straight and show the world that we're committed to doing what is necessary for our country to put our house in order, you would see everything else kind of work its way out. and i'm not so sure we need a global fix to the sovereign debt. what we need is healthy banks, healthy financial institutions that are based on transparent capital requirements, and a market that says you'll be rewarded for doing the right thing and punished for doing the right thing. and if we did that, i think you could lead the world out of this mess that it's in. >> and listen, you could the -- i certainly am not qualified to know the answer to that question. and i'm hopeful that what you're saying is correct. the one thing that i -- after three years of coming on -- i left cnbc in 2008, senator, and decided to come over here for three years and argue about health care and argue about energy and argue about banks,

and all the things that we all know. and what i have found is that any real argument in the political theater, whether it was with the health care legislation, only to watch $600 million come in from the health industry to prevent what i saw as a real debate on the drug companies, on fee-for-service, on monopolies, then i watched $600 billion show up in 2010 when we do banks, and instead of addressing capital requirements and the swaps market and exchange and all the things that could have been done, that's another $600 billion. and it's become apparent that if 94% of the time the politician who raises the money most wins, meaning if you are not the politician who raises the the most money, 94% of the time you will lose. simultaneously, i have a system where money is paid by the few hundreds of billions to ensure things don't happen, not to ensure that they do happen. and i don't see how we get to the resolution that you so articulately present, and i, quite honestly, would love to collaborate with everybody to pursue those goals, but quite

candidly, don't see how i can trust this government to do it by virtue of its structure, which is effectively an auction with the 94% number. >> well, i don't think you give the american people enough credit. i think what you saw in 2010, a lot of people who have been there a long time turned out of office. i think you're going to see -- republican and democrat. you're going to the see a lot of republicans losing primaries. you're going to see a lot of turnover in this next year. what we have is a problems with careerism. that's my diagnosis, as a physician. when the number one goal for a politician is to stay in office rather than do the best right thing for our country, you can understand why people might be skeptical. so if you talk about money and politics, the problem with money and politics is we have these stables of careerism that incumbency generates so much of an advantage over somebody challenging them. but what we've seen, recently, is incumbency is losing that

advantage, and the money is a marker, but it's not true the true marker. the true marker is american people have awakened. and they're on to the career politicians who are not going to vote the best thing for the country. you know, here's the great example. we see aarp ads all the time, don't touch medicare. well, the honest politician in this country that wants to fix the problem is going to say, aarp, what you're telling is a lie, because there's no way medicare will not be changed given our financial situation. so we ought to be honest about it, treat seniors as adults and say, how do we build the best health care system, take the fraud of $100 billion a year that's in medicare, get rid of it. how do we put you back in charge of your health care and make you somewhat responsible for how much you buy? you can do all those things and get better health care, one out of every $3 we spend on health care doesn't help anyone get well and doesn't prevent them from getting sick. >> it's stunning. look at the data, look at the

mayo clinic, look at dr. brenner who's done a lot of work in new jersey, there are a lot of people willing to invest in health over sickness treatment as a model that are creating massively more impressive health yield at much lower costs, and i think those models surround us at this point. it's really the frustration of -- >> you know, dylan, there's a very important statistic out there on seniors. seniors who have a supplemental health care policy in medicare today spend a significant additional amount of their money to buy that policy. but what we know is that with exactly the same health outcomes that consume 25% more medicare dollars. >> i know. >> what's wrong with that picture? >> well all know. >> what's wrong with that picture, we're not connecting payment with purchase. and market forces work. it's not perfect, but it's perfect -- better than any bureaucracy that we could ever devise. and what we need to do is restimulate that aspect of health care, both in the private sector and our publicly run programs. >> i get it, and yet -- i'm

going to wrap this up. and yet, when that came up as a proposal from senator ron wyden as a national exchange which would have directly interlinked, which was a bipartisan problem, it was money in our auction system, from the political process, health care money, that influenced that debate to at least make it appear, and you would know better than we would, because we're not in the room, but it certainly made it appear that the reason those reforms didn't happen was because of the money that was coming in from the health industry in that debate. >> well, let me pose one thing to you. >> quick, yeah? >> is the problem the money or is the problem the people who are in washington that are influenced by the money? and so what i would tell you is we need to change a lot of the people that are in washington. i don't think the money's the problem. i think the character and integrity of the people who are there and their vision for america in the long-term versus their vision for their own political career. >> and i guess that's where you and i will respectfully

disagree, just because i believe with the 94% outcome numbers, there's no amount of integrity that can help you keep your job against a 94% fund-raising victory meter. >> well, i would ask you to look at my races in oklahoma. i ran in a district that was 84% democrat, never ran for an office before in my life. i got out-spent by a tremendous amount of money. my first race for the senate, i got outspent two to one. message matters. >> and i respect that. and i appreciate your engaging, as you always do, in the formidable debate that you do with us on this show, senator. thank you. >> good to be with you. >> you as well. tom coburn, ladies and gentlemen. as we take a break here, we await a visit from delaware attorney general beau biden, back with us after the break. and he is not waiting for washington to act on the housing crisis. he is taking the big banks to court. is then the mega panel, what had the president's chief of staff droming the f-bomb in an

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well, washington's not working, and neither are 30 million americans. millions more americans have either lost their homes or risk of foreclosure, and many are simply trapped in homes that prevent them from being able to start anew or expand in a new entrepreneurial way because they are stuck in a trapped housing market. fraudulent actions abound, none of them or a few of them

investigated. mortgage companies at the center of many of them. and as we know, a group of state attorneys general are fighting back on a group of constituents in their state, even where washington at this point has failed to do so. delaware attorney general beau biden, for instance, this week filing a lawsuit -- and this is instant -- against what is called the private national mortgage registry, which probably doesn't excite you that much. it also is called mers, but this is the business that is owned and funded by the large banks that processes, as you can see, 60% of the mortgages in the united states. that is the recordkeeping payment collection mechanism. and the lawsuit alleges that this recordkeeping and payment collection mechanism deceived borrows by cutting corners and breaking their own rules related not only to the foreclosure process, but to the customer service process in general. and back with us again is

delaware attorney general, beau biden. and if you wouldn't mind, sir, give us a sense of what precisely it is the lawsuit you filed is seeking to pursue. >> well, the lawsuit filed in our court of equity, a nationally known court that you know well, charges that mers violated the trade act. and just that it's an inaccurate, unreliable system. 1995 came along, and in order to feed the mortgage-backed security industry as you know, the fannie and freddie and the largest banks got together with salespeople on wall street and said, it's much too much coup cumbersome to file and rerecord mortgages in recorders of deeds offices across the country. it's what we've done for centuries. so they decided to prooitize it, on their own. and in doing so, they did two things. they avoided millions upon

millions of fees, and are able to more nimbly secure ties to mortgage backed securities. but they forgot to keep track of mortgages. and in delaware, in 72% of the cases we've investigated, and this is just the beginning, they've literally foreclosed on behalf of the wrong entity. so they exercise the right to foreclosure on an entity, and in one case in delaware that we have, they foreclosed on behalf of an entity that no longer existed. so that's how screwed up this has become. they don't follow their own rules, and that's why we think they violated the delaware deceptive trade practices act. >> the best defense i've heard of the mers system goes like this -- let's presume everything that the attorney general charges is true, as you just laid it out. at the end of the day, if the mers system can accurately determine that you're not paying your mortgage, while we at mers may have no idea who owns that

mortgage, what we do know is that you, american homeowner, have not been paying your mortgage, and as a result regardless of who owns it, we know that we need to take it from you. and i'd be interesteded in your thoughts on that counterargument. >> i understand that counterargument, but the bottom line is this. as much of a legal obligation that a borrow has to pay their mortgage and if they don't do so in a timely fashion, they should lose their home. so too does the lender and mers on behalf of the lender have the obligation to prove in court and that they have legal title of the property they seek to foreclose on. this is about accountability in the rule of law. each side has to fall the rules. ic what you see, whether it be in wall street or the tea party or americans and middle class americans across this country, a lack of accountability on all sides. what we're trying to do in delaware, and this is a very delaware-specific thing, although i predict to you that other states will follow suit, is try to hold those responsible

accountable. and this man-made disaster, as you have covered better than anyone else, dylan, no man has been held responsible. this entity, mers, guess how many people it has to actually run this system? 50. 50 people in s rreston, virgini to keep track of 30 million mortgages that are in their names. 37% of mortgages in delaware are held in the name of mers, 60% in the country. how do you have a system where you have 50 people in reston, virginia, keeping track of this? it's mind boggling. and we believe deceptive. >> what happens next? >> what happens next is we get a judge assigned and we begin, in 60 days or so, we'll hear the answer to the complaint that we filed from mers, and we then will move toward a hearing before a vice chancellor or chancellor of the delaware chancellory court. mers, we've issued subpoenas, as

you know, early on, in early phases of this. they've been cooperative. we'll see how that goes going forward once a complaint is filed. eric snyderman in new york has issued subpoenas out of the new york attorney general's office. from what i read in the press, martha coakley is investigating mers. i think you'll see other attorneys general do the same. >> it is inspiring and encouraging to witness your actions and to learn through them and your colleagues on the state level. i think that i speak for many in this country who simply believe in the principles of fairness, forget the principles of politics, that we are encouraged to see you and others with your stature and competency engage in this problem. so thank you for not only engaging, but sharing it with us. >> well, thanks, dylan. i'm a prosecutor and a consumer protector, so that's my job. >> well, we are fortunate to have folks like you out there doing it and we look forward to learning what's at the bottom of the rabbit hole and hopefully resolving it with some courage

and compassion at the same time. thank you. >> thanks, dylan. now to our mega panel. bi-coastal, heck, it's even international today, from los angeles, the one, the only, hollywood's matt miller from right here in new york city, krystal ball, and from across the bond, eating bangers and mash, drinking pints before the show, i have no doubt, ari melber in london. ari, before we get into the politics, your response to what you just heard from the attorney general of delaware taking a direct approach to the mortgage processing system, which certainly is one way to the bottom of a very complicated rabbit hole. >> yeah, well, i haven't read the filings in that case, but i do think it is interesting to see more actions by state attorneys general in this case. obviously, for many people, the financial crisis of 2008 is still with us today and the foreclosures, obviously, continue around the country. so i think these issues are

important to many people. and we're seeing that, and we saw also in the filing this week against mr. gupta, also a new filing that relates to many issues that are old in one sense, but in another sense, have not necessarily been fully vetted in the courts. . >> if you don't resolve it, it doesn't go away, unfortunately. as we turn our attention to the political theater, the white house chief of staff bill daley dropping the f-bomb in an interview with politico. i have to say, i've done the same thing myself, so let's not get too crazy. >> don't want to cast stones. >> daly was referring to what he calls the brutal past three years that the president has gone through in the white house. daley went on to say, "considering the debacle that he came in, the tough choices that he's made, and he's had as few if any breaks. he says it himself all the time, he doesn't know why he's as high as 44%." >> a lot of americans are saying, i'm not happy with where

we are economically, i'm not satisfied. on the other hand, he was dealt a really tough hand, and when i'm looking at my choice other on the republican side of the aisle, i'm none too impressed. and the president is a very likable guy. so a lot of people personally like him even though they're not happy on where we are economically. >> matt, your thoughts on the white house kind of posturing as to they're surprised that it's not worse. >> well, i guess that's the argument they're going to make. i guess what also interested me in that daley interview is that they're talking about the things the president can do on his own, showing he can use executive leadership without waiting for congress to act. that's sort of their big mean that they're pushing. and it's very much like clinton in 1996, where he had the kind of micro-targeted policies. obama's rolled out the student loan thing this week, he's rolled out, you know, he's rolling out a series of things that will help some people, but they're so tiny, dylan, as you know, compared to the scale of the problems, that it becomes a

kind of charade again. >> yeah. it's interesting, ari, i think there's a lot of cognitive dissonance to krystal's point, where there's an appeal to the rhetoric, to the aspirations of our current president. at the same time, there's a disconnect and there has been in the policies around bank reform, around health reform, around the war, these types of issues. and 2012 will be the year we find out what cognitive dissonance looks like in an election booth. >> well, i'm only surprised that they're rolling this out right now. i think this is fundamentally a loyalty argument. it's basically saying, yeah, things are tough, and do you stand by me. you know, it kind of reminds me of like the 50-cent song, 21 questions, where he says, if i flip burgers at burger king, would you still love me? if i didn't smell so good, would you still hug me? and the political analysis there is, you know, another cents asking his girlfriend, what if i was is on the great, would you

still stand by me? and i think what we're going to see, particularly into the base message is not, i'm perfect, is not, you're not mad, right. we've heard a lot of elites starting to say people are mad for various reasons, but rather from obama and his aides. hey, you've got to stand by me, you've got to be loyal to me. it is hard out here, it is hard in this economic environment, which has political ramifications. and the counterargument, real briefly is some people would say, well, you haven't taken some of the tough political positions we were hoping you would when you talked about change we could believe in. >> you took the words right out of my mouth. rapper ari melber, fresh from south kensington. the panel stays. you've heard the saying, those who cannot learn from history are doomed to repeat it. why that matters in 2012, next. [ male announcer ] this is the network.

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all right. we're back with the politics of the financial crisis. as we know, less than two months before the '08 presidential election, the bottom fell out on

wall street as the credit casino was exposed for the fundamental fraud that it is. it was ultimately resolved with accounting changes that made it go away and some money printing, but at the same time, we have not restructured our banking system and find ourselves barreling right towards a similar fate in 2012, this time centering out of what happened here being something that catalyzed itself out of western europe. you remember the euro debt deal that was recently announced is not a crisis averted, it is a crisis delayed. for more now, as we bring in our friday specialist, friend of the show and friend of mine in general, a pleasure to see you, bill. >> nice to be here. >> her name is krystal ball. >> i would like to have one of those. >> so i would love to ask krystal what 2012 will bring. i suspect in this particular instance that you also have no idea, but that you can help us figure out what we should be watching for.

>> right. >> i suspect that the do-over that the world got was a function of the fact that we have a printing press and we used it. that's the bottom line. the federal reserve printed all the debt and that and the programs made all the problems go away for a while. i think about it like a do-over, right? europe's stuck right now, because the ecb doesn't want to print money. but they will, and they kind of do it in the back door. so i think what has to happen is, bernanke is probably going to ease again or do more qe when they meet. and i think some time soon using the printing press to make the problem go away or quote/unquote solve it, is not going to work. >> what would the evidence of not working -- how would krystal and i know that they tried it and it didn't work. >> they would start focusing on the inflation that exists, and the part of your paycheck that isn't a car payment or a house payment. people talk about deflation, but that part of your paycheck is

fixed and those assets are going down in price. but the rest of your paycheck, the part that you use, the things that you want to buy are going up in price. there's a big squeeze. it's more like the stagflation we saw in the early '70s, middle '70s. but right now people aren't really focused on it. and i think at some point, next year, we'll start the to worry about the inflation and they'll start talking about, gee, maybe the fed can't do this anymore, and we can't like it with the other unrest. we might start to really look at these problems and solve them, you know? >> this is a big debate that's going on. because more liberal-leaning economists say the fed should be focusing more on unemployment, more conservative leanings say they really need to stay focused on inflation. i mean, number one are those two goals conflicting, and number two, have we seen any signs of that inflation starting to creep up that we should be concerned about? >> well, the two goals are kind of almost mutually exclusive. but the people that think that the fed can do anything are the people that believe that if you print enough money, nothing bad will happen. and it's just not true.

but there's a psychological component to printing money, and there's money of the mind, right? so i would ask you, i mean, if you go out and shop and look and see that there's lots and lots of things that are appreciating in price, but the housing collapse that keeps people focused on it -- >> and wage gains. >> well, of which, unless you're in the right industry, there aren't any. >> or in the right income bracket. >> there's a huge squeeze. i submit to you we have a problem where the assets you already own are the deflating, but the things that you need are inflating. it's which ones are you going to focus on at the moment? >> matt, go ahead. >> bill, you look at nextier's election from the financial risk point of view, and i don't think we're going to get any debate on the three things that freak me out in terms of our vulnerability, our continued vulnerability. the capital levels in the banks, both here and abroad, the casino-like use of these naked credit default swaps that magnify every crisis, and then all this high-frequency trading

that now accounts for 70% of the daily trading, caused the flash crash, and leaves us still vulnerable in the eyes of lots of folks. do you worry about these things the way i do, and what would it take to get a discussion of that in a presidential campaign? >> i think that high-frequency trading is kind of a pain and it's noisy. it can get out of control, but i think our problems are sort of bigger than that. and i think the bank capital levels here are better than they are there, and sarbanes -- sorry, dodd/frank is a bad bill. we'd be better off with glass steegel again, but we're moving in the right direction. so i think they're making progress on those things, but the things i worry about are the size of the unfunded liabilities we have in addition to the national debt. i think we kind of have to prioritize. while i agree with you that all of those things should be changed, until we start recognizing the fact we have these monstrous liabilities we have to deal, we're not going to be able to really get at the

elephant in the room. >> ari, go ahead. >> well, i guess what i'm wondering is, you're talking about inflation, you're talking about the cost of living, but everything seems to always be about taxes. is there anything concrete that you think can or should be done to help the american consumer pay more attention to more of these factors and not only be talking, as we are in politics so much, about exclusively taxes? >> well, you know, i think the consumer sort of revolts about things when they finally get around to it. i think some of the unrest that's being tapped to in the occupy wall street and other cities where this is going on is that people can sense that something's really wrong and maybe they're not quite sure what it is. and i think that moment in time has finally come and it's sort of up to the people like dylan to let them know what's really going on, so they can be informed, and then in a year when we can all vote, we can try to get some people in there that are smart enough and not too

political to actually start diving into some of these big problems. >> this is going to be a fun year. >> i think so. particularly for you. >> yeah. well, with the 94% number, i can cover the presidential election number from barbados and just send my spreadsheet. just wait -- i don't need to watch any debates, just send 94%, here's who's going to win. a pleasure to see you, bill. krystal, you as well. ari, we look forward to your safe return. matt, hope to see you in new york some time. did you sleep through one of the greatest game in world series history? i made it to the ninth inning, barely. why tonight's finale could be something we have not seen, any of us, in more than 30 years. ♪

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today and on election day. ♪ okay. so i'm not using the business of telling people what they should or should not be watching, except, of course, when i recommend my own tv show. but if you were not tuned in to game six of the world series between the rangers and st. louis last night, you missed what might have been the best

baseball games in our country's post-season history. bottom of the ninth, cardinal's third baseman david freese hits a triple. freese's triple forcing extra innings. and the rangers took a two-run lead in the top of the tenth from josh hamilton. and after a pair of hits and a sacrifice put the cards within one, lance berkman with two strikes deliverying another game-saving hit for the cardinals. when the rangers failed to score in the top of the 11th, the scene was set for david freese again. to be the hero. and then magic. >> freese hits it in the air to center. we will see you tomorrow night! >> and after trailing the whole

game, the cardinals come back, forcing through freese's home run to center field, the first game seven in almost a decade of the world series play. if the rangers are able to somehow pull out a win after this gut-punch, it will be the first time the away team, texas, would win a game seven since the pirates did it in 1979. so now the world series that started off with the forgettable ratings has taken a historic turn with one part reggie jackson, one part carlton fisk, and just a touch of the '86 mets. tonight's game seven is, indeed, must-see tv. and i'm sure any ratings shortfall will be made up for in tonight's do-or-die game seven affair in st. louis. i hope you can check it out. coming up, what makes good people do evil things? famed horror movie director eli roth joins us. he set out to find the answer to that question and he's our guest, next. what's the word around the sink? that it removes 3 times more soap scum per swipe, and it came from outer space.

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in 1961, stanley mill performed a theater if civilians would follow an authority figure and perform anonymous acts on innocent victims. the answer, quite clearly, that they would. now, 50 years later, the discovery channel's next edition of their series "curiosity" is recreating that various experiment and asking, how evil are you? joining us now, an expert who is a master at the production of evil, famed hollywood horror director, host of "how evil are you," eli roth. you must be excited to roll this out. >> it's unbelievable. i have to say. filming the "hostel" movies, you know it's fake. this is by far one of the most disturbing things i've ever been a part of. i was sitting on the other side of the two-way mirror and watching these people shock complete strangers, i always wanted to see if that experiment worked again today, and the results were disturbing. >> you did not, however,

directly recreate the mill experiments. how did you modify? >> the original experiments, he went up to 450 volts and let the people think they killed other people. we use the exact same box and it's still recordings, but we immediately after told them it's an actor and we have to stop at 165, otherwise you're inflicting too much psychological damage on someone. >> so you didn't take them to murder. >> we didn't. but what millgram found that 150 was the marker that if you went above 150, 80% of the people that did went all the way. so we can pretty much, assuming the data is the same, and it was pretty identical to what millgram had, going above 150, most the people did it. it was really scary. >> so what explanation have you arrived as to this human tendency, which is fascinating for everybody, and also, interested in any scientific conclusions of the data. >> well, we certainly can't use it for science. it's really more of a parlor trick than anything, it's just an experiment. mill grim did thousands of

people, we did 13. so there's too many holes. but what was interesting, i talked to all these people, i wanted to know, what about violent horror movies or violent video games, that influence. it had nothing to do with it. what i learned is that people listen to authority. now, i was thinking, well, why do we do that? the truth is that we need authority in our lives. we want to know there's a policeman on the street that's going to tell us what to do. if there's a fire, we listen to the fireman. it's part of, as humans, in our society, how we keep sane. but in certain situations, you know, people really -- we asked them, why would you keep shocking when this other personing is screaming, stop! i'm in pain! and they were like, well, i didn't want to disappoint the scientist. one woman said, you know, my father was very strict with me and taught me never to question authority. so it really had much more to do with people's relationship to authority figures. and they were all very good people, nice people. >> and in a time when the authority of our government and the authority of so many of american's institutions is obviously being breached, whether it's money in politics, whether it's the lack of

transparency and integrity in the pricing of our energy and these sorts of things, how do you interpret what your analysis to a system where the institutions we rely on are in desperate need of renovation. >> i think we're seeing the dark underbelly of a capitalist society. in a corporation, you are set out to make money and we're taught you want to crush your competition. but i think what you're seeing is people kind of want a version of socialism. you can't say socialism, it's still a dirty word, but people want health care, people want the government taking care of things. and i think what you're seeing, unfortunately, people have been pretty lax in being involved in local elections and a lot of people have gotten elected that are bought out by corporations and everybody's kind of sold out to the dollar. and i think what you're feeling is this general frustration by the people that the middle -- you really do need a strong middle class for any country to survive. and it just -- the disparity between rich and poor has gotten so great by people taking advantage of the system that it's time to correct itself.

>> any thoughts on whether -- i've got a pitch for a horror movie i wanted to send to you. it's the story of all the terrible things that happened to a political system, do you think you could make anything out of that? >> i think it would be too hard for people to watch and people's eyes would start bleeding. people ask me where my ideas come from, and i say, look no further than human behavior. but the whole show on evil, it is a point of view. half our country, the republicans, are evil, to half of our country, the democrats are evil. to the occupy people, the banks are evil, to the banks, the occupy people are evil. everybody has their own perspective. >> yet there's only one group of us. >> oh, the good people. >> no, i mean all of us. >> i didn't mean you and me. i know. but you can really feel it right now, that the people, there's an outpouring of frustration, and people and want to do something. and there is a unity. >> yeah. glad to know that my get money out script might be too scary for eli roth.

>> sunday night at 9:00, it's really, really creepy. you're going to love it. >> i was just about to do that. sunday night at 9:00, very creepy, but not as scary as the money in our political system, so just perfect for a sunday night. >> halloween. >> again, a pleasure. >> happy halloween, eli. >> happy halloween. coming up on "hardball," chris asking, is newt the new gop front-runner? but first, he carved a pumpkin and he's here to carve out the week in cheating, jeff chrysler. ! we call that hertz gold plus rewards. you earn free days, free weeks and more fast. that's a plus. upgrade your ride. that's a plus. rewards with no blackout dates so you can redeem anytime. and it's easy to redeem your points online. already a gold member ? just select gold plus rewards in your profile and start rewarding yourself now. just go to hertzgoldplusrewards.com to join. hertz gold plus rewards. journey on. you want to hear you've done a good job.

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all right. this week's headlines and the first one has to do with the 1%. jeff chrysler is here with a

little visit. hello, mr. chrysler. >> hello, dylan. how are you? >> the 1% seem to be kind of taking it on the chin recently. >> well, as you heard from the cbo this week, they discovered that the 1% has only gained about 275% of their income in the last 30 years, which isn't that much. >> how did that happen? >> well, just by gathering all the money and making the money. we've got a lot of problems in this country. we've got war, recession, capital gains taxes. this is not a problem. if anything, this is a success. this shows that since the deregulation began under ronald reagan, praise be he, we have been ail to concentrate the wealth at the top. the middle class, they gained like 40% of these 30 years, which is enough to buy cake that we'll let them eat. and eventually, all of our wealth will trickle down to them. >> you'll provoke a violent uprising with talk like that. next, it looks like your students are getting younger and younger, your ways of cheating. >> one thing we want to do is build more cheaters. if we have enough cheaters, they

won't be able to catch us all. we have cheating scandals in atlanta, new york city, and recently an s.a.t. thing. and it just goes to show that teacher is an anagram for cheater. so what better place to instill the morals of immorality and selfishness than in school. the reason this happened, all the money in education has forced people into competition, and competition breeds something wonderful and makes people cut corners. and i'm just looking forward to the moment when schools that compete so much, that they have to advertise. hey, parents, little timmy having trouble in math, bring him down to ps-42 and we'll put him in a class full of morons where 2 plus 2 can equal thumb and everyone gets a gold star. >> is that a new school you're thinking about opening right there? the slogan? >> i will. it will be especially for the upper, upper, upper, upper 1%, middle class. >> really? i didn't realize there was such a -- i didn't realize that that -- >> it's all about defining your terms. as long as we get more money, it will help. >> finally, handcuffs for wall street this week.

not related to any of the bank fraud or the mortgage fraud, just your average run of the mill insider straining. >> which is great. rajat gupta, who was caught up in the trial, and i get bonus points for getting the names right. >> do you think the name raj had anything to do with that scheme? >> it might have been. the prosecutor was also of the same heritage. i can't remember his name. but it just goes to show, again, when it comes to cheating, put your trust in the people who know how to do it, the white guys. we've been doing it forever. if you just give us more of the money, we know how to make money. who are you going to trust? the guy that gets foreclosed or the guy that forecloses. more is an anagram for rome, and don't we want to be like the great republic of rome? if you give the 1% more money, we'll be like rome. and that's great. >> you've carved a pumpkin before we go for the halloween weekend. that is the