captioning sponsored by macneil/lehrer productions >> sreenivasan: as president obama closes a door on cold war hostilities between the united states and cuba, american businesses wait in the wings for new opportunities with the island nation that has for so long been off-limits. good evening, i'm hari sreenivasan. gwen ifill and judy woodruff are away. also ahead this thursday. the limits of free speech and creative expression in hollywood in wake of a massive cyber hackç from steve carrell to rob lowe, stars express dismay over sony pictures' decision to cancel the release of a satiric film on north korea. plus, economics correspondent paul solman tests out holiday gifts that can help people create better habits and win the daily struggle between naughty

and nice. >> you have yourç hershey's ki. now what do you want, another one. >> yes. >> you go back. you reopen it. this is a nice product where i had my one hershey kiss. >> right, that's all we should have. >> and now you hear the lock and now you can't get anymore. >> sreenivasan: those are some of the stories we're covering on tonight's pbs newshour. >> major funding for the pbs newshour has been provided by: >> lincoln financial-- committed to helping you take charge of your life and become you're own chief life officer. >> supported by the john d. andç catherine t. macarthur foundation. committed to building a more just, verdant and peaceful world. more information at macfound.org >> and with the ongoing support

of these institutions and... >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbç station from viewers like you. thank you. >> sreenivasan: the president's policy shift on cuba was celebrated, and criticized, today, from havana, to miami to washington. cubans and americans alike digested the implications of ending a deep-freeze that has lasted for decades. hope filled the streets of havana this morning as cubans welcomed renewed diplomatic ties, with the united states. >> ( translated ): with these new relations, cuba is hoping for prosperity. it is great news for the end of the year, the country's economy is going to grow, relations areç going to improve. following 56 years of revolution, this is the best that could happen to our people. >> ( translated ): cuba and the united states have never been

enemies. there were just some political issues which were already out of place, and these steps are long overdue.ç >> sreenivasan: the u.s. policy shift will ease economic and travel restrictions on cuba. it grew out of more than a year of secret negotiations facilitated in part by the vatican, where pope francis offered his congratulations. >> ( translated ): today we are all happy, because we have seen how two nations who were separated for many years, yesterday took a step closer to each other. >> sreenivasan: but in miami today, republican congressman mario diíaz-balart charged president obama got nothing from cuba on improving human rights. >> there are little demands if any for freedom, for elections, for accountability, for the freeing of the rest of the political prisoners thatç president obama has not deemed it important enough to require their liberation. and yet he says he is doing it for the good of the cuban

people. >> sreenivasan: despite such criticism, white house officials dismissed any possibility of congress trying to block the president's actions. but the house and senate would have to act to repeal the long- standing trade embargo on cuba.ç >> the president has done all he can do using his executive authority and the remaining restrictions can only be removed through congressional action. and we certainly encourage congress to act in a bipartisan fashion to do that. >> sreenivasan: in the meantime, presidential aides said they don't rule out having cuban president raul castro visit the u.s. we'll explore the possible diplomatic, political and economic fallout from the cuba policy shift, after the news summary. stocks made a sharp surge today, extending wall street's best day of the year. tech stocks led the way and built on yesterday's gains, when the federal reserve pledged to be patient on boosting rates. the dow jones industrial average had its biggest gain in three years, rising 421 points to close0a,:b::br the nasdaq rose 104 points to close at 4,748.

the s&p 500 was up 48 points to close at 2,061. and the price of oil dropped yet again, to $54 dollars a barrel. there's word today that qmi%n air strikes have killed three senior "islamic state" military leaders. that's according to general martin dempsey, the chairman of the joint chiefs of staff. he's told "the wall street journal" that the air strikes happened in iraq in recent weeks. he says: "these are high-value targets, senior leadership." in nigeria, suspected islamic extremists have killed 35 people and kidnapped at least 185 more. it happened sunday in a remote, northeastern village, near the town where boko haram militants seized 276 schoolgirls in april. the news took days to get out because the militants destroyed communications towers. russian president vladimir putin vowed today that his country's economy, and the ruble, will bounce back within two years. in a three-hour news conference, he blamed falling oil prices anç western sanctions over ukraine, and russia's dependence on

exporting oil and gas. >> ( translated ): of course the current situation has been caused primarily by external factors. but also, much of what wasç planned to be done and what we said we should do hasn't been done with regards to the diversification of our economy over a period of nearly twenty years. >> sreenivasan: putin also remained defiant, vowing that the west will never defang russia. his approval rating amongst russians still stands at 81 percent. back in this country, an independent, external review of the secret service is recommending new leadership from outside the agency. that's according to a panel appointed by the homeland security department after a number of security lapses. they recommend greater accountability at the agency and a higher security fence around the white house, among other things. the suspect in the boston marathon bombing returned to federal court today for the in july 2013. dzhokhar tsarnaev appeared at a final pre-trial hearing.

the 21-year-old has pleaded not guilty in the attack that killed three people and wounded more than 260 others. jury selection is set to begin january 5th. tsarnaev could face the death penalty.ç and ford motor company expanded a recall involving air bags today, to make it nationwide. another 447,000 vehicles have to be checked for faulty inflators that can cause driver-side bags to explode. the air bags were made by japan's takata corporation. before now, the recall was limited to states with high- humidity, mostly along the gulf coast. still to come on the newshour, the many impacts of president obama's move to thaw relations with cuba. how the battle of cyberthreats versus freedom of speech is rattling hollywood. a culture of violence facing teen inmates in one of the country's largest prisons. how congress' spending bill rolls back regulations for big banks on wall street. holiday gifts that encourageç better habits. and, stephen colbert signs off

on his last report for comedy central. >> sreenivasan: now back to theç united states' restored diplomatic relations with cuba. for more on what it means in practical terms and efforts to lift the economic embargo which is still in place, i'm joined by our chief foreign affairs correspondent margaret warner, and newshour political director domenico montanaro. what can the president do on his own without needing congress? >> well, first of all, as you said, he can normalize relations with cuba just as, for example, nixon normalized relations with china, with whom we were still at odds. so that's the first thing he can do. secondly, i learned just this afternoon that establish a u.s. embassy, which members of congress have vowed to not fund tturns out the u.s. intersection is in the old u.s. embassy. it has 360 people working there, including 67 americans. and rf one senior official said

to me, "right now, we're not even sure we need additional personnel. the building is a little shabby but they can go right ahead. he can take cuba off the sa stae sponsored terrorism list. and he can useç licensing authority to ease all travel and investment restrictions so people will be able to use american credit cards there, more people will be able to travel, transfer more money there. what an official said to me today, though, is it is not open for business, that it is not open-- the economic embargo still holds if you're talking about big american hotel chains going down there. that is not the case. so there will be a limit on that. >> sreenivasan: domenico, we heard from people on the streets of havana and the streets of miami but where is public opinion in the united states about liftin lifting this embar? >> it's shifted over the past quarter century. florida international university does this big poll where they

look at cuban americans who livç in miami-dade county, where the huge majority of cuban americans are, and in 1991, if you look back at the polling, 87% of cuban americans supported the embargo continuing. but if you move thated for to 2014, this year, now that is completely reversed, and you see 52% ofç cuban americans oppose the embargo, 48% supporting it. that's a huge shift. if you look inside the numbers, the shift really comes generationally. when you look at young voters, 18-29, cuban americans, the kids of those people who came over here, you know, a generation ago, 62% of them, 62% of their kids are completely fine with getting rid of this embargo. 55% air, strong majority of those 30-64, are also in favor of getting rid of it. the only group, the only holdouts are those who are 65 and older who remember the castro regime, who may have

escaped the castroç regime, may have been imprisoned, dealt with a lot of their freedoms being taken away from them. and they're the ones who are still the vociferous holdouts and it's why you've seen a lot of people like marco rubio and other people within that community really speak out about it. >> sreenivasan: margaret, in practical termswhat, does that mean to open up diplomatic relations? >> first of all, the administration is counting on some of these very same numbers and they're counting on the fabt-- for instance, if congress were to cut off money, for example, all the visa processing that goes on now, some of their own constituents would be very upset about that. so reopening diplomatic relations really means the u.s. thinks it will be able to cooperate now with cuba on things like counter-terrorism, identifying the bad actors in the neighborhood who may be trying to transit through cuba, just as they already do on human trafficking and smuggling, once they got this migration agreement. they hope to establish reciprocity so, forç instance, american comes will be able to

leave havana, and cuban diplomats can't leave new york or washington. what they aren't sure of within the cuban bureaucracy, you have a lot of old-tierms, too, cuban old-timers for whomhthe u.s. hs been the bogeyman all along. normalization wasn't even on the list of what cuba wanted when these negotiations started. who do they blame? it will be very interesting to see how those negotiations with cuba go. congress isn't the only actor here. >> whose list it was on was presidenpresident obama's list. a big part of his checklist of things he's wanted to get done and he's free from any kind of elect torral politics and he feels democrats, 2016 or otherwise, can lean into this policy because they look at those numbers and it's not the third rail it used to be when it comecame to florida politics. it will set up a huge fight in 2016, potentially, because jeb bush, the first person who said he might be in for 2016 is against the policy andç hillary clinton is for it.

>> sreenivasan: domenico montanaro, margaret warner, thanks so much. >> our pleasure. >> sreenivasan: many u.s. businesses have long wanted to extend their reach inside the communist isle ç thanks for joining me. who is in line. who is waiting in the wings? there's plenty of u.s. businesses looking to get in from the airlines to the caterpillar, which wants to open upa i dealership on the country. but there are some limitations. this is a market what has been off limits to american businesses, but it's still a centrally run, state-run economy, which is strapped for cash, and play bietsz own rules, which currently foreign businesses in the country have to work with joint venture partners with cuban firms, which limits who they can hire and how they can operate. and it's also worthç rememberig that cuba is a relatively poor country by international

standards. most of the citizens still work for the government. there isn't much in the way of spend powering there. thirdly, it's not an untapped market. there are plenty of foreign companies. there is a spanish hotel chain,ç malia, a canadian mining company. there's a british tobacco company that lshed has a deal to distribute cuban tobacco around the world. while there's an opportunity for american businesses it is not an untapped business. >> sreenivasan: if there is international competition already there, what is the business opportunity for hotel chains and casinos to be so excited about? >> well, i think that they see tourism, which is now cuba's biggest economy, part of the economy now, as one area that they could tap into. if any on a carnival cruise today, it sails around the island and goes to jamaica or mexico. there areç canadian cruises tht stop on the airline. american airlines flies

chartered flights to the country but they seem the opportunity to resume kind of travel that existed before the castro regime took over. there is opportunity, also, for agriculture companies. an interesting fact is that of rice a year, which is five times what americans eat, despite rationing in that country. so rice farmers and others see an opportunity, even with the small restrictions that were lifted, the agriculture industry could benefit because they-- buyers may not have to prepay them, for example, for them to ship goods to the country. >> sreenivasan: you mentioned spending power. let's unpack that a little bit. even with the 11 million people that are there, who can actually afford the caterpillar, opener coke and pepsi? >> coke is a great example. coke sells its product in every country on the planet except two. one is north korea, and the

s cuba. i'm sure the cubans would enjoy drinking coca-cola but what they really need is bricks to build houses, and asphalts to repave the roads. the opportunity is more of an infrastructure play. the best business you could open in cuba is a home depot. there's plenty of labor and a great need. if you go outside of the tourist area, the infrastructure, the buildings areç crumbling. there are no street lamps, really. telecommunications is another area that's been underfunded. there's a state-run telecom company, but cuba basically lags much of the world in broadband benitration. there are fewer internet connections than in sudan or fiji. that's because the government has controlled internet access. there's basically one fiber optic cable connecting cuba to the world through venezuela. but there's no 3g, or 4g. companies like verizon or at&t see an opportunity there.

they don't even have roaming agreements. if you travel to cuba, whether you're a cuban or tourist, it's actually prohibitively expensive to make cell phone calls. >> sreenivasan: what sort of businesses can open without much infrastructure beingç layed? credit cards, for example? >> yeah, that's right. the one measure the government has taken is it will allow u.s.-issued credit cards to be used in the country. previously, if you were traveling there, you either had to travelç with a large amountf cash or you had to use a non-u.s. bank card. so that's one concrete step the white house has taken. they also say they're going to allow imports of residential goods, as well as services that are for small business like restaurants or barber shops, that sort of thing. so there is an opening there for that sort of service industry business. >> sreenivasan: another marcello prince, from the "wall street journal" joining us from new york. thanks so much. >> sure, thanks for everything. ç

>> sreenivasan: for weeks, sony pictures was reluctant to pull its movie, "the interview," from theaters. but yesterday, it did so after new threats. a day later, that decision is taking heavy criticism on mutliple fronts. here's jeffrey brown with more. >> you want us to kill the leader of north korea? >> brown: for now at least, and maybe forever, the trailer is all that americans will see ofç the interview. the comedy depicts a c.i.a. plot to kill north korean leader kim jong un. it had been set to open nationwide on christmas day. now, sony pictures has pulled the release after a group that hacked the company's computers, threatened theaters, and they in turn, began canceling plans to screen it. in a statement, sony said it was "deeply saddened" by the effort to suppress the movie's distribution. would-be moviegoers had mixed feelings on the decision today.

>> i think just that right now people really don't want controversy. it's not good for business so they pulled it. >> i think they should have went forward with it. people should not get too sensitive. it's entertainment.é->> brown: y move sparked a drumbeat of angry tweets from celebrities like tweets from celebrities like ben stiller, steve carell, jimmy kimmel, mia farrow, and rob lowe. suspicions about the origin of the hack on sony continue toç center on north korea. but today white house spokesman josh earnest stopped short of a public confirmation by u.s. intelligence. >> this is something that's being treated as a serious national security matter. there is evidence to indicate that we have seen destructive activity with malicious intent that was initiated by a sophisticated actor. >> brown: earnest said u.s. officials are considering a proportionate response. republicans weighed in with their own criticism, as senator john mccain charged the

administration has failed to address the use of cyber weapons by america's enemies. north korea has denied taking part in the hacking, but has said it was a just punishment for sony. after "the interview" was pulled, some theaters planned tç play another north korean related comedy, paramount's "team america," in its place. but the studio canceled that, too. >> sreenivasan: joining us now to look more closely at the impact of sony's decision to pull the movie "the interview," we are joined by david rothkopf, the editor of "foreign policy" magazine. and, in los angeles, sharon waxman, the editor-in-chief of the wrap, a ouws website about the entertainment industry. sharon, i want to start with you, seeny seemed to have the sympathy of creative types-- entertainers, directors, but now that's change. what happened in the last 24 hours. >> apparently at the premiere in los angeles there was a standing ovation after seth rogan publicly thanked amy pascall, the cochairnl of sony for

putting out the movie. i think he probably feels very differently today. i think the creative community feels that they had the rug pulled out from under them. they were sure that the studio was going to go ahead, despite the threats, and put the movie out. on the other hand, the studio really had to take those threats seriously, as did the theaters that had booked thatç film, if there were to be any kind of violence or anything untoward that happened, i mean would it really be worth it for putting out a movie? >> sreenivasan: david what, about this precedent? >> well, i think it's a terrible precedent. i think the idea that kim jong un can start sense org movies in the united states ofç america, merely by reaching out a cyber hand and touch a company is a terrible one. and i think it raises a lot of questions for the white house and for washington. this is a world in which these things are just starting. more and more countries are gaining this capability, more and more terrorist organizations are gaining this capability.

are we going to let them impinge on our style of life here or are we going to come up with firm, clear responses that deter them from doing it. >> sreenivasan: david, staying with you for a second. what about sharon's point. if sewn hereleased this, and if, god forbid, something did happen at one of these theaters they would be held to task saying this was irresponsible. you knew this was coming. the hackers warned you of someç sort of terror threat. >> i think sewn could have gone gotten together with the theater, the police, industry associations, gotten together with the government and done everything they could to ensure security within these theaters. secretarily, foreign countries that attack the united states soil do so at the riskç of a response and we've seen what happens when people do attack us here, and so it's much clierer when you take physical action against us, we know what we are doing. finally, movies sometimes coopen that produce violence in the theaters, and the movie companies have been less

reluctant in pass cases than this case. i think we live in an atmosphere of fear in the united states where there's a lot of paranoia about this kind of thing, and what we're letting ourselves-- happen to us is that outsiders who are not afraid of breeking the rules are starting to dictate our way of life in a way that's very, very destructive, and it needs to stop. >> sreenivasan: sharon, what about the idea of people are now second guessing sony's decision from theç get-go? why even green light a film, even when the c.e.o. of your company says don't do this, and the executives throughout this thing say don't do this? right now we couldn't necessarily make a film in america that threatened the life of the american president. that would have the secret service all over us? >> i dhk that's a very valid point. the hack started on november 24, but the concerns over the potential repercussions of making this movie, which, again, is a light seth rogue an, james franco comedy, exphoots a very silly movie from what i hear

from people who have seen it. nonetheless, it touches sensitive aspect for an enemy of this country, or for somebody who is a crazy dictator in a faraway place. and most particularly it depicts his assassination. it doesn't just poke fun at him like "teem america" did. it depicts his assassination and there's something very different about that, and i don't know if that would have been considered acceptable for another country that we hpoe dealings with or don't have dealings with, say, iran, or something like that. so i think that the question is what was the thinking at the top of sony when you have the c.e.o.-- because these e-mails there were conversations going back and forth, particularly about the assassination scene-- request kwe have his face melting a little ?ress can would be obscure that with the fire? are we okay now? and you have leaked e-mails between amy pascall and seth

rogue an saying, this is the first time in 25 years tokyo has ever tried to interfere in our involvement in a movie. please understand. instead of saying i don't want to be dictated to by the suits, which is, of course, artists will always say. but nonetheless, the decision was made to moveed for as the writers of the film wanted to, dwe picketing a real-life assassination. and i think that there is some questioning of the judgment behind that call. >> sreenivasan: david, i see you shaking your head there. >> well i think-- youç know, is appalling that, you know, ayersts are being interfered with. there have been plenty of movies in which foreign governments, foreign leaders have been depicted bat badly and where does it stop? do we allow the potential threat ofç a cyber attack influence te way a magazine covers something? do we allow it to influence the way-- >> it does already. it does already. >> no, it doesn't. i don't believe that it disw. it certainly wouldn't affect the way we cover something at our

magazine. and i don't think it would affect the way the "new york times" or the "washington post" covers things. >> i think we know perfectly well that the responses to some of the carc turs of the prophet mohammed in europe and other places has, indeed, had violent response and has tragically had a chilling effect on free speech. i'm not saying i'm in favor of it, believe me. i'm saying that, that is the reality of the world we live in. >> threats are reality. how we respond to the threats are the challenge of this time. and i think-- >> agreed. >> and i think there's a challenge that the film community has to respond to. there's a challenge that theç rest of the business community that will be more vulnerable to these threats, and there's a real challenge for the u.s. government to come up with responses to this kind of thing that actually deter people from taking this kind of action. >> sreenivasan: allç right, david rothkopf from "foreign policy," sharon waxman from "the wrap," thank

>> sreenivasan: the u.s. department of justice announced today it plans to sue new york city over what it says are widespread and longstanding violations of the civil rights of teens held on riker's island. this follows an investigation that found teenage inmates at rikers were subject to the use of excessive force, overuse of solitary confinement, and, "a deepseated culture of violence." earlier this year, the newshour looked at some of these practices with a report by the center for investigative reporting. here is part of that report by daffodil altan.ç >> reporter: every day across the country jail is built for adults. new york state wants to turn teenagers prosecuted as an adult no matter what the charge. that means people arrested in new york city end up at rikers island. separated from manhattan by aç long bridge over the east river, rikers holds 12,000 inmates including hundreds of teens. almost all of them are still awaiting trial. they have not been convicted.

officials at rikers told new york board is the teen agressors are in solitary confinement. >> they are in solitary it is more than 10 times the normal utilization of solitary confinement in the united states. it is off the curve. >> dr. cohen is the former medical director at rikers island. he sits on the board of correction. >> teenagers needç to exercise. they need to run around. you can't lock them up all day long and expect them to behave like anything approaching a model citizen or be repentant. it's hard to imagine the response being facilitate or enhanced or being treated like a dog.ç >> reporter: last year the board of correction issued two scathing report, rikers use of solitary confinement as punishment for teens and the mentally ill. they are locked in six foot by

eight foot cells for 23 hours a day. they wake up at 6:00 a.m. you can sign up to exercise for an hour alone in this chain link cage. suicides among detained juveniles happen while they're in isolation. >> reporter: new york council council member daniel drum is one of the few outsiders have seen what the conditions are like for teens in solitary. >> we went into the cell, we saw a rusted bed. we saw a mattress, foam rubber mattress this thick with mold on it. there was graffiti and writing all over the wall. wasn't painted. there was dirt around the etgm of the floor of the cell. there was a small window to the outside about this big. and there was a small window on the door as well. and that is the condition that people who are in solitary confinement, young people, adolescents have to live in 23ç hours a day on rikers island. that to me is torture.

>> reporter: experienced that firsthand. now in the youth council in brooklyn, he was a teen when he was in and out of rikers on assault and robbery charges. without being convicted he says he spent a total of 300 days in solitary. the longest stretch was four months. >> your eyes begin to play tricks on you. you start seeing black dots and you focus on them. it's kind of crazy. it looks crazy. i was sitting and demonstrate how it used to look. it looks crazy. you see the black dots and you're focusing on the black dots and your eyes are following them around in your cell all over. you just look, you know, and you try to escape seeing the black dots but you can't.ç you think that black dots is it. there's no black dots there, you know, it's crazy.

>> reporter: he also remembers how inmates yelled to each other. >> it's a little crack on the side of the door. you get close to it and you scream, you know.ç you scream let me out, let me out. so many people have been in that cell when they screamed on the gate. it smells like a bunch of breath and drool. i cannot make this up. >> reporter: united nations considered solitary confinement to be cruel and inhumane. the investigator on torture is juan mendez. >> in legal term the convention on the rights of a child specifically says that solitary confinement for young offenders is prohibited. it's prohibited as a matter of international law. and it's not capricious. it's because the medical and the psychiatric literature demonstrates that youngç offenders suffer isolation and very different in much worse forms than adults.ç

>> those who work in jail say solitary is a necessary tool for dealing with aggressive adolescent population. >> if you walk in the shoes of a correction officer inside the city's jail system pass judgment on us because do you know what, it's a tough job. >> reporter: norman, president of the union for new york city correction officers is the closest we got to an official response from inside rikers island. >> you go into the belly of the beast and you handle whatever comes your way but you have been to be smart enough to articulate to those young men in there. it's like flying off the wall and these guys are going at it and they're going and going and going and going like the energizer rabbit, they just don't stop. sometimes you have to use forceç and when you use force i instruct my officers use whatever force that's necessary to terminate that threat. >> reporter: for sea brook,

that means using solitary confinement for 16 year olds when correction offices see fit. >> we fought vigorá6gáuz ensure that those that committed fractions in the city's jail system are sentenced to penal segregation. >> reporter: the jails own rules say that teens with get 90 days of what officials call punitive segregation for fighting. more than a week minor infractions like horse play. but little is known about what exactly goes on here because the department of correction is not required to publicly report much beyond how many teens are in solitary at any given time.ç >> sreenivasan: next, let's turn to a story about wall street and banks that's angered many. as one of its final acts lastç

week, congress passed a spending bill for 2015. tucked into it was a provision to loosen banking regulations on hedges or bets known as "derivatives" or "swaps". these are financial instruments that essentially allow banks to hedge bets on things that rise and fall in value, such as mortgages, currencies and interest rates. after the financial crisis, the dodd-frank act required big banks like j.p. morgan to move some of those derivatives, or bets, to other banking units that don't have a federal backstop or guarantee from the government. the idea: no federal guarantee means no bailout. but the provision passed last week essentially cancels it and says banks don't have to move those swaps around anymore. liberals were outraged. the most outspoken voice ahead of the senate vote: democrat elizabeth warren of masschusettes. >> who do you work for, wall street or the american people? this fight isn't about conservatives or liberals; it's not about democrats or republicans.ç

it's about money, and it's about power right here in washington. this legal change could trigger more taxpayer bailouts and ultimately threaten our entire economy. but it will also make a lot of money for wall street banks. we worked on a bipartisan basis. it took a shove from some democrats but both sides of the aisle want to look out for the good old guy. guess what? thisç legislation that has been so scrutinized, needs to also take a look at the fact that it includes $1.5 billion so that the security exchange commission can actually do its job. >> sreenivasan: for a closer look at the roll back andç what

it might mean for banks goinged for we get two views. dennis kellehedennis kelleher ms from the cato institute, the libertarian think attention. he's a former republican staff member from the senate. dennis kelleher let me start with you. what does this allow the banks to do that they can't do now? >> basically, what the banks do within their federally insured subsidiaries, which are backed not just by the governments, taxpayers they, conducted derivatives in that protected organization. and what this law did is it said look, if you want to gamble in the highest risk type ofç derivative, you have to push them out of the banking-backed subsidiaries and put them in a different subsidiary. you can gamble all you want but you're going to gamble with your own money and get downside if you get the upside. you're not going to be able to stick the taxpayers with the bill. in the budget bill, it wasç a

provision in an otherwise pretty good budget deal is said no, the banks don't have to do that anymore. this provision benefits about five banks, the biggest banks on wall street. four of those banks do 93% of all the driffatives trading in the united states. so this wasn't a bank-friendly provision and it wasn't a provision friend friendly to taxpayers. this was a gift to the biggest banks on wall street. >> sreenivasan: mark calabria. >> let me first say why i very deeply share dennis' concern about bailouts and i don't think we've ended too big to fail. i think we need to parse out some of the details. banks have an insured subsidiary, and there's a bank that's uninsured explicitly. it's important to keep in mind what dodd-frank does say, however, is this uninsured part still has access to federal reserve support throughç its so-called 13 three authorities. even if the other part of the bank were to get into trouble, they could still potentially be on the line for the taxpayer. more importantly, let's keep in

mind, dodd-frank already exempted the vast majority, 90-plus% of derivatives, already allowed withinç the deposit pat of the bank to begin with. what this change said is we're going to treat all derivatives basically, the same. the credit default swaps, are going to be treated like interest rates. we'll all be within the bank. to me, i think the extent of this, both before the proponents and opponents have been a bit exaggerated. again, i side 90-plus percent of derivatives were already exempted from this to begin with, and even those outside would have been potentially backed by the taxpayer. so let me close that with using the example the way a.i.g. was set up-- a.i.g.positive had a bank subsidiary and all its credit default business outside of insured depository yet we still bailed out a.i.g..ç i'm left wondering what this change would have stopped in that case. >> sometimes facts obscure rather than clarify. mark's right that this provision applied to less than 10% of the

derivatives tradings of these four biggest banks. but what that doesn't address is what is the most high risk? so the 90% are interest rates, currency type swaps,ç which are relatively low risk, and, therefore, the likelihood of those types of derivatives causing the bank to fail and causing another crisis is pretty low. so the provision that was in the law was actually pretty narrowly targeted, focused on the highest risk type of driffatives. that's what we wanted to push out of the banks so taxpayers didn't get stuck with it. let's remember for a minute, in 2008, that was the worst financial crash since 1929. it caused the worst economy since the great depression. it's going to cost the united states alone between $15 and $30 trillion, with a "t," for the economic wreckage and bailouts. what this provision, along with the rest of financial reform is trying to do,iis to reduce the high-risk activities of this hand full of too big to fail

banks on wall street, reduce those activities, or push them away, push them out, so that the taxpayer doesn't get the bill after the bankers get the bonuses. >> sreenivasan: so why did some democrats, as the one weç heard, along with the president, go along with it? >> well, look, this was a $1.1-plus trillion funding bill for the entire government. and i think senator mikulski, the president, and many others on the hill did a very good job of putting together a very good funding package. the problem, is like all bills-- and i worked in the senate for a long time-- all bills are compromises. there are some thing in there you don't want and some things you do. the president made the decision at the end of the day there was more good than bad. as he said, and secretary leu said, they didn't want to put the provision in there but they were stuck with it. important lesson there is, it's a light on how wall street gets its way in washington. it doesn't have a bill that comes out with democrats--ç republicans and democrats in the house and senate have to raise their hand in the light of day

to vote for wall street. they put them in these big bills so nobody has to vote for them, and they can get their special provisions and the public's deceived and there's no accountability. >> sreenivasan: what about the central argument he's making we're essentially walking backç down that road of banks that are too big to fail, that we're essentially going to protect these big four or five banks? >> we are, and dodd-frank did not end that. so i'm not actually for piecemeal reform of dodd-frank. i'd repeal the whole thing and start from the beginning because i do think it did not address the problems in the crisis. dennis was quite correct saying it's got to be the risk you're looking at. where i would disagree is to me what happened is we had a huge housing boom and bust that caused a recession. we lost 2 million jobs before september 2008. we were in a recession by the time of the financial crisis. and so whenever i hear something smb say, "well, we don't want banks gambling with derivatives," i don't want banks with shoddy mortgages and we're going down that road again. that's riskier than a derivative. banks lost billions on their fanny and freddie holdings of

prefersed shared. we didn't make them push that oát. i'm concerned rather than say let's shrink the safety net, we get in political arguments over this constituency, that's bad because wall street likes it, but because the realtors and home builders like this, that's okay. that's the debate we're inç today. to me we need toned all the bailouts. >> sreenivasan: mark calabria, dennis kelleher, thanks so much. >> sreenivasan: we're getting to that time of the holiday season when people are scrambling a bit to lock down that special gift, often wondering what would make a good choice. but what if behavioral economics and behavioral science could actually help determine more useful choices? our economics correspondent, paul solman, has been looking into that very question, part of his ongoing reporting on "making sense" of financial news. >> demoing a favorite gadget coming out of santa's workshop in recent years.

oon ideal gift for the hard toç rouse. a behavioral economics alarm clock. clocky is among numerous products based on insights from one of the newest and fastest growing branches of economics.ç >> we use we're used to biologil science or semiconductors leading to new invention, but now we're seeing behavioral science-- not just new technologies but new understandings of the human mind are leading to new inventions >> we asked him and his team here at ideas 42, a new york-based behavioral economics consultancy, to suggest some holiday gifts already on the market. the first is a simple new take on an old invention. for the overeaters among us, a smaller plate. >> this plate is actually the sights of plates from the 1960s. so it's not just our waistlinesç that have gotten bigger. it's our plates that have gotten

bigger. research shows when you eat with pliets like this, you just eat a lot more. if you want to eat less, go to your kitchen cubbard and replace this with this. >> reporter: when you let restaurants pick the portions of nptoday's dwarf those of just 20 years ago. my problem is going to be that i might load up the smaller plate with more food a second, third time, even. >> you need portion control for that. let's move to a more intensive intervention. so this is a product that basically measures out and tells you, this is how much vegetables and fruit, this is how much starch, this is your proteins. you put this on your plate. the starches go here, vegetables here-- >> brussels sprowts. very big. >> this is the brooklyn vegetable so you'll get a lot of hipster demand for this one. once we have it all loaded up, viola. that's portion control. >> for those of white house can't resist seconds, thirds, fourths, there's the kitchen

safe. >> you have your hershey'sç ki. you enjoyed it. >> excellent, i'm lookinged for it to already. >> now what do you want? another one. >> yes. >> so you go back, you reopen it. so there's a problem with the way we design liz. liz can be opened all the time. >> reporter: yes. >> this is a miceç product. see what's on here? it's a timer. i have had my one harbor kiss. >> that's all we should have. >> you hear the lock, and notice you can't get anymore. >> reporter: just so the immediate temptation is removed in time. >> that's exactly right. the person before getting the chocolate wanted one chocolate. the person two minutes afterwards wanted only one chocolate. the guy in the middle is the problem. this prevents the guy in the middle from acting. >> reporter: me and almonds, this would be life changing. my wife hides the almonds from me and then i go around looking for where she hid them. i swear. it's insane.

now the folks here at ideas 42 aren't simply thinking about gifts that improve your life. alley rosenblum says they're always trying to improve theç world, one behavioral nudge at a time. >> from international development to consumer finance. >> we've launched the $5 million robin hood chronicle success prize. >> reporter: helping the robin hod foundation for a prize to anyone who can double the lowx& graduation rates at community colleges. let's go back and explain clocky. >> think about when you set your alarm clock. you set it for 7:00. what time did you get up? 8:00? what came in between? the evil snooze bar, because even self says 7:00 a.m. sounds good. 7:00 a.m. self says i don't want to get up. the snooze bar is an evil invention. it puts all the balance of power on 7:00 a.m. self. why should 7:00 a.m. self have

all the power? >> reporter: clocky tips the balance. it rolls away so you have to get up to turn off. no doubt, runaway alarm clocks would pry anyone from the arms of even the most muscular morphuous. but they might also drive anyone nuts. quiet! quiet! they don't look like they're that ease toç actually destroy. some of you may already use behavioral health gizmos, like fitbit, or jawbone, tracking your movements, your eating, your sleep. now there's liewmo lift, the portuf prod. jamie kimmel modeled one for us. >> it's a wearable device.ç you put it under a shirt and attach the magnet. >> reporter: sit up proudly straight, shoulders back, headed for, all quiet on the pectoral front. but should you slump-- >> you'll feel it will buzz every few seconds and that means i'm slouching. i'm in a bad position.

and it's giving feedback on my posture. >> reporter: and nudging kimmel's overall commitment to health back into his consciousness. >> it's a really good product to help us realize our intentions. >> reporter: and that's the point of behavioral products. not assuming, like traditional economics does, that buying something means youç actually want it. because what if there is more than one you? >> you've seen these cartoons where the character has a devil on one shoulder and an angel on the other shoulder. a lot of life is like that. i mean, the angel tells you wouldn't it be nice to be a little thinner? wouldn't it be nice to get up on time. theç devil says let's sleep a little more. let's have the extra cookie. they're arming up the angel and the conflict between these two. >> reporter: and our angel self so often loses the daily struggle between naughty and nice. paul solman from the pbs newshour reporting from one pole

of modern economics, sendial's workshop. >> sreenivasan: finally tonight, there's a "finally tonight" coming from late night comic stephen colbert. jeffrey brown looks at his run, and what's ahead.ç >> brown: he gave the late night world something called truthiness. >> now im sure some of the word police, the wordinistas over at websters are going to say hey that's not a word. >> brown: an approximation of fact that somehow captured the moment in american journalism and culture. he presented "the word," a circular monologue that began in one place,úmlandered through puns and sight gags, and ended back where it started. night after night for nine years on the "colbert report," stephen colbert did it all in character, a character named stephen colbert, an excitable,

hyperactive, brash. but oh so reasonable voice of conservative bluster, clearly modeled on the cable tv and radio styles of bill o'reilly and others. >> i think we hit a media moment where people wanted major media to acknowledge the absurdities and some of the hypocrisies that we see in cable news coverage especially, particularly from pundits.ç and so it felt very new and fresh for someone to come along and embody that in a character that he didn't quite admit was a character. we weren't quite used to seeing someone doing this high wire act in public the way he was doing it. colbert grew up in charleston, south carolina, the youngest2of 11 children. and was later part of chicago's famed second city comedy troupe. he joined "the daily show" on the comedy central network in 1997 and became a prominent member of jon stewart's school of faux news.

the two, with other members of the team, clearly tapped a nerve and gained a large following. stewart and colbert drew some 200,000 people to the comically dubbed "rally to restore sanity and/or fear" on the washington mall in 2010. >> in general, these guys are able to step aside from the news flow and comment on the absurdities and the hypocrisies of both government, politicians and the news business and celebrities in0wys that traditional journalists can't do. but these guys have that free rein, and then you add the fact that colbert in particular understood media, understands media so well he's able to get to the heart of what we find so odd and so hypocritical so much of what the news media feeds usç

>> j.b.: on his own show, colbert's brand of humor served to prod and poke a wide range of guests in a way that was unlike other late night tv. colbert stayed in character off the screen as well. at a white house correspondents dinner... with a fake-- or was it real? run for the presidency in 2008. but he also broke character and showed some other sides of himself over the years. at a congressional hearing where he advocated for migrant workers' rights >> i like talking about people who have no power. and this seemed like one of the least powerful people in the united states are migrant workers who come and do our work but don't have any rights as a result. and yet we still invite them toç come here and at the same time ask them to leave. and in campaigning for his sister this past fall as she ran unsuccessfully for a south carolina congressional seat. he's now set to present another side altogether, perhaps the real stephen colbert-0when he takes over for long-time late night host david letterman in

the spring. eric deggans thinks he's been preparing himself and viewers. >> as i said earlier, i do believe he has slowly been dialing up his own personality on the colbert report show. and i believe that there are times when you can watch the show and you can see him flip between playing the character that he originated the show with and being himself. >> he wasn't playing a character, but he would ask a question that was a joke and he would follow it up with a serious question that would allow the artist to actually provide an answer that made sense. and so i think people are going to be surprised by how much of the real colbert they have already seen. and it will just be up to him tç decide what that new framework is going to be on the cbs "late show." >> last night, there were the usual references to the day's big story, in this case, cuba, but colbert also began to wrap up his own show. selling off what he called "nine

years of collective crapb hnd putting the rest out on the curb. >> sreenivasan: and another note from the late night airwaves: comedian craig ferguson, host of cbs' "the late late show", is also signing off tonight after nearly 10 very funny years. on the newshour online right now, it's day 11 of our "12 days of newshour," and today's gift comes from our very own mark shields and david brooks. the newshour's masters of civil discourse offer their tips for easing the tension during heated political debates with your family. read their "guide to holiday civility" on our homepage. all that and more is on our web site, pbs.org/newshour. and that's the newshour for tonight. i'm hari sreenivasan. we'll see you on-line, and again and here tomorrow evening with mark shields and david brooks. for all of us here at the pbs newshour, thqáyou and good night >> major funding for the pbs newshour has been provided by:

♪ ♪ç moving our economy for 160 years. bnsf, the engine that connects us. >> lincoln financial-- committed to helping you take charge of your life and become you're own chief life officer.ç >> and with the ongoing support of these institutions

>> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. ç captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org

report" with tyler mathisen and susie gharib. funded in part by -- thestreet.com and action alerts plus where jim cramer and fellow portfolio manager stephanie link share their investment strategies, stock picks and market insights. you can learn more at thestreet.com/nbr. hay did l did l and the dow jumps over the moon. the big chip barometer rockets 409 in two days. can you trust this rally? what's next for stocks? don't blame me. russia targets oil for economic woes. geoff cutmore reports from moscow on how long putin thinks the troubles will last.