>> what do you think a tree can be? can it be stronger than steel? can treat dubai degradable plastic? can it be if you -- can a tree

the biodegradable plastic. can it be fuel for our cars, or clothing, or medicine that fights cancer? with our tree cell technology, we think it can. weyerhaeuser, growing ideas. >> a lot of people do not think it was an authentic certificate -- >> how can you say that? >> many people do not think it was authentic. >> this week on "inside washington," money talks and talks loudly as fundraising stores to new heights. >> you can't handle the truth, my friend. quiet down. >> heads, his cronies went. tales, the taxpayers lose. >> mitt romney clutches the nomination. wisconsin casts recall ballots on a sitting governor. >> i want to make sure everybody

votes. >> and north carolina jury and still operation on the john edwards' case -- ends deliberation on the john edwards' case. >> if i want to find a person accountable for my sins, i don't have to go further than the mirror. captioned by the national captioning institute --www.ncicap.org-- >> thank you for joining us. i'm mark shields, filling in for gordon peterson, who as the week off. there is one area or money is flowing into politics like never before, from outside groups influencing the election. >> $1 billion just from the outside groups -- the chamber of commerce, koch brothers, various super pacs. that is the world after the

citizens united supreme court decision. >> money has always been the mother's milk of politics, and thomas, but is 2002 like something we've not seen before? >> i think so. i used to think that money was overrated, in that end did not matter, even out. the super pacs give the unbelievable flood of money, and they love negative advertising. there has always been negative advertising, but now there will be a tidal wave of negative advertising. the other thing is that the finance community, wall street, they have always been big donors, but now they are giant and are getting to the point where they basically own congress. >> nina totenberg? >> in many ways , there is a for sale sign out side the u.s. government. there are so many loopholes that

allow so-called issue groups to spend money and then shovel it back to other groups, and nobody is accountable, you have no idea who has spent money. it comes in often at the last moment, millions and millions of dollars to defeat people. it is a kind of scary thing for democracy. >> colby, from 1976 to 2008, every campaign was essentially controlled by the candidate, who abided by limitations on what he could spend an raise. president obama in 2008 blew by that traditional and historical barrier and went into uncharted territory. he said he would raise $1 billion, republicans will raise $1 billion. what is the consequence? >> well, you are right that money is the lifeblood of politics, but it can also have a corrosive effect on politics. evan mentioned the negative ads being run. we've already seen some in the

washington area. the net effect will be to not only turn off people but to have an impact on voter turnout. the way the money is being used does not enhance the reputation of any of the candidates. >> do we lose a sense of accountability, charles, when the candidates no longer control the narrative of the campaign? >> i think all this lamenting is a little overblown. since you insist on starting the show by ignoring the bad unemployment numbers and talking about a 200-year-old story about money in politics, with a clever reference at the beginning to the koch brothers, what we have now is an evening of the playing field. obama said he would raise $1 billion, republicans will raise $1 billion. let's get it on. it will be now an even match. >> it would be one thing if both

sides raised $1 billion of their own contributions. it is the outside stuff, the icon double stuff, almost seismic activity, because the candidate does not have to take accountability for it. , butn even denounce it it is still out there, and it is really corrosive. >> we have as seen in negative ads, but man, we will see them on a scale we have never seen before. if convention is correct, that will have the effect of depressing turnout, particularly among moderates and middle of the road times. true believers will be excited, but the disappearing middle -- >> would you call the daisy ad against barry goldwater and negative ad? >> i sure what, and lbj took the rap for it. >> and he won in a landslide. >> willie horton worked --

>> so what is new here? >> what is new here is this -- we have anonymous donors. we don't know who to hold accountable for this kind of spending. it is one thing to run the negative ads and you know the individual or organization. it is another when they are anonymous. >> i would submit for discussion at one of the reasons mitt romney appeared with donald trump, a controversial and a discredited public figure in most eyes, was because of $2 million. that was the price you pay. it is the democrats associating with bill maher, same thing, on hbo. the fever to raise money. >> tell that to congressmen. they spend their lunch time is running to some little -- because running for congress -- not just by inflation increases, but geometric increases over

time. and the effect again is that wall street has had tremendous power -- and have always had power, but they have more power than ever. >> in the last election cycle, wall street went to obama. i did not hear a lot of wailing here over that. now that wall street doesn't like obama because he trashes business, all of a sudden it is a big issue. there is a lot of hypocrisy -- >> i don't think it is -- >> of course it is. >> there are a lot of people, me included, who criticized obama for going through the limits. but at least when they give the money you know what was. -- who it was. we don't know that now. forovernor romney's plan america is the same plan he sold

to the people of massachusetts in 2002 -- less government, less debt the was. all was the opposite. more debt, bigger government in boston. >> that was an excerpt of the obama campaign's latest assault on romney. romney hit back by attacking the white house's loan guarantees to the failed solyndra energy company. >> it is a feeling out process. they are trying to figure out what works. they are looking to see how it is being received and what the impact will be. i don't know what they will be talking about in august. >> they will be talking about what they are talking today, the unemployment numbers, creation of jobs, and if it continues to slow down, obama will be in more serious trouble.

he is already in trouble. >> just one point, i want to emphasize it for all of our business, particularly one of our panelists, the unemployment rate came out, at 69,000 jobs created, far below what was needed or even expected. unemployment rose to 8.2%, which i don't think is good news for the obama team. >> no, this is really devastating, because for the third year in a row, they have been talking about summer over recovery date. and had an uptick in the winter and part of the reason -- they had an uptick in the winter and part of reason is that the weather was good and its toll on jobs from the spring and summer and made it look good artificially. the slowdown in china -- >> slow down and around the world. >> calamity hanging over europe. the spanish banks are bankrupt.

rupp has no answers to any of that. we are headed into really rough territory. obama has to hope that all this terrible stuff is not going to happen until after election but some of that could. >> the boat is an negative argument, because both sides blaming each other because neither side wants to talk about the only way out of this, which is a messy, turkey, complicated a short term it stimulus and long-term austerity, some kind of blend of that. nobody wants to be honest, so instead it they just accuse each other -- >> what is the ryan plan? >> if you look at the unemployment numbers -- the job numbers, it tells you how the business community looks at the situation. it is right to say that there is a great uncertainty. the uncertainty is in the united states. if you are running a large business or small business, you

don't know the outcome. serious issues facing the country on the deficit, and even such a thing as raising the debt limit, whether we can come to some kind of conclusion that will make this work out reasonably well. andet me start charles' about the ryan plan. the wind plan does it do some irresponsible stuff on and on -- the ryan plan does do some response was on entitlements, but it is 80 pla -- it is helpless plan because there are no tax increases. you have to raise revenues or you cannot get out of this fix. >> you need people to spend money. people will not spend money on the state bank feel relatively confident and have jobs -- will

not spend money unless they feel relatively confident and have jobs. of course businesses don't want to invest. they don't have people buying the stuff at the moment. >> where has austerity worked? what is the laboratory -- where has it worked politically? >> it worked in germany, which 10 years ago began austerity, began renegotiating contracts with unions and had a cutback in wages and as a result has weathered the recession the best. immediate austerity in europe is hopeless. you guys talk about stimulus. the cbo came out with the numbers this week looking at the obama stimulus, $830 billion. do you know how much it estimates was spent per job created? the best estimate is half a million dollars, the worst is $4.1 million --

>> but, charles, teachers -- >> the average -- >> those people don't have jobs -- >> growth versus austerity is a false dichotomy. everybody looks at his nose it is a combination of some type of stimulus married with credible, believable, restraints -- >> let me answer mark's question -- >> empirical evidence on the stimulus we just passed. you know what you should do with that that money? you send a check to the unemployed for $1 million and invest the other in a lowering of taxes. this seriousack to problem with the debt crisis in the developing world. the prescription is austerity, austerity in the sense that you

have to get control of the budget, control spending, more investment in the private sector. why did it work? the industrialized countries at the leverage to say that if you don't, you don't get more loans for investment. that is what is missing in industrialized countries themselves. who has got deleverage on us? >> evan thomas, isn't it an example where your prescription of a short-term stimulus and long-term belt-tightening has worked? >> i think that historically has always been the answer. it is always a mixture of long- term fiscal oversight and goosing the economy when you need it. the question is how you do it. psychology is important. people have to believe that even though you are not going to deal with spending cuts right away, he will deal with it in the long run.

the markets have to believe, the bankers have to believe. you have a credible plan that deals with long-term deficit problems but at the same time stimulate enough to get out of the short-term problem that we are in it. you don't have to do it in an irresponsible way. there are ways to do it that are responsible, but the key is that it has to be married with the credible belief that you are going to deal with the long-term problem. >> part of the reason we have the employment numbers so bad is we have cut so many public jobs. it makes everybody -- you cannot get a cop, the fire departments are closing stations, libraries are closing. all those people are now out in the general marketplace. it makes for a very difficult calculation. >> the problem is so polarized. when you have a situation where one party holds firm to the belief that no tax increases is

gospel, and you have another party that says we are not going to touch these important social programs that we have, the entitlements, we are not going to have any cuts there, how do you begin to approach it? the leadership plays to the base instead of trying to find a compromise to bring the base along and you have an impasse. >> simpson-bowles, charles? >> so much error, so little time. nina, your point about public jobs is absurd. that is what europe has done for years and it i ands in implosion. evan, your point about stimulus -- just tried a stimulus. the longest stretch of unemployment in american history -- >> it saved us from the massive great depression.

>> at the rate of spending $2.3 million for every drop, that is the most inefficient ways of public money, and a position of $5 trillion of debt. if you had politicians setting out short-term stimulus but then it saying i will get serious about cutting spending -- obama comes in office in 2010 and talks about that, and what does he do? stimulus, no credit whatsoever. he is running for a second term -- >> i agree. >> everybody talks about zero, we will do short-term stimulus and long-term cutting. the only people who have presented the plan are the republicans with the ryan plan. though ite realistic, is not the republican debate where they were asked of $10 and spending cuts with $1 in increase, and not one republican candidate would endorse it. >> if you ask me if i would

spend a dollar, i would say no, but i will tell you what happens in the end. you get the republicans insisting on cuts, which it obama and the democrats have refused. you get them to agree to real cuts in entitlements and tax reform, and i assure you he will get people like tom coburn who will agree to increases in taxes in the simpson committee. i would go for it, and the party would go for it. >> ok, prophecy. the historically progressive wisconsin recalls its controversial conservative governor. >> i have got some bad news for tom barrett, but good news for wisconsin. as it turns out, wisconsin actually gained -- that's right, gained -- more than 20,000 new jobs during my first year in office. >> that is wisconsin gov. scott walker, making the case that he should keep his job in the tuesday recall election. most polls show him with a slim

lead over tom barrett, the democrat. in a state known as midwestern ice, this campaign has been anything but -- midwestern nice, as campaign has been anything but. what is the significance of this in 2012, charles krauthammer? >> it is huge. some say it will have an effect on the presidential. i am not sure, but it will surely have an effect on the state of the unions in america. this is the big one. this the third shot that unions have taken at walker over the change in the collective bargaining agreements. democrats failed in the first two, and this is the last one. very close, as you say, but if the unions lose, this will be a huge setback. they have already lost as a result of the walker law. in some of the local public sector unions, half of the membership has disappeared. they note that it is is a threat

to the existence of these public sector unions. >> that is why you have such a huge influx of conservative money. >> no union money? >> yes, union money. the democratic party has not put in the kind of money that at republicans have. >> obama himself -- obama is a little worried about losing. >> the dnc is not put in as much money as you would have expected. very put out, democrats and wisconsin. i am not sure what the effect will be beyond wisconsin. gov. kasich took a similar shop to his stimulus proposal and it went to referendum and he lost. >> ohio has a straight up or down vote on the referendum. this is recalling the governor b. it is about six-one, the walker folks ooutspending

democrats. colby, the intensity and passion in wisconsin is like nothing people of scene. -- have seen. >> when you come down to the question of recalling a prominent politician, sure, it is going to strike home, but this is a very peculiar wisconsin issue. it is not a national issue. passions are inflamed over something very personal. also, the impact of this governor has had on the lives of people in this state because of his policies. very much wisconsin-centered, not national. >> but there is a huge national issue, public employee pensions. over the decades, because of uneven bargaining power, the republican employee unions, which have been growing while the unions have been shrinking, have managed to get sweet

pension deals that the states cannot -- public employee unions, which had been growing well and all that has been shrinking, as managed to get sweet pension deals that the states cannot afford. no money for -- >> each state panel's it differently. >> abolishing collective bargaining? >> i think walker has gone a beat too far but the underlying issue is a huge one. >> obama will be in minneapolis and then in chicago with a few days leading into this primary. he is not going to was concentrate he does not want to be associated with the possible huge -- he is not going to wisconsin. he does not want to be assisted with possible future embarrassing loss. >> the democrats have one great surrogate, former president bill

clinton. >> while i do not think i did anything that was illegal, i did an awful lot that was wrong. . there is no one else responsible for my sins. >> that is former senator john edwards, accused of using money to conceal an extramarital affair. the judge declared a mistrial. the verdict on john edwards came in a long time ago, didn't it, nina? >> it did, but i don't know anybody in the legal community, conservative or liberal, who thought this was an appropriate case, a good case, or unique use of the law. furthermore, it was started in the bush administration by an ambitious u.s. attorney, who in, and thet reined obama administration did not have the you know what to say no, we will not go forward with

it. it was a waste of the government's money. >> charles? >> yes, i think nina is 100% right. >> whoo! >> i am equally shocked. the verdict is important because there is distinction between bad behavior and illegal be a fair. as humans, we want to see people punished for sin. there ought to be as distinction between the sinful and the criminal. this was the line to draw. it was not criminal behavior. it is a good thing that he will not go to jail for this, but he will certainly suffer. >> this was an old-fashioned public shaming, the way we do this in our modern litigious society. this is like putting john stocks.in tehe he truthfully said -- but he did a good job of saying i just have

to look in the mirror. >> colby his parents,-origin, were so proud of -- colby, his parents, of modest fortune, or so proud of him. all he has to do is look at his father, his harbor and father, behind him in that scene -- heartbroken father, behind him in that scene. >> nothing he can say will change anything, but what he does may have an impact. >> defense minister of britain in the 1960's, it terrible sex scandal, and he was totally ruined. then he became a social worker, and he worked quietly the rest of his life at it, and the green gate and an obe at the end of his life or for the good he had done. it is possible. >> nina, any suggestions? >> after the haitian earthquake,

he went down there, nobody knew that. he worked. >> sounds good. tune in next week. gordon peterson will be back with "inside washington."