>>hat do you think a tree ca be? can it be stronger than steel? can a tree be bdegradable pltic? can it be fuel for our cars? or clothing? or medicine that fightsancer? with our ee cell technology, we think it can. weyerhuser, growing ias. >> too my were motived only by the petite for qck kills and bloatebonuses. >> this week on "inside washington president obama says the improving economys no excuse for wl streeto return to business assual.

>> no republican h offered h or her suppo at this moment. repuic > snub -- >> republicans snub the baucus plan -- democrats, too. >> thosewho say we are dismantling missile dense in europe are misinrmed or misrepresenting reality. >> former esident jimmy carter hasa eory about some of president obama's crits. >> police tt he should not be present becae he happens-- they bieve that he should not be present becau he happens to be african-amerin. "tibrant's college football previ captioned by the national captioning initute --www.icap.org-- >> welcome to "iide washingt" am margaret carlson. gord peterson is on vacation. federal reservchief ben

bernanke says that the recession is probably over esident obamatraveled to wall street to talk about preveing a peat of the economic meltdown. >> thenly way to avoid a crisis of this magnitude is to be ensure thatarge firms caot take risks that threaten our entir financial system, and to make sure they have the resources to weather t wor econom storms. >>he president is ying that some the financial dustry aregnoring the ssons of the financial crisi how did wall street respond to this sermonette, charles? >> with a bit of shrug the proble with wall stet is that everybody undstands i the end at the government will bail them out. it willot all the largest institutions to fail. there is no incentive to rein in risk if you kw at the e of theay of the sample right in on the rescue. -- unclamwill wide ino the

rescue >> they touched a hot stove and itas meant nothing. >>he only armrace is wall street's site, new ways to take ris. the regulatory process is not done much of anything. they have done a few cosmetic thingsbut basically, congress has done zip. maybe they will do sometng, but i wod not hold your breath. >> and regulations ever ate ahead of these whiz kids on wall street? we have guysut of i league colleges trying to earn a fraction of what the people walltreet's trying to keep up -- >> if ey getahead, they will only get ahead briefly. but the point is, they keep trying herwise, what will we be, in the tk to wall street our entire lives? the ssons have bn seen but

no yet learned. you'll e if primus has the fortitude to adopt rl change -- if congress has the ftitude o adopt real change. >> the attitud owolfe street ems to be we're not too bigo fail -- of wall streeteems to be not just we are we're too big fail, all we are too big to regulate. >>ne speech will not change everything ipossib . it isossible that the administraon will chan capital requirement on some of these institutns. the talk of a lling like a consumer protection ency to prott consumers on wal -- something like a good twoor -- like the conmer protection agcy to protect consumers on wall street will not happen the question is whetr obama has the juice get it done against thkind of opposition.

>> he will run into the usual parochial politics therere regulator agenes, an alpbet soup of acronyms that you cannotremember, and each one is corolledy a congressional committ or subcommiee. they will not give up thr power by foldinthem into one giant regulatory agey. we saw wt the merits are that. i'm not sure we should have won regulato agency. the congressional politi are to do noing. >> the lobbyists are thuering to the congressmen --nd have enou money to fill up gucci call again. >> democrats are almosas bad as republicans in not bei very anxious to unmake friends wit people w give lots a lots of money to their campaigns one way or another. >> what na is a saying

politely is that e new yk delegations, almt entirely democratic, are ned by a wall street greed did want to anslate. >> thank you. >> just want >> they protectedat and try to prevent regulation before the crash d they remain the friends of wl street now. >> thatis the real problem. so muchime has gone since the ar-collapse in early in the year that members will fade d the will not bthe public clamor f regulatory reform. >> ilooks like they are givin up on cappinpay in any way, but ere should be a way to regulate bonus that are based on ting totally tsize risks. you get aonus fore the wages of tt, do, and youave gone belly up. t banks have pocked the bonus. >> i don't think they n

regulate pay, oronuses. in eory you c, but thereare so manexceptions and loopholes. they shoulstay away from that. but they need to keep some kind of odd people who dooo much levege. -- eye on ople who do too mu leverage. there's got to be a y to stop these0-one ratio -- >> one of the things bney ank has talked about it -- requiring lenng institutions to hold on to their lns. when i wa in banking, you did it alone, but you held on it alone -- on to the loan to pay it back. if you require them to hold onto some of thes loansit would be countable. >> if you cannot st them up into little pieces and sd them dostream, that wouldo a long way. arles, are you in for of that kd of interference in the market? >> believe in the free market,

but wall street is no the free market. >>it isn expensive market. >> fannie mae and freddie mac always had t implicit guantee of the govement. now al of wall street as the implicit guarantee. if the govnment is behind you, they ought to regulate. ultimately, you and i are going to be held hostage paying the debt if it clapses, yes, we oht to regulate. >> ere has beeno pishment to tch them anything. >> it is not punishing worry about. what worry about is the risk in the future. we ought to doome other things that are sd and not -- >> we grudge-holding irish caolics like punishment. the president scrapslans for a missile defense systemn eastereurope. >> ourew defense aritecture in europe will provide stronger,

smarter, as worcester defenses of america'forces and allies. -- and swifter defens of america's forc and allies. >> presidentobama says there are other ways to deal witthe threat iranian missiles. but the timing of the announcement, days before he meets the russian president makes some wder whether mr. obama isbargaining with the ruians. how does that look to you, evan >> the president is a conciliator and he likes to split the difference and i am sure some of it is to appease the russians, that do not an it is a d idea. theechnologies, but it is better to go with th systems -- secretary of defense gates likes to go with what works n and not rry about big fan systemslater. theris some evidence that the iranians are building the small and termediate range missiles that are threening europe. in practal terms, it mak sense. >>t is polically sheer

nius that he has robert gates as his secretary of defense mang this case. he is a big russian expert was a hardler about russia a decade or two ago, argued for the opposite position a said the inlligence hashanged now, and wahead of the cia. this is extremely hpful to making the case. >>e gives obama otection, bu charles, i wonder, you probably still like this system that does not work to prote a threat tt does not exist. [laughter] >> what i like on is show is thneutrality of theost. it is sort likebeing in th old soviet union, being a dissident, b at least i am not in thae gug here. look, this was a major capitulation to the russians. this was alabout russia. this idea about change of intelligence is tal nonsense.

he indians already have intercontinental blistic msiles. by definition -- the iranians already he intercontinental ballistic missil. by definion it already has icbm's. the idea that the intelligence was faulty but we will now rely on the intellence today, the idea tha we have tobandon a prram that was aimed at a long-range threat in order to meet the medium-range threat -- whyouldn't you do both? they both exist. the russians are the ones who put remarkable and brutal pressure on east eopeans on th. this is a conssion tohem, and e reaction by theolls and the tax shows how -- shocked the poles and the czechs shows hohocked they arethat we have abrogated a security agreement purelys a result of pressu from e russian spirit is a big chang at the beginning of the detachment of east europe from the american curity -- >> co>> lby, our dissidentakes

a good point. y can w't we do long-range and short-range the same ti? there are two points. on the intellince in this baltic, but is that what secretary tes says. ifou ask me to make a choice -- [lauter] >> did not say it was flty intellence. i sa that if you changed your position on the basis of a clamp at the previous intelligence is faulty, what you have at 100% confidence in the new intelligence? you don't. u never do. >> i wou love to car the point further. you have a point when you lk about thrussians' role in all of ts. they objected as strenuoly to the deployment of missiles and

radar in poland a the czech reblic. no qstion about it, this -- the big question is wheth the u.s. will go forwar with the missile defense shield in europe. this is what robert gates h promised. it will not do it thay, they willo it that way. but we are ready to do it that way -- >> let me ju say one thing -- u cannotight the world. our biggesthreat at the moment seems to be -- we are vy worried out in. we need the ssians to help us impose sanctions if that is where we aregoing. we have gotten thatut of this, w will haveotten somethg. >> was this too early, givg too much t the russians too early? >> i d't know. i cannot judge that. but his instincts some defense is t split the fference, find the middle option could you look at almost

anhing, that is where heoes. >>let me ask y from the gulag,ow wilthis play out relationwith russia? >> evan ss this is splitting the difference. it is t. it is tolcapitulation. if you wanted to have defense with intermediates, u cou said egy'ships, have them there in the wee in half. ere is no need to abdon lo-range system. you can have one andhe other and keep the in poland and the czech republic. this is a concessi to the russians on an order o magnitude largelynseen in the last 10 or 15 years. the ia, i suppose, for obama to get a strategic arms -- and completely uless and worthless. who cares how many nuk the russians have? what we want in returns ooperation on iran.

there is not a shred of evidence that t russians are going to lp us on in. the russians announced a week ag that they will not sport any sanctions on iran. what did we get in returfor about four to trl? nothing. -- for betrayal? nothing. >> allhe failed test. >> we have had one successful shootdow overhe last eight years. question about whether this could be -- >> right. these are for an isoled missile. >> we had aest in the pacific with a no-warning sotdown of a ssile that imitated a korean missile. the ideahat we wouldhoot down aussian aenal is nonsense.

nobodys expecting that. when you're talking about iran are correa, whatou get is extremely effeive. >> but we stil have -- >> but i am sayg, the primitive systems that the iranians or koreans have is wha we are attpting -- >> defendg against korea -- >> we have the capacity, but not in thebsence -- is the anyossibility that we willet anyranian coessions out of this? i think you can looto what the're proposing as the alternatives -- better react to iranian missile stkes. we cannot lose sight of the russians a in germany. they still have an interest in the power in easter europe.

the questiois what do we do come up with wt is happening in poland and thezech rublic, and what we are trying do in georgia? this nothing to blinkt. -- ts is noing to blink at. the weapons in czechoslokia are not about to stop russian nukes. exactly right, and ty cannot havbeen threatened by this at all. the estion that colby raises is whatheytart to threaten a bullet or the czech reblic or, for at matter, -- threated poland or the czech republic, or, for that mter, germany, by cutting off gas supplies? >> the intentions not to take over the pole or occupied warsaw. it is to finlandize easrn europe, to deta it from its sition after the cold war and show the east europeans that they have no independence of action if the russians say

missile defense does notappen. >> the senatfinance committee finally delivers a health care bill. >> it is even-handed. everyone is looking at it. no one is a ric crumbling ound the edges. -- grumbling ound the edges. >> the bill as biparsan, all righ neitheride likes it. but republican olympia snowe is in the gang of before and e may behe most imrtant person the senate now. how to use this playi out? -- how do you see this playing out? >> if i really knew, i would tell you. they labored forhe better part of a year and produced a mouse. it has a relively good price tag buit does not matterf you have aelatively cheaper ice tag on a product that is no good as it ands now, it would hit middle-class americans so hard

that i suspect there would be total rebellion. they have to pass that if they are going to ss something. if they push it at tt and, can they hold on to the more conservative democrats and olympia snowe? can they do thatithout the puic option? it all gets hammere out in e conferen committee if they can get something through the sete. it is rely complicated. >> charles, the insurance companies like this. >> it is a mouse, then it ithe larges mouse ever seen. unbelievably complicated there wil be people whnow cannot afford insance willet subsidizedr forced in paying for insurance. s, it works for the insurance companies. am not surit is gng to pass, because the one thi about the baucus bilis that it host in the sense thathe cbo has said it is revenue- neutral, which means that it shows how expsive it is. is going to cost middle-clas

people, it is goingto cost of e young, it is going ost huge amountsf subsidies, and all the taxes that areoing to be iosed on the iurance companies will be passed on in hier premiums. at is what youhave all the sqwking on the left an the right. finay, the costs areut there, and they are huge. there is one thing it does not do, create cpetition, evan. there are these regional cooperatives and it is a public option. you have a huge amount of concentrati in the industry. >> the has been some talk om senatoron wyden out creating competition. i wish that wod find its way into the fin bill. it does not sounlike it wi. onthing that has cracterized th whole tng is a complete lack of honest aut cost in thsense that people will pay more about something. thepolitics has been amazing, om the presidentn down, about just not ever addresng the elepha in the roomthat you cann have meaniful health rorm without someby giving up something or payi

more. ey arnow going, oh, my god, were doubling at the casi and it will st us something. >> you ll be paying more without anything happening. >> first of all, it is not a finance committee ll. the other thing ian say without fear of contradiction is that the baus prosal will nopass. it willnot become law. now, it is a hicle. a vehic for thether members the committee to start fering their all amendments to see what will work on ts bill. that is at will get thereal hone discussions -- >> relative ho i noticed -- >> then you look at the larr debate, cause they will have to pull thother committees -- >> senator patrick leahy droed in a bil that would get rid of the antitrusexemptions for the insurance industry. if that ever happens,ou might

actually s some competion. >> maybe. a former presidcies rism eling some criticism of the president. >> people guilty of that and of personal attack againsobama ha been influenced by a major degree by a belief that he should n be president because he happens toe african- american. it is a racist attide. >> t president does not believe that the criticism, is based on the colorf his skin. >> there has be a fair b of discussion about former president jimmy carter's assertion that racism motivates somef the animosity against president obama. the whi house wld like to be talking about somethingelse. u wrote a column about thi colby. what do you thk? >> it addressed the sentiment

from some people who sh presiden obama would be dead, do not want him bece a mart to have another holiday, but want him to die cancer ke president kennedyid. a pastor in arizona said that. another pastor also wished h dead. i cited exales of people who are time bombs, with animosity against afcan-americans. that said, i don't thk you qutify thiand say all the ople who oppose obama are motivated by race i don' think so. that also said, i rember a song back in the early 1940's that said, "iteems i've hea this song before, it has an old familiar sre." goin back to 1968, there was a guy nam george wallacewho reale that race was something you cannot talk about, so the had another code, talking with

centralized gornment, preying on the govnment and taking money. some of that you see now it is in some of these rallies that were held in august,ome of the people who shed up in washinon last weekend. but to go from bad say that this is a rist, antobama action, you cant make that case because he cannot pve that case. -- cause you cann prove that ce. but there something unrlying -- >> you do see these mobile reactions t obama. but he was elect in this country. >> during the campaign, thedid a brillit job of ignoring race a as an issue, with e significan exception of reverend wright. after that, it was not an issue at a. robert gbs-- you can see tt he andis crowd just do n want toear it or deal with it. think tt is a smart approach. it worked in thelection.

it is a fringe thing that is going oand ignoring it is probably the best opti. >>in the bush yearsbush was call a liar by harry reid, senator kennedy, not fringe chacters. howard dean, head of the decratic partyaidi hate republicans" in an article in he new replic." we had novels and plays about assassinating george bush, honored by elite mediand society,he idea of sassinating orge bush. in the bush years, dissent w the highest form of patriotism, andow that we hav a docrat inthe white house, it is the west form of racism. >> there are, i think, good arguments to be madehat there arsome people who would never have tated the president of the unitedtates that way givi a speech before congress, and others who feel they had good cause that had nothing to

do with race. t he is oy eight months into his presidency, and to have our level of fever pitch criness at this point is a ttle scary. >> that because thembitions of the highest sie f. heas had arogram and he is not a modest man. >> charles, you have the last rd. thatis it for this wk. ne in again next time for "inside washington." for a transcript of th broadcast, l on to insideshington.tv.