♪ >> too many were motivated only by the appetite of quick kills and bloated bonuses. >> this week, on "inside washington," president obama says the improving economy is no excuse for wall street to return to business as usual. >> republicans snub the baucus health care plan. democrats, too. >> it does not pass the smell test. >> those to say we're scud missile defense in europe are either misinformed or misrepresenting the reality of what we're doing. >> our missile defense changes, is it an improvement in security or a gift to the russians? former president jimmy carter has a theory about some of president obama credit." . >> i believe he should not be president because he happens to

be african-american. ♪ captioned by the national captioning institute --www.ncicap.org-- ♪ >> welcome to "inside washington co yes? -- i am margaret carlson. gordon peterson is on vacation. the federal reserve chief says the recession is probably over. a year after the failure of lehman brothers, president obama traveled to wall street to talk about preventing a repeat of the economic meltdown. >> the only way to avoid a crisis of this magnitude is to ensure that large firms cannot take risks that threaten our entire financial system. and to make sure that we have the resources to weather even the worst of economic storms. >> said the president is saying some in the financial industry have not learned the lessons of the economic crisis. we're talking are regulatory

reform. how did wall street respond to this? charles? >> with a bit of a shrug. everybody understands that in the end, the government is going to bail them out as happened last year. it will not allow the large institutions to fail. so there is no incentive to rein in risk if you know at the end of the day, and uncle sam will ride in on the rescue. >> they are already developing new things about the credit defaults slops. but there is nothing. >> the only thing is in the way to take risks. the regulatory practice does not have much of anything. a year after the crisis, they have made some changes. basically, congress has done nothing. maybe they will get around to doing something, but i would not wait for that. >> what about the regulations? we have people from ivy league

colleges trying to keep earning a fraction of what the people on wall street rather try to keep up with the deals. >> if they get ahead, it will only briefly. the idea is to keep trying. otherwise, what are we going to be? in the tank to wall street for our entire lives. i think the lessons may have been seen but not yet learned. , we will see if congress has the fortitude to adopt some real changes that matter without the loophole. >> the attitude of wall street seems to be we're not just too big to fail, so you rescue was, and we will do it again. we're too big to resurrect. >> i think it is like the health-care industry. that speech will not change anything. i think it is possible that the administration will try to increase capital requirements for the institutions. i think there will be able to do

something with the credit agencies. the talk about the consumer protection agency to protect consumers on wall street. it is not going to happen. at least the industry is quantified at least as hard as the health insurance industry is while fighting health insurance and the public option. the question is, will obama be able to get it done? >> he will run into the usual parochial politics. there are 8 million regulatory agencies and each is controlled by a congressional committee or subcommittee. this the committees will not give up their power by folding them all into one giant regulatory agency. besides the merits, i am sure -- not sure we should have one big regulatory agency. congressional politics do nothing. i will be shocked if obama can do this. >> the lobbyists are just thundering through the halls of congress, paid by these banks that were apparently on the

skids. but they have enough money to clear up gucci hall again. democrats are almost as bad as republicans in not being very anxious to unmake friends with the people who give a lot of money in one way or another. >> in new york delegations are almost entirely democratic and are owned by wall street. i just wanted to translate. >> thank you. and they do not want to make any of those friends off. >> they protected wall street and tried to prevent regulation before the crash, and they remained friends of wall street now. >> that is the real problem. because so much time has gone after the real collapse that memories are going to fade. and it will not be the public

clamoring for regulatory reform. >> and it looks like they're giving up of cap and pay in any way, but there should be away to regulate bonuses that are based on taking the totally outsized risk. and then you get the bonus before the wages of that come due, and then you have gone belly up. the big purse have pocketed the bonus. >> i do not think they can regulate pay or bonuses. in theory, you can, but there are always exceptions and loopholes. they need to stay away from that. they need to be watching people who do too much leverage. there has to be some way to stop people from doing these 30 and 40-1 ratio. >> one of the things they're planning to do is to require more institutions to hold on to some of the loans. when i was in banking, you made the loan and would get paid

back. but now, with the packaging, they sell them. it is hard to the to hold onto some of these loans a lot alone be accountable. >> that is right. you cannot stop them up into little pieces and send them downstream. but to go along way. are you against that kind of interference and the market even if it helps? >> believe the lead the free market, but wall street is not a free market. it is then in may and freddie mac which had the implicit guarantee of the government. it was never a free and independent enterprise. now all of wall street has the implicit guarantee. if the government is behind you, it is simply backing it, and it should regulate. ultimately, if you and i are going to be held hostage, paying off the debt if it collapses, yes, we should regulate. >> and there has been no time out, no punishment to teach them

anything. >> it is not punishing that i worry about. i worry about risk in the future. i think we should do some of the things that are said and not allow the ideology -- >> we grudge old irish catholic- like punishment. so if the president stops plans for a missile shield system in eastern europe. >> the new missile defense architecture in europe will provide stronger, struck her, and swifter defenses of american forces and america's allies. >> is a pending plans to locate a ballistic missile in poland and the czech republic. the president says there better ways to deal with that threat. but the time is days before the russian president needs mr. obama, and makes people wonder if mr. obama is bargaining with the russians. how do you see this? >> he is a consolidator, and he likes to split the difference. i am sure he does want to appease the russians, but that

does not mean it is a bad idea. it sounds like it is better to go with the system. it is like secretary gates, because he wants to do what works now and not worry about the fancy systems until later. there is evidence that the iranians are building these small and intermediate range missiles that are threatening europe. it is not threatening us. in the practical terms, it makes sense. >> and it is politically sheer genius that he has gates as the secretary of defense making his case. gates is a big russian expert and a was a hard-liner about russia a decade or two ago. he argued for the opposite position and said the intelligence has changed now and who was head of the cia. i think this is extremely helpful to making the case. >> well, gates gives obama protection. but charles, you probably still like this system that does not work to protect a threat that does not exist. [laughter]

>> what i like on this show is the neutrality of the host. it is sort of like being in the old sent them -- in the old soviet union. but it least i am not in the gulag yet. look, this was a major capitulation to the russians. this was all about russia. it is the idea of a change in intelligence which is nonsense. iranians already have intercontinental ballistic missiles. by definition, icbm's, the idea that our intelligence has changed, which means our intelligence in the past is faulty. we're not going to rely on the intelligence today. the idea that we have to abandon the program which is aimed at a long-range threat in order to meet a medium-range threat -- why would you not do both? the both exist. the russians are the ones who put remarkable and brutal pressure on east europeans on this. it was a concession to the.

the reaction by the poles and czechs shows how shocked the europeans are that we betrayed them and abrogated a security agreement purely as a result of the pressure of the russians. it is a big change in the relationship with eastern europe and the west. it is the beginning of the detachment of east europe from the american security. >> what is the intelligence is faulty, and why can we not do both short-range and long-range at the same time? >> their two questions there. on whether the intelligence is faulty or not, so says charles. that is not what secretary gates says. the please stand by to make a choice -- [laughter] it might be tough, but i think i am going to go with gates on this one. >> i did not say it was faulty intelligence. i said if you change your position on the basis of a claim that the previous intelligence

is faulty, what you have 100% confidence in the new intelligence? >> you do not. >> you do not. you never do. >> the new intelligence. >> i would love to -- i think you have bedtime the pot -- when two of the russians' role in this. they're the ones who objected strenuously to the threat of missiles and the radar in poland and the czech republic. no question about it. this pleases them very much. but the question is -- the big question is whether the u.s. will go forward with the missile defense shield in europe. this is what secretary gates has promised, that it will do it this way, but will begin around to it? will they do it that way? >> let me just say one thing. you cannot fight the world. our biggest threat at the moment seems to be that we're very worried about iran. we need the russians to help us

impose sanctions if that is where we're going. if you get that out of this, we will have gotten something. is this too early the to compromise -- is the president giving too much to the russians too early? >> i do not know. it is on so many friends, but they have to split the difference in the find the middle option. that is what he is doing. >> from the gulag, how was this boy to play out in our negotiations with russia? >> they said this is splitting the difference. it is not. this is total capitulation. if you wanted to have the defense in the intermediate, you can send out egypt." ships it to the black sea today. -- a dance and egypt's should to the black sea today. you could have one system and the other and keep them in the

czech republic. this is a concession to the russians. it is a magnitude largely unseen in the last tender 15 years. i suppose the area for obama is to build a strategic bomb shell which is completely worthless and useless. who cares how many the russians have? what we really want in the turn would be cooperation on iran. there is not a shred of evidence that the russians are going to help us on iran. the russians announced a week ago that they will not support any sanctions on iran. so what did we get in the return for vitriol of the poles and czechs? nothing. >> we have a system that has never really worked. >> what is the basis of saying it has never worked? >> all the failed test. >> all the failed test? we have had one successful shootdown in this pacific, one

after another. >> we have to get the interceptors. >> that is right. it is an isolated missile, not many. >> we had a test in the pacific. it was the shootdown of a missile, a korean missile. the idea that we would shoot down a russian arsenal, of course, is nonsense. everybody is expecting that. but whether we're talking about iran or corgetkorew, their unsophisticated. >> we still have alaska and california. >> that is what i am sang. they are primitive systems. that is what we're attempting. we have that capacity. but we do not have it against iran in the absence of that. >> is there any possibility that we will get any iranian

concessions? >> we have to look to the proposal and the alternative. we have to better react to iranian missile strikes. we cannot lose sight of the russian agenda. the still have an interest in moving into eastern europe with their power. so what do we do it this happens in poland and the czech republic. this is nothing to blink at. on the either hand, the reference that we're doing this to the polling data the check was slovakia is not about russian nukes. quicksand of the cannot be drained by this at all. but what if they start to threaten poland and the czech republic? or for that matter, germany by

cutting off their gas supplies? it will not be solved by a missile defense system. >> it is not to take over the poles, to occupy warsaw. it is to findlandize eastern europe, to detach it from its current position and to show the eastern europeans that they have no independence of action and. the russians say no missile defense, it does not happen. that has been demonstrated. that is why the czechs and poles were so shocked. >> they did not want this system there. initially, they do not want the system there. >> obama is looking of the short-range systems in poland. >> do you think the polish will accept in the system now? >> the senate finance committee finally delivers a health care bill. >> is balanced.

it is even-handed. everybody is looking at it. no one is outraged. there is grumbling around the edges. >> of the recent negotiations, senator max baucus has released his health care plan. the bill is bipartisan, all right. neither side likes it. some of offered some support to the republican olympia snowe is in the group and might be the most important person in the the senate now. how do see this playing out? >> if i really knew, i would tell you. they labored for the better part of the year and produced a mouse. it has serious problems. it has a relatively good price tag, but it does not matter if you have a relatively cheap price tag on a product that is no good. as it stands now, it would hit middle-class americans so hard that i suspect there would be a total rebellion. they have to fix that if they are going to pass something. if they push it at that end, can they hold on to the more

conservative democrats and olympia snowe? can they do that without the public option? it all gets hammered out in the conference committee if they can get something through the senate. it is very complicated. >> charles, are the insurance companies like this -- do the insurance companies like this? >> it is a mouse, then it is the largest mouse ever. it is unbelievably complicated. the insurance companies do not like it because of the constraints. there will be people who now cannot afford insurance that will get some support -- subsidized or will be forced into paying for insurance. yes, it works for the insurance companies. i am not sure it will pass because the one thing about the baucus bill is it is honest in the sense that the cbo says it will be neutral which shows how expensive it is. it or cost middle-class people. it will cost the young people. it will cost huge amounts of subsidies. all the taxes are born to be imposed on the insurance

companies and be passed on to our premiums. that is what is happening on the left in the red. finally, the calls are out there, and they are huge. >> but they say will create competition. there are regional cooperatives in place of the public option. there's still a huge concentration in the industry. >> yes, there has been some talk from senator wyden and others about creating competition. i wish that would find its way into the final bill. there is a complete lack of honesty about cost. they are either going to have to pay more or did some. it is amazing about not ever addressing this. you cannot have meaningful health reform without somebody giving of something or paying more. now they are saying, oh, my god 1. >> but you'll be paying more without anything happening.

>> let's get to where we should be on this issue. first, it is not a finance committee bill. the other thing i can say without fear of contradiction is that the baucus proposal will not pass. it will not become law. now, it is a vehicle. it is a vehicle for the other members of the committee to start offering their amendments to see what will work on this bill. that is where you get the honest discussion about what will get into the bill. >> relatively, i noticed. >> and then you get to the larger debate. you have to pull in the bills so the other committees confession is it into their bills, too. >> i noticed this week as senator patrick leahy dropped a bill there would get rid of the antitrust exemption for the insurance industry. if that ever happens, you might actually see some competition. >> maybe peter >> thank you. a former president sees racism feeling some criticism from the president.

that is next. >> the the people that are guilty of that kind of personal attack against obama have been influenced to a major degree by a belief that he should not be president because he happens to be african-american. is a racist attitude. >> the president does not believe that the criticism comes based on the color of his skin. >> there has been a fair bit of discussion this week about former president jimmy carter." assertion that racism motivates some of the animosity against president obama. the white house would clearly rather be talking about something else. you wrote a column on this, colby king. what did it say? >> the column was addressed to the people that feel president obama -- the would not want him to become a model hope he can

do -- that with senator kennedy did but with a brain tumor. emerson said that. aside an example to people who welcomed the time bombs with animosity of the seven americans. that's it, i do not think you can quantify this and say that all the people who oppose obama are motivated by race. i do not think so. that also said, i remember a song written by julie stein bag in the early 1940's the said, " is teams of heard this song before, it has an old familiar score." going back to 1968, there was a guy named george wallace who also realize that race was something you cannot talk about, so they had another code in which he talked about centralized government, taxation of people, individuals bring on the federal government taking money. some of that is what you see

now. it is in some of the rallies that were held in august and about some of the people who showed up in washington last weekend. but to go from bad to say this is a racist, anti-obama action, you cannot make that case because you cannot prove that case. but there's also the case that something is underlying this. >> right. you do see these mobile reactions to obama. but he was elected in this country. >> during the campaign, they did a brilliant job of ignoring race as an issue. with the aches -- with the exception of reverend wright. after that, it was not an issue at all. robert gibbs and his crowd just do not want to hear it. so that is smart. it worked during the election. that is what they're doing now. ignoring it probably is the best thing. >> bush was called a liar by

harry reid and by senator kennedy, not fringe characters. howard dean, head of the democratic party, said "i hate republicans" in an article again, "i hate george bush." we had novels and plays about the assassination of george bush, not of somebody you never heard of. it honored by elite media and society committee idea of assassinating george bush. in the the bush years, dissent was the highest form of patriotism, i'd hurt. now that we have a democrat in the white house, it is the lowest form of racism. >> there's some people that have never treated the president that way in a speech before congress. others would feel they have good cause that had nothing to do with race. he is only eight months into his presidency. to have our level of fever pitch craziness, at this time, is a little scary. >> that is because the ambitions

are the highest since fdr. he is not a modest man. >> charles, you have the last word. that is it for this week. tune in again next time "inside washington." ♪ >> for a transcript of this broadcast, log on to insidewashington.tv.