Ben Bernanke was chair of the Federal Reserve during what became the worst financial crisis since the Great Depression. An inside look at the meltdown from the former Fed chair and his defense of bailing out Wall Street.
President Barack Obama and GOP challenger Mitt Romney offer dueling speeches from the swing state of Ohio. They present radically different visions on how to fix the economy. Casino magnate Sheldon Adelson says he’s willing to spend $100 million to keep Obama from being reelected. JPMorgan Chase CEO Jamie Dimon tells U.S. lawmakers he doesn’t know if regulations have made the banking system safer. The Federal Reserve claims the Great Recession set back median family wealth 20 years. And the Justice Department says it will not retry John Edwards. Naftali Bendavid of The Wall Street Journal, Julie Hirshfeld Davis of Bloomberg News and Clarence Page of the Chicago Tribune join Diane for analysis of the week’s top national news stories.
- Naftali Bendavid national correspondent, The Wall Street Journal.
- Julie Hirschfeld Davis congressional correspondent, Bloomberg News.
- Clarence Page syndicated columnist for the Chicago Tribune.
The Obama administration announced Friday it will stop deporting and give work permits to some younger illegal immigrants who came to the United States as children. Diane asked the panel what the policy change means. Naftali Bendavid, national correspondent for The Wall Street Journal, said the initiative is an attempt for President Obama to solidify support among Hispanic leaders and to put Republican leaders on the spot. Julie Hirschfeld Davis, congressional correspondent for Bloomberg News, said the policy is a “big deal” and a push for Republicans to go on record about the party’s immigration position.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. President Obama and Republican challenger Mitt Romney gave dueling economic speeches in Ohio yesterday. New reports indicate a turnaround in the housing market is in sight. Consumer prices in May drop by the largest amount in three years. And JPMorgan Chase CEO Jamie Dimon testified before a Senate committee on the firm's $2 billion loss.
MS. DIANE REHMJoining me for the domestic hour of our Friday News Roundup: Naftali Bendavid of The Wall Street Journal, Julie Hirschfeld Davis of Bloomberg News and Clarence Page of the Chicago Tribune. I hope you'll join us as well. Call us on 800-433-8850. Send us your email to firstname.lastname@example.org. Feel free to join us on Facebook or send us a tweet. Good morning, everybody.
MR. CLARENCE PAGEGood morning, Diane.
MS. JULIE HIRSCHFELD DAVISGood morning.
REHMNaftali, we have a brand new story this morning that Janet Napolitano is speaking today to talk about the administration's decision to stop deporting and begin granting work permits to younger undocumented immigrants. What does all this mean?
MR. NAFTALI BENDAVIDWell, it's been this battle for some time between Republicans and Democrats over something they call the DREAM Act which would grant citizenship to people who were brought here as children illegally, if they were in the military, if they went to college. What this does is a lot of that, except, instead of giving them citizenship, it would let them stay here legally and give them work permits.
MR. NAFTALI BENDAVIDNow, it's very similar to a proposal by Marco Rubio, senator from Florida, who had been trying to find something that was like the DREAM Act but perhaps not quite as far reaching. So this is a way for President Obama, I think, to attempt to solidify his support among Hispanic leaders and to kind of put Republican leaders on the spot.
REHMHow big a deal, Julie?
DAVISIt's a pretty big deal. I mean, it would be -- it's the first sort of concrete thing that President Obama has to show to the Latino community which has really been pushing for him to do something on immigration. He's been unable to and hasn't even really tried to enact sort of the broad overhaul that President George W. Bush tried to get through Congress and failed so miserably to do.
DAVISSo President Obama has sort of not touched that because of all the other controversial issues he's had to deal with, and the Latino community is not happy about that. And this is also a way politically, as Naftali said, for his administration to get a marker down and really kind of put Republicans on the spot and say, do you support this? What are you going to do about it? Marco Rubio has been developing this proposal.
DAVISBut he keeps saying, it's not ready yet, it's very complicated, not sure when it's going to come out. And this basically says time's up. Republicans have to go on the record on this. Do you support it or don't you? And it's something that polls show that a lot of the public, Republicans and Democrats, actually support. It's the sort of small sliver of action that seems to generate some degree of consensus.
REHMAnd, Clarence, it will affect some 800,000 people. Here's a tweet from Marc Ambinder, who says, "It's kind of a your move, Romney/Rubio."
PAGEYes. And that -- Romney/Rubio, that's significant because Marco Rubio has been talked about as a possible running mate for Mitt Romney. And he has also been talking about his version of the DREAM Act which has almost all the same features except the pathway to citizenship which is the most problematic part of it with the Republican base. This is a bold move by President Obama at a time when he's also been criticized for tens of thousands of Hispanic immigrants, among others, who are being held in a legal limbo right now in detention centers.
PAGEAnd he has promised to try to expedite their cases, but, still, it's a real foreign -- in the side foreign politically. And next week, he's supposed to speak to LULAC, the Latin American -- League of United Latin American Citizens which is a leading Hispanic activist organization, and this gives him something to bring to the table.
BENDAVIDIt's also, I think, been something of a weakness for Mitt Romney because during the Republican primary, as you may remember, there was a lot of hard language about immigration. And Romney positioned himself as being to the right, if you will, of Rick Perry and others on immigration. And he's been trying to climb back a little bit.
BENDAVIDAnd there are -- the Hispanic voter -- voting communities is very strong in a number of key states like Colorado and Virginia and Nevada. And so I think this is, you know, whatever the merits of it, it's a way for President Obama to put himself solidly in a position with the Hispanic community in these key states that forces the Republicans to then react.
REHMAnd, Julie, what about the economy? The consumer price index dropped .3 percent in May. That's the biggest drop since December 2008. What does that mean for what the economy is doing, and what the Fed might do?
DAVISWell, this was the largest drop as you said in more than three years, and it was mostly on fuel prices going down. And, of course, that's been a big burden for everyone across the country but particularly those who are struggling economically. So this will provide some relief for people who are dealing with joblessness and wage declines and sort of all the difficulties of the recession.
DAVISIt also gives the Fed a little bit more room to maneuver. It sort of -- it indicates that there's not as much a fear of inflation, and they have a little more room to figure what to do sort of inject more stimulus into the economy, perhaps do more easing if that's the route they decide to take.
REHMShould we expect more easing?
BENDAVIDA lot of people think so. They think that the way things are going with the economy slow and inflation pretty muted that that's exactly the kind of time when the Fed might act. So that is something we might see. I mean, it's interesting that a few months ago, everybody said that the economy had turned a corner and the one dark spot was soaring gas prices. And here we are two months later, and it seems like the economy's stumbling along. And the one bright spot is falling gas prices.
BENDAVIDAnd it just shows the way this economy has really struggled to get traction. When one thing goes right, something else goes wrong, and it's this interconnected and very difficult situation.
REHMBut you've also got the housing market, Clarence, beginning to show new signs of life.
PAGEYes, sputtering along there but showing some signs. Now, there are -- we've known for a while that there's been high demand on the part of consumers and potential borrowers and house sellers. The problem has been the finance market. The banks have been very slow to lend, very reluctant to put that money out there to help stimulate the economy and the housing market.
PAGEThey've turned to safer investments. And so that's really what's been holding things up. And I think the fact that you're seeing this kind of activity in -- it's spotty. It's in various geographic areas and all. But there is a demand out there because we have the finance market...
REHMSo if the Fed puts more money into the banks, will they be more likely to lend or just hold on to a bigger stockpile?
DAVISWell, that's an open question. We've seen not very much of -- not much of what you're describing in the past. When the banks are able to lend more, a lot of times, they've held back because of the fear, as Naftali said, that something else is going to go wrong, and, all of a sudden, things are going to dampen again. The brightening that we are seeing in the housing market is in part due to increased sales and also higher prices. So on paper, it looks good.
DAVISBut the other thing that's driving this is a higher -- more foreclosures, which is good because it shows that, you know, good on paper again because it shows that banks and the market are -- is working through the crisis. But for people and homeowners and people who are underwater with their mortgages, it's not so good because they're facing losing homes and having payments that they still can't support.
REHMYou know, it's interesting that on Monday, the Fed reported that families' median net worth fell almost 40 percent between 2007 and 2010. That's a pretty scary sign.
BENDAVIDIt's huge. And, you know, we all knew, of course, that the recession was terribly devastating for a huge number of people. And this put it in sort of stark relief. I mean, 40 percent is a lot of wealth to lose. And it really affected the middle class most of all. I mean, one of the things that we saw is that the upper 2 percent, you know, actually, their assets increased a little bit.
BENDAVIDSo it will feed a little bit into this argument about the 1 percent and that the very wealthy, you know, do okay while the rest of us suffer. You know, behind these numbers, there's a certain amount of complexity. First of all, they're a year-and-a-half old, so some of this wealth has probably been regained. And, secondly, you know, if you lose your house, that's a terrible thing.
BENDAVIDIf you have a house that you weren't planning on moving out of for 20 years so then it was worth a little less but perhaps some of that will be regained, that's a little different. So I guess I would just say that there's a lot of complexity behind this admittedly, you know, pretty devastating figure.
REHMAnd what about what's going on in Europe, Clarence? How is that affecting or even attracting foreign investors to the U.S.?
PAGEWell, it has made our investment market attractive by the very virtue of the fact that these other European markets, especially, you know, Greece, Spain, et cetera, look so shaky right now. But Europe adds uncertainty to the entire global economic scene. And this is what has got banks here in America nervous. It's got investors nervous in general.
PAGEIt's got the Obama campaign nervous because he has -- a president, regardless of who the president is, has a limited amount of impact on the overall global market. And yet it has maximum impact on that sitting president, in this case, Barack Obama. And the -- what Europe does in the next few months is going to make a big difference about what happens here in November.
REHMAnd, certainly, with the recollections coming up this weekend, we read this morning that hundreds and hundreds of Greek citizens are pulling their money out of banks, and foreign investment in the U.S. has now exceeded its average of the past 10 years in 2010 and '11, suggesting America's lure for capital has at least recovered from the crisis.
REHMWe'll take a short break here. And when we come back, we'll talk more. Jamie Dimon testified before Congress. We'll see what our panelists thought about that. And I've already got an email on that very issue. Naftali Bendavid, Julie Hirschfeld Davis, Clarence Page are all here with me.
REHMAnd welcome back to the domestic hour of our Friday News Roundup this week with Clarence Page of the Chicago Tribune, Julie Hirschfeld Davis of Bloomberg News, Naftali Bendavid of The Wall Street Journal. Jamie Dimon testified to Congress on Wednesday. Awful lot of people, Clarence, thought that the questions given to him were pretty softball.
PAGEThis was not a rough grilling. If anything, it was...
REHMTo say the least.
PAGESome folks called it a coronation. It was interesting that you found that the committee members were so cordial, the Republican members in particular. And some observers noted that it was an example of the kind of influence Dimon has been able to build up over the years with his campaign contributions, which tended to coincide with some of the friendliest reception he got there in the committee.
REHMHere's an email from Diane in Brick, N.J., who says, "There has been no congressional spectacle as dispiriting as the appearance of Jamie Dimon before the Senate Banking Committee. The sight of senators from both parties fawning, kowtowing, asking advice of Mr. Dimon now stands as the new paradigm of legislative oversight. That Mr. Dimon serves on the New York Fed and, in effect, grades his own papers is all one needs to know to realize that, sadly, the vox populi has been silenced."
BENDAVIDWell, people were expecting more of a confrontation because Jamie Dimon has sort of -- he's the sort of self-styled spokesman for Wall Street, right. He's got this big head of white hair. He's distinguished-looking guy, outspoken, runs a pretty successful bank. And his bank just lost this $2 billion to $3 billion investment, and it was very embarrassing. And so he appeared before the Senate committee, and, as the writer says, there was not much -- there were very few fireworks.
BENDAVIDI think part of it is he was very contrite. I mean, first thing out of his mouth was, God, we made a terrible mistake. I said some dumb things. I'm really sorry. We'll make sure it never happens again. I think that defused things a little bit. But it's also true that the money that was lost wasn't taxpayer money. It wasn't even investor money. It was the bank's own money. So it made it a little harder to go after him.
BENDAVIDNow, these days, I think we all feel sort of proprietary about the banks. I mean, we helped bail them out, I think a lot of people feel. And we know that when there are problems with the banks, that can rapidly spread to everyone else. So I think there was a feeling that, perhaps, the senators could've pressed him a little bit more, particularly 'cause he's been such an outspoken critic of bank regulations. And, here, his own bank seemed to be in need of a little bit of regulation before this loss.
REHMAnd he was asked directly, Julie, what effect do you think bank regulation might have had on the scene?
DAVISWell, what was striking was that you expected for this to be a defensive performance, and he did, as Naftali said, come in and say, we're sorry, this was a disaster. You know, clearly, this went awry. And he took responsibility for it. But instead of being on the defensive, he really went on the offensive and was arguing as forcefully as he ever has against tighter regulations of the kind that the committee has been -- and Congress has been trying to enact and agencies have been trying to write.
DAVISAnd, in particular, the rule that's being discussed, the Volcker Rule in the Dodd-Frank financial reform bill that has been, you know, just a bear to be implemented, which would ban proprietary trading, which is the kind of trading that a bank does, not to hedge against losses, but to make money on its internal investments. It would ban that for banks that have access to the Fed's borrowing window.
DAVISI mean, it basically would say that JPMorgan could not do in what a lot of people think that they were doing, in this case, of this failed trading. Now, Dimon argued that this was not proprietary trading to make a profit for the bank. This was hedging against losses. And his other point, which is what Congress and regulators have found as they've tried to implement this rule, is that you can't really distinguish between the two.
DAVISOne man's -- one man will call it a hedge. Another man will call it a proprietary trade. And it's almost impossible to make that distinction in a way that will stick. And that's why it's so hard to implement this, and so he made the case that, in fact, this -- you can't prevent this.
REHMAnd his story and Ron Chernow told The Washington Post, "How can the government exercise oversight when the instruments that federally regulated banks are using and trading in have become so complex, high risk and highly leveraged?" Naftali.
BENDAVIDYeah, I mean, well, that's an ongoing question. You know, we used to talk a lot about derivatives and so forth, and a lot of the financial meltdown was a attributed to that very thing, that financial instruments have become so complex and dependent on so many other variables that it was very difficult to regulate. I mean, I think it's hard, though, to throw up your hands and just say, well, so we can't do anything about this.
BENDAVIDI mean, and this is kind of what this debate is about. And because Jamie Dimon, in some ways, was the voice of Wall Street's opposition to regulation, he really, in some ways, you know, might have been in the hot seat. And it was really striking that the senators chose to lay off him.
REHMHere's an email from Brian in Dallas, Texas, who says, "The move on immigration is an immediate conversation changer following the week of bad economic news and the private sector is doing fine gaffe. That's the advantage of the incumbency, the ability to change the conversation from the presidential bully pulpit." Clarence?
PAGEAnd this is an example of how President Obama can do that when he wants to do it and feels there is a need to change the conversation. Also, when you compare the issues that we're talking about here and the way they resonate with the American people, we're talking about Wall Street and the complexities of these rules and new laws involving derivatives, Dodd-Frank for that matter. They're still writing the rules on -- to implement Dodd-Frank.
PAGEThere is a lot of confusion over exactly how derivatives operate and what can be done about them. Immigration, by contrast, is a hot button issue. Everybody's got an opinion on it, whether it's informed or not. It's something everybody reacts to. And so this kind of issue right now serves Obama well insofar as an outreach to Hispanic voters, in particular, and also for shifting a conversation over to an issue where he stands on firmer ground and has a lot more support.
REHMWell, the other question that certainly has gotten a lot of attention this week is money in all forms. You had Sheldon Adelson declare that he'd be willing to donate as much as $100 million to his preference for this year's presidential campaign to Mitt Romney because he wants to see -- he wants to make sure that Barack Obama does not serve a second term, so he gave $10 million to Romney's super PAC. Julie?
DAVISYeah, that's right. And the influence of this kind of money is going to be definitive. And you have to imagine in this election, and particularly for Republicans who, so far, are doing a much a better job, if you combine what the RNC and Romney have been raising with the super PAC donations, such as Mr. Adelson just gave and says he plans to do more, it's really -- it dwarfs what President Obama and Democrats have been able to do. Now, they want to -- they've said they're going to raise $1 billion on the Democratic side. But it's not been as easy as some would have -- might have thought.
DAVISPresident Obama's doing a whole lot of fundraisers. He had one last night at Sarah Jessica Parker's house in New York City with a lot of fashion and, you know, celebrity types there. And he's held, you know, scores and scores of fundraisers. But Democrats have been -- there haven't been as many Democrats who have been willing to step up in the way that Adelson is saying that he's willing to step up...
DAVIS...to give on super PACs partially on principle and partially just because of the kind of discourse that this campaign has turned into at this point.
REHMYou know, it's fascinating. He says, "I'm against very wealthy people attempting to or influencing elections. But as long as it's doable, I'm going to do it because I know the guys like Soros have been doing it for years, if not decades, and they stay below the radar by creating a network of corporations to funnel their money. I have my own philosophy, and I'm not ashamed of it." Is there a chance of the backlash here?
BENDAVIDI think there's a chance of a backlash, but I think the fact is that if you have a huge amount of money, it's an enormous advantage. And I think the Democrats are really worried about this, that there's all these very wealthy people out there that, over the next few months, are going to give enormous amounts to Republican candidates.
BENDAVIDWhy Republicans and not Democrats?
BENDAVIDWell, that's -- it's a bit of a puzzle. I think part of it is a matter of principle. A lot of Democrats are against super PACs. In fact, President Obama was against super PACs. He's, I think, concluded that you got to play the game, doesn't want to unilaterally disarm, but I think that's part of it. I think it's a lot easier to raise money against an incumbent than in favor of an incumbent often. And I also think that, you know, for all the glitter of the fashion world and Hollywood, there may be more wealthy business people that are Republicans than are Democrats.
REHMAnd who are looking to ensure that tax breaks for the wealthy stay in place?
DAVISThe sort of cost-benefit for them, for business -- the business world for contributing to Mitt Romney over Barack Obama is pretty stark. I mean, they -- all -- most of their agenda, in terms of less regulation and keeping taxes low or even cutting them from where they are now, are things that Mitt Romney is campaigning on. And he just gave a speech to the Business Roundtable this week, and he said, you know, a lot of people -- the government views you now as the bad guys, but I think you're the good guys. And I want to help you. I want to see you succeed.
DAVISAnd that's his whole agenda, and he's been very plain about that. And President Obama has talked about, well, he's not anti-business. I'm not against you. I want everyone to do well. But he's also talking a lot about everyone has to sacrifice. We have to band together. And, you know, his whole agenda for lowering the deficit, for dealing with the economy includes raising taxes for the wealthiest, which is not something that wealthy donors are really going to want to see. So there's a clear sort of quid pro quo there that's not really there on the Democratic side...
PAGELook where the money's coming from.
BENDAVIDAnd I think we shouldn't forget about the congressional races 'cause I actually think the bigger impact, in some ways, will be there because there's maybe a dozen presidential swing states. And both sides will probably have money to make their case in those places. But there's a lot of congressional races. And, you know, a few hundred thousand here, a few hundred thousand there, you can really affect some fairly obscure congressional races and make a big difference in the fall.
REHMYou know, President Obama had what Chris Cillizza called a terrible, horrible, no good, very bad week last week as he talked about the private sector doing just fine, and then had to come out that very afternoon and take that back. Clarence.
PAGEWell, yeah, I think he definitely regrets that -- the use of just fine because it's -- never give your opponents an easy sound bite, and that was what happened there. It was out of context. But the way the public mood is right now and the way the economy is doing, a president needs to show that he -- or someday she -- is engaged in the misery that the American people are feeling right now. Even in the swing states that are doing better than average, as far as employment goes right now, people are still nervous.
PAGEThey're concerned. They want to know that the president shares that concern. And the point he was trying to make was that the private sector was doing better than the public sector. That's where the jobs numbers have really -- that's been a real drag on the jobs numbers. With all the cutbacks in public spending, we've lost a lot of public jobs.
REHMClarence Page of the Chicago Tribune. And you're listening to "The Diane Rehm Show." So both President Obama and candidate Romney spoke yesterday in Ohio. The unemployment rate in Ohio has gone below that of the national picture. How did that affect the reception that both of them got, Naftali?
BENDAVIDWell, I mean, they both got pretty good receptions in, you know, carefully chosen audiences. I mean, Ohio, I think, can't be underestimated as a crucial state, particularly for the Republicans. It's hard to see how Republicans win without it. And when President Obama went to speak there to try to reframe the economic debate, Mitt Romney decided he was going to go there, too, and speak a little bit before President Obama. A lot of Democrats have been complaining. This is what happens when an incumbent starts to stumble.
BENDAVIDThey've been complaining that he hasn't been framing his message very well and that he's done fine in sort of talking about President Bush, and even talking about what he's done, not enough about -- talking about what he's going to do should he win a second term. And I think if you watch that speech, there was a real careful attempt to do that, to talk about a vision for the second term. I don't know if it succeeded, but it was clearly -- clear that he was making that attempt.
REHMWhat do you think, Julie?
DAVISWell, I think it was clear that he was trying to sort of shift the narrative. There -- some Democratic strategists argued in a memo earlier this week that the narrative was going in the wrong direction because it was more the economy is really doing OK. Some people are starting to get jobs again. They said that's a fool's errand. You're never going to win an election with that kind of narrative. You have to shift it around.
DAVISSo this was President Obama's attempt to do that. Now he did get criticized by a lot of people in -- obviously among Republicans, but also some Democrats, that he didn't bring any new ideas to the table. He didn't really -- he did sketch out a vision for what -- how the second term would look, but it wasn't anything that anyone hadn't heard before.
DAVISAnd Romney really went at him hard, both the day before and a few moments before President Obama spoke, saying, you know, the proof is in the pudding, the words sound good, but we've had three-and-a-half years of this, and it's clearly, you know, not going the way it should be going. And he is really trying hard to make this a referendum on President Obama. And at this point in the campaign, it's difficult for Obama to push back against that.
PAGERight. And while Gov. Romney is trying to make this a referendum on President Obama, President Obama is trying to make this a choice, and used that word several times in his speech, that you've got a choice right now between me and my challenger, former Massachusetts Gov. Romney. And that is what the real issue is that he wants to put up before the voters.
PAGEI believe Joe Biden had the line that he's running against the alternative, not the almighty. That's -- the more President Obama stresses that, the better off he will be as far as this campaign is concerned while we still got this shaky economy.
REHMGo ahead, Julie.
DAVISBut it's also striking how different this speech was from the kinds of speeches we heard from President Obama when he was running. I mean, he talked about bringing people together and we all have to band together and, you know, break down these partisan walls, and we're going to change things. And this speech, as Clarence said, it really was you have a choice. Mitt Romney wants to do this. This is going to hurt you.
DAVISI want to do that. This is going to help you. There's no gray area in between to be bridged. I mean, this is -- for right now, anyway -- this is not a very bipartisan tone. It's not about being inclusive. It's all about black and white and, you know, the differences between the two parties. And that's a real change...
REHMSo there -- looks as though there's nothing that's going to be done before the election. Is that right, Naftali?
BENDAVIDI think that probably is right. It's very difficult to get things done before an election because both parties, they're afraid of compromising.
BENDAVIDThey're afraid of looking weak. So I think that barring some big event like a crash in the markets or something, I think it's unlikely that action will be taken. I mean, President Obama does face this legitimate tension because, on the one hand, he wants to say, I've made things better. He can't run saying, things are just as bad as when I took over.
BENDAVIDOn the other hand, if people don't feel like things are better, then that comes off as sort of this false cheeriness, and that's not good either. So he's trying to walk this line and say things have gotten better, but we still have a lot of work to do. But it's a very hard balance to find.
PAGEHe's doing what President Clinton said back in '96: Let me go back and finish the job. The job has been blocked, and I can do it.
REHMClarence Page of the Chicago Tribune, Naftali Bendavid of The Wall Street Journal, Julie Hirschfeld Davis of Bloomberg News.
REHMAnd welcome back. We'll go right to the phones. Let's go to Columbia, Mo. Good morning, Douglas.
DOUGLASGood morning. My comment today is about the constant analysis, mostly statistical, between the two presidential candidates and who, I guess, is going to win. On Monday, it seems Romney will win, and then Wednesday, it's Obama. And I just think we would do well to hold off on this analysis until we've had something like a debate between the two.
REHMI don't think you've heard any of that this morning, have you?
DOUGLASNo, I haven't.
REHMI'm glad to hear you say that. Sure, I think people are going to speculate as to what this decision means or that decision, but you got to talk about the reality that's out there that there are two candidates, each trying to win the hearts and minds of people and how they're doing it. Let's go to Jerry in Adena, Ohio. Good morning. You're on the air.
JERRYGood morning, Diane. Thank you for taking my call.
JERRYI need to make a point that since Obama has taken the presidency, the -- McConnell, Boehner, Ryan, these people -- and this should be stated, before any discussions about jobs and the economy and all this, that these people stated from the very beginning that they're going to do everything and anything they can to make Obama a one-term presidency and have -- even when Obama has introduced Republican ideas, they've refused to cooperate.
JERRYWe have unemployment that's out of whack because these people do not want to cooperate in any way, shape or form because their point is we're going to make Obama a one-term president. This should be pointed out at any media source anywhere at any time when the discussion starts. They should be presented as the first statement in any discussion.
REHMThanks for calling. Naftali.
BENDAVIDWell, it's true that a lot of Democrats feel that way, that Republicans, from the first day, they headed out for President Obama. You know, Mitch McConnell, early on, made a statement about that defeating the president would be a top priority. Rush Limbaugh said he hopes he fails. And so a lot of Democrats do feel that way. Republicans, of course, say, you know, that's not true. They wanted to work with him. One thing that I -- President Obama actually has taken to saying their whole message is to blame me for everything rather than put forth everything positive.
BENDAVIDAnd we've been talking about President Obama's messaging being criticized, but a lot of Republicans are starting to say that Mitt Romney needs more of a positive vision, that just like Obama can't run only on the basis of criticizing Romney, Romney can't run only on the basis of not being President Obama. So you're seeing a little bit more of a push on the Republican side for a positive agenda and vision in that way.
REHMAll right. To Indianapolis, good morning, Zachary.
ZACHARYHow are you doing? Thanks for having me.
ZACHARYI just want to talk about, you know, what I think needs to happen for the economy to get going. I'm someone who left a career as a corporate risk manager to direct and teach in the daily risk management program here at Butler University. And I'm someone who's -- you know, who's fared fairly well in this economy, and I have similar friends who have fared well and are doing similarly entrepreneurial-type things.
ZACHARYAnd, right now, the two places that we needed to deploy our money is, you know, one, $40,000 to get the anchor of our previous house off our back, and, two, I don't know if folks realize this, but student loan debt is un-refinanceable. You know, if you graduated in the dot com era, your student loan rate carries a 7.75 percent interest rate. So I considered the European stock market table, or I can deploy my money on a guaranteed 7.75 percent return to get rid of my student loans.
ZACHARYAnd it's only just now that my family and I have been able to clear that student loan debt, to sell that house in Ohio. And to begin to participate in a positive way in the economy is buying a new house, buying a new bedroom suite. And my other friends are similarly deploying their capital in that way, and we just need time for that process to happen for those anchors to come off our backs and get the engine going again. And I think that's what you're seeing.
REHMAll right. Julie.
DAVISWell, the caller makes a good point, and it sounds like he's one of the people who may not need additional help from the government to do all of those things. But the fact is that those are two areas where President Obama has proposed to kind of ramp up the assistance to people who are struggling in the economy and can't deal with their student loan debt, can't deal with the fact that they're underwater on their homes.
DAVISAnd he's -- on the housing front, it's been difficult because none of the programs that he has introduced have actually worked in the way that the administration had hoped they would to really release -- relieve some of that pressure. On the student loan side, he's proposing some new help, and I think he has a lot of support on that from middle-class and lower-class people who really need that assistance.
DAVISMitt Romney, on the other hand, has come out against both of those things. He has basically said that, you know, the housing market has to kind of work itself out. It doesn't really make sense to try to throw more money -- government money certainly at the problem and try to intercede.
DAVISAnd on the student loan front, while he is joining President Obama in trying to keep the interest rates low, because they were slated actually to double this summer, he and Republicans sort of banded together to say, OK, you know, we'll let that happen. But they're not in favor of any additional help, and, in fact, they say that the government shouldn't be in the business of helping out on student loans at all. So this is another example of the contrast you're seeing.
BENDAVIDOne of the interesting things in that Fed report we talked about earlier is now people seem to have more debt in education loans than they do in credit card loans. It's just kind of an amazing figure.
BENDAVIDBut there's this classic thing going on in Congress regarding student loan issue where both parties agree that student loan interest rates should be kept low, but they're battling so hard on how to pay for that that they can't come to an agreement. So those lower rates could expire at the end of this month, not because nobody wants it -- everybody wants it -- but because they can't agree on how to pay for it.
PAGEAnd they also haven't talked about some kind of long-range solution on the student loan problem. This bubble in the student loan market has been building for years. And, as President Obama has said repeatedly, and everybody else as well for that matter, if you want to move up from the working class or low income up to the middle class, you've got to have some schooling beyond high school, whether it's college or a training program or something.
REHMAnd yet how do you pay for it?
PAGEHow do you pay for it? Exactly. And this short-term solution doesn't do anything about capping the dramatic rise in college costs.
PAGEThis is -- my own college's tuition has gone up 10 times...
PAGE...since the time I was in school. And I'm not that old.
REHMTo Winter Haven, Fla. Good morning, Roger.
ROGERGood morning, Diane. I wanted to ask, what is the media's real job? Because, like, when -- I hear surrogates going on, you know, to talk for their candidates and everything, and they are either usually sometimes distorting the truth or just flat out lying about something. And the moderator or whoever is -- in, you know, show they're on just seems to just let it go. For instance, I've heard over and over about the Democrats' budget. We already know that they have a Reconciliation Act, and that's part of their budget or what not.
ROGERAnd then so, I guess, they don't need a formal one. But, you know, it -- they keep going out saying the same thing, and no one says anything. And then the last thing is on the Keystone pipeline. None of that oil's is supposed to actually be retained in the U.S. Isn't it all supposed to go somewhere else? So when the Republicans are talking about how we're going to have to depend on foreign oil and stuff like that, we still are going to have to if the Keystone pipeline was approved.
REHMAll right. Naftali.
BENDAVIDWell, I mean, all I can say is we wrestle with this all the time, and one person's lie is somebody else's -- if not true, then maybe, you know, slight exaggeration or something. And, as you know, different parts of the media play different roles, and you do try to call people on blatant fall sides. But at the same time, you can't really become a partisan, and so these things are difficult. I mean, the budget thing that the caller mentioned is a perfect example.
BENDAVIDI mean, the Senate Democrats don't have an official budget, and they say they have something that's pretty much the same thing, which is the budget agreement that was reached last August. So nobody is, like, 100 percent demonstrably wrong on that. And so when somebody says it, it's hard to know how to respond, and you sort of do your best.
REHMAll right. And to Granite City, Ill. Hi there, Ed.
EDI have a question for the panel about a new book that has come out written by Norman Ornstein and Thomas Mann. They named it "It's Even Worse Than It Looks." And if you're probably familiar with it, in fact, Norman Ornstein, I think, was on "The Diane Rehm Show" in the past.
REHMThat's right. The two of them were on together.
EDOh, OK. The theory is that the Republican Party has moved so far to the right and they're so obstructionist and so ideological and unwilling to compromise that they are almost entirely the fault of all the back up and obstructions that occurs in our government today, rather than it being a bipartisan kind of thing where the Democrats are "equally at fault."
PAGEYes. So -- well, I, too, have written about the book. And as they point out, we go through these cycles in our history. Right now, we are at a time of extraordinary, what -- with deadlocks and extraordinary amount of ideological disruption within the Republican Party, as well as between the two parties. And it has gotten in the way of our ability to get things done. And especially right now, in an election year, we're not likely to see much happen as was mentioned before, except, perhaps, executive actions out of the White House.
PAGEHowever, you know, what happens after this election? That's what the real build up is here. What happens after this election? Which way does the balance of power go? And as -- even now, we can see among Republicans a new debate breaking out over, do we really want to get rid of all of Obamacare because most of its provisions are quite popular?
PAGEAnd so a number of people -- even Congressman Allen West in Florida has actually brought up the possibility of actually raising revenues through something that sounds a lot like taxation, and this has caused a hubbub. But this -- it's a difference between being a challenger, being an insurgent and actually governing and having to actually to solve real problems. So we can only hope that this gets better after November.
REHMHere's an email from Bobby in Ellicott City, Md., who says, "The more I learn about our political process, the sadder I get. After all, how can struggling middle-class me compete with Sheldon Adelson's millions?" Julie?
DAVISWell, I mean, it's -- that's one of the realities of campaign money. It's just -- it's gotten so huge.
REHMHow is that campaign money going to affect this election? Let's be specific about this.
DAVISWell, I think we're going to see a lot of ads, a lot of efforts on both the part of Romney's supporters and Obama supporters to kind of frame the other guy and -- in a negative light in many cases. Well, see, you know, Mitt Romney has started to run some positive ads, but he is now out with a very negative spot about President Obama's doing fine gaffe. And I think we're going to see more and more of that, a lot of attacks on Romney's record of Bain, a lot of attacks on Obama's economic record.
DAVISThe thing that is sort of an unknown but a lot of Republican strategists expect and fear is that a lot of this money is, through the super PACs in particular, is uncontrollable for them because, by law, the campaign and the party cannot coordinate with these super PACs.
REHMBut let's be realistic. Surely, the people who are running these super PACs have a knowledge of what those candidates would say. Is that unfair, Naftali?
BENDAVIDNo. I mean, it's not unfair at all. And a lot of people feel, like this idea of the lack of coordination is sort of, you know, more...
BENDAVIDYeah. It's more performed than it is in reality because they know what the campaign is trying to do. And it also gives the campaign deniability if their super PAC does something that's particularly harsh or nasty. I mean, I do think that there is sometimes, you know, they go off the reservation a little bit and in a way that the campaign can't control. But I -- but that downside is probably dwarfed by the benefit that these groups bring to whatever campaign they're supporting.
PAGEThey can embarrass campaigns, too, as we saw recently with the outside money that was considering promoting the Rev. Wright controversy again. You know, this -- there was a lot of blowback and backlash from people saying, oh, no, that again? So there is a wildcard element to these super PACs out there.
REHMAnd you're listening to "The Diane Rehm Show." To Whittier, Calif. Hi, Gary. Thanks for waiting.
GARYHi, Diane. You're welcome, and I love the show.
GARYI would like to comment on your program the other day about voter suppression, even though you're too polite to use those terms I think, and also that the hidden agenda of the Republican Party since 1980, in my opinion, you never hear a Republican politician use the term starve the beast. And just like an earlier caller said, I wish, every time we had a political discussion, we could discuss the issue of how -- I'm losing my train of thought because I'm nervous here.
GARYAny case, the whole concept to starve the beast and constantly putting our financial health as a nation in peril by cutting taxes and then using the deficit as an excuse to cut social programs. And I'm very upset about the way that our country is being governed with a hidden agenda by the Republican Party. And this whole voter suppression that you'd addressed the other day, it seems to me it's treasonous, and I'm so upset about it. So (unintelligible).
REHMWell, just hold your concerns and keep a good watch out, and we'll all keep talking about efforts to some people from voting and encourage other people. I think cities, counties are also watching out for those problems. And let's see, I think we've got time for one last caller from Greensboro, N.C. Good morning, Jesse.
JESSEGood morning, Diane. Thank you for having me on.
JESSEHey, I just want to have a little quick comment. I know we've seen a lot of numbers about the unemployment rate. And, to me, it's not about so much the percentage of unemployment as the income of the folks that are employed. I think we've seen over the last 10 years and the 10 years before that, we saw, you know, a really low unemployment, 5, 6, 7 percent at the most during the Clinton era. But those jobs really weren't worth having, and we're starting to find out now that they really weren't -- they weren't an income you could raise an entire family on. And now, those jobs are the only jobs we have left.
JESSESo, you know, we talk about unemployment. We talk about the problems with, you know, student debt, and we talk about, you know, some of these other problems. But the main problem still remains that we have the same issue we've had for the last 30 years, which is we don't build anything in America.
PAGEWell, unemployment does vary according to your income level, the kind of job you're doing. The less education you have, the more likely you are to be unemployed right now. And that has been the kind of movement we've seen since the 1950s as we have gotten this widening income gap. This is what the whole discussion is about. And what do we do about that? We need more skilled workers. They have a better employment rate. We need better educational opportunities. But until we can get that wonderful utopian dream, right now, we're seeing a wider and wider gap.
REHMQuickly, Naftali, how has Ohio managed to bring its unemployment rate down? So far, you had the mayor of Columbus, Ohio, saying they dropped their unemployment rate from 9.3 percent in January of 2010, 6.5 percent now.
BENDAVIDYeah, it is kind of amazing how much lower it is, especially since it's part of the old industrial heartland, and part of that is they have been able to attract manufacturing. President Obama would say that it has to do in part with the auto bailout that he supported and Mitt Romney opposed. But in any case, they've been able to bring manufacturing back to some degree.
REHMNaftali Bendavid of The Wall Street Journal, Julie Hirschfield Davis of Bloomberg News, Clarence Page of the Chicago Tribune. Have a great weekend everybody.
PAGEYou too, Diane.
REHMThank you. And thanks for listening. I'm Diane Rehm.
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