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From The Cafferty File March 23, 2009. I would like to know when Jack ever asked this about George Bush?

President Obama’s budget could bankrupt the U.S.; so says Republican Judd Gregg. The New Hampshire senator, who was almost a cabinet member, says if we maintain the proposals in the budget over a 10 year period, the country will go bankrupt.

“People will not buy our debt, our dollar will become devalued. It is a very severe situation,” said Gregg, who’s known as one of the top fiscal minds on Capitol Hill, calls the planned spending “almost unconscionable.”

A report by the Congressional Budget Office shows President Obama’s budget would produce $9.3 trillion in deficits over the next decade. That’s more than four times the deficits of President Bush; and it’s $2.3 trillion worse than what the Obama administration had predicted.

And Gregg’s not the only one — Republican Senator Susan Collins, who was one of the few in her party to work with Democrats on the stimulus bill, says the planned deficit spending “poses a threat to the basic health of our economy.” And Democratic Senator Kent Conrad calls the projected deficits “a stunning amount of money,” and says the administration will need to make some adjustments.

But the head of President Obama’s Council of Economic Advisers, Christina Romer, is not backing down from the budget proposals — saying the estimates by the Congressional Budget Office may not be accurate.

Here’s my question to you: Will President Obama’s budget bankrupt the country?

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I don't think Tim Geithner is the right person to fix the mess we're in since he's too close to those on Wall Street that caused the problem to begin with, but how ridiculous is George Will in this clip? Even after the giant mess that the "markets" have created with no regulation, Will is still doing his best job of channeling Ronald Reagan's mantra of let the markets take care of themselves and government can't solve our problems because it is the problem. Whether Geithner can fix the mess or not we sure need regulations put back in place and quickly IMO which will be up to the Congress to get passed. Will does his best to conflate Geithner's troubles with government regulation being bad.

Will: This is a complicated society with trillions of decisions made every day driving this. That's why you have markets rather than bureaucrats to allocate wealth and opportunity.

Reich: The markets failed George. Let's be clear about that. The markets failed.

Will: Just you wait till the government gets at it. If you think that this is a failure, just you wait.

Reich: Well it's already failing. Look at, we have the worst economic conditions we have had. We had a market fundamentalist as President. We had market fundamentalism as the guiding economic philosophy and what happened? We got in this mess George.

Will: Sixty two days ago Mr. Geithner was the indispensable man and never mind his little tax problems, he was indispensable. As de Gaulle said---graveyards are full of indispensable men.

Is Will an indispensable man too? Raise your hands. Geithner... bad. Therefore regulation... bad. Free market... good. Bad man trying to mess up free market...very bad.

To listen to Will is like listening to a man who has been living in a cave and totally cut off from society and all forms of communication these last eight years. The financial sector has already melted down and we're hanging on by a thread, but not in Will's alternate reality. Does he really want to live in a society where the free markets rule everything and the government takes care of nothing? Apparently so. I'd like to see him try to live in a place that actually espouses the virtues he holds so dear.

Need a cop to come to your house??..you're on your own and buy more guns. Want some traffic lights working in your neighborhood??...just call in Blackwater. Want to drive on any of the roads in this country??...pay a toll and hope they don't jack up the prices too high. Want your phone to work??...well the phone company decided that your area isn't profitable enough to keep service there so too bad. Want your lights turned on?...well the electric company decided that a big industry was more profitable than you were to provide service to.

Don't you dare let the government interfere in any of those free markets....right George Will? Heaven forbid who knows what might happen if they did.

(John Amato helped with the post)

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From Fareed Zakaria GPS, Eliot Spitzer weighed in on the regulatory system that is in place overseeing Wall Street, the bonuses that have everyone outraged and what he thinks of the job President Obama is doing so far.

ZAKARIA: Was the regulation -- was the regulatory regime in place strong enough? And I'm thinking particularly of the New York Fed, which was headed by Tim Geithner, of the SEC?

Where do you see the flaw having been over the last few years?

SPITZER: Here's my answer to that. The regulatory system was structurally flawed, but that's not why this happened.

After the last round of scandals -- Enron, et al. -- we passed Sarbanes-Oxley. And we said, aha, we've solved the problem. Now we have another set of scandals.

There are enough laws, enough regulations on the books for smart, aggressive regulators and prosecutors to make all the cases. What was missing was judgment. And you can't legislate judgment. You can't regulate judgment. Either the people who are the regulators will walk into a bank and say "Your leverage is too great. We are going to take actions to pull it back," or "This type of investment is flawed," or they won't. You can't pass a law that says, you must use sound judgment.

Bubbles have been there through history, through over-regulation and under-regulation. This is a question of judgment and of failure of judgment.

When I was attorney general, people said, "Oh, you're using this crazy little statute," the Martin Act in New York, "to bring all these cases." The Martin Act had a simple anti-fraud provision. That's all we used.

The federal government has exponentially more regulatory power than we did. What was lacking was the judgment, the tenacity, the desire to rein in a financial system that was spiraling out of control.

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Steve Kroft visited the set of Reliable Sources to talk about his interview with President Obama on 60 Minutes.

KURTZ: Now, one of the things you asked about that's making some headlines this morning was Vice President Cheney, who was on "STATE OF THE UNION" last Sunday, was asked by John King about Barack Obama's presidency. And Cheney pointed out, the closing of the Guantanamo Bay prison, or the plans to close it, I should say, and said that he believes that President Obama is making America less safe.

You asked Barack Obama about that, and the president said, "How many terrorists have actually been brought to justice under these Cheney philosophy?" Obama said, "It hasn't made us safer. What it has been is great advertisement for anti-American sentiment."

Were you surprised that he went back at Cheney as hard as he did?

KROFT: I guess I was a little bit surprised. I thought there were going to be two responses. I think that either the first response was going to be, "I don't want to talk about Dick Cheney, it's Dick Cheney," or he was going to tee off on him, which he decided to do very, very aggressively. So I was a little surprised.

I'd like to know when Kurtz is going to ask if anyone was surprised that Vice President Cheney "teed off" on President Obama rather than asking if he deserved the same treatment back. Once Cheney opened his mouth as far as I'm concerned, the gloves were off. The President has a right to defend himself against the likes of Cheney, ex-Vice President or not.

Every "news organization" in town used Cheney's interview as an excuse to repeat his right wing talking points as a lead in to question Democrats with for a week or two straight after he gave that sorry excuse for an interview with Mr. Human Events John King. I would have been disappointed had the President not responded the way he did.

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Erin Burnett states the obvious when it comes to one of the reasons that people in this country are pissed off right now which is the huge disparity between the salaries of those at the top and every day working people. My question is why in the hell are she and Tom Brokaw the ones Gregory brings in to discuss the economy on Meet the Press?

MR. GREGORY: It leads me so perfectly to a question about what happened this week. Why was this week a kind of tipping point? Here's the cover of Newsweek magazine. You've got an angry mob with pitchforks and the headline, "The Thinking Man's Guide to Populist Rage." Editor Jon Meacham writes this: "It was, in a way, overdue. Beginning last September, when the financial sector of the economy collapsed and the markets melted down, a resurgence of American populism seemed inevitable. ... And yet the temper of the time, shaped in large measure by Barack Obama's own coolness, remained calm. ... You might think of the period between September 2008 and March 2009, then, as a kind of economic phony war, the term historians use to describe the months that elapsed between Hitler's invasion of Poland in September 1939 to the broader outrake of--outbreak, rather--of hostilities in late April and early May of 1940. In this analogy, the AIG bonuses that were revealed last week are rather like the battle for France--the point after which nothing would be the same."

Your take, Tom, on what happened this week.

MR. BROKAW: Well, I--my take, I think it's understandable. One of the things that I've been saying is that for a year now, for a full year nothing that the American people have been told about the financial condition of this country has proved to be true. And very good people--Jamie Dimon from JPMorgan Chase said last June, after Bear Stearns collapsed, "Well, we think we've seen the worst for Wall Street now. We still have the housing crisis to go."

MR. GREGORY: Mm-hmm.

MR. BROKAW: Well, we hadn't seen the worst from Wall Street. And this AIG bonus thing exploded in everyone's faces. Meanwhile, across the country car dealers are going under as they watch GM get bailouts and GMAC come and clear off their lots of the vehicles that they owe money on. Mom and pop and regional retail stores are closing up or cutting back severely. I know one banker who was dealing with a client who got in some credit card difficulty and, as he said, the day that Citibank got 5 percent money from the government this client, a single mom, had her penalty bumped up 2 points on her credit card late payments. And he said, "How do you explain that?" That would ricochet up and down any Main Street. So there has been this steady building. And I think that not just the administration, but the political culture in Washington has been insufficiently attentive to what's going on on Wall--on Main Street, at the other end of the pipeline. They need to hear from those people, make them feel like they're part of the process and make them understand how we can all go forward and we not just feel your pain, but we hear what you're saying.

MR. GREGORY: And I just feel like, Erin, there's been a, a breaking of contracts. If there was a social contract between American investors and Wall Street, it was, "Look, we don't really get a lot of what you do..."

MR. BROKAW: Yeah, right.

MR. GREGORY: "...but we count on you for the long-term wealth." And all of the sudden that evaporates. And when it comes to government, hey, government's got to be looking out for us, protecting us. That seems not to have happened. It's that loss of faith that I brought up with the leaders in the earlier discussion.

MS. BURNETT: I think you, you put it in a great way when you said it's a breaking of a contract; which does, in a sense, sort of explain why there is such public support for breaking formal legal contracts...

MR. GREGORY: Hm.

MS. BURNETT: ...when people feel they've been so let down, as you're talking about. Because the irony of this is that even though it seems it's about the money when it comes to these bonuses, it really isn't. When you look at the bonuses paid last year, the $18.6 billion number from Wall Street that so shocked people, if you taxed that at the, at the House bill rate, that's only .6 percent of the tax revenue that the United States government took in a year ago. It's an infant--it's incredibly small. So in a sense it really isn't about the money, it's about this broader shift. The average executive in this country of a publicly traded company, not just Wall Street, makes 400 times the average worker. And that has been a dramatic shift over the past two decades. That is something that is causing some of the anger here. In a sense it's been building, and this is the moment where it breaks.

Really Erin? Aren't we the observant one? I don't know about everyone else but in my world where I have to go work one of those things called...you know...a job, and not one surrounded by inside the beltway and Wall Street talking heads, this is not something new. People have actually been pissed off about the over the top executive pay in the United States for a long time. I'm so glad you finally bothered to notice. You finally put enough of them out of their homes and guess what? They're going to start beating down someone's door because on top of being pissed off, they now also have nothing more to lose.

Erin Burnett's been too busy talking about how great it is for a company's stock when they lay a bunch of their workers off or snuggling up to the Wall Street CEO's that got us into this mess to have taken much notice before the villagers were marching with pitchforks in the streets. Now she's going to share her vast wisdom on populist outrage with us.

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President Barack Obama told CBS' Steve Kroft that he "fundamentally disagreed" with former Vice President Dick Cheney's assertion that the new terrorism policies were putting the country at risk.

OBAMA: I fundamentally disagree with Dick Cheney. Not surprisingly. You know, I think that Vice President Cheney has been at the head of a movement whose notion is somehow that we can't reconcile our core values, our constitution, our belief that we don't torture, with our national security interests. I think he's drawing the wrong lesson from history. The facts don't bear him out. I think he is... that attitude, that philosophy has done incredible damage to our image and position in the world. I mean, the fact of the matter is, after all these years, how many convictions actually came out of Guantanamo? How many... how many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney? It hasn't made us safer. What it has been is a great advertisement for anti-American sentiment, which means that there is constant effective recruitment of Arab fighters and Muslim fighters against U.S. interests all around the world.

KROFT: Some of it being organized by a few people who were released from Guantanamo.

OBAMA: Well, there is no doubt that we have not done a particularly effective job in sorting rough who are truly dangerous individuals that we've got to make sure are not a threat to us, who are folks that we just swept up. The whole premise of Guantanamo promoted by Vice President Cheney was that, somehow, the American system of justice was not up to the task of dealing with these terrorists. I fundamentally disagree with that. Now, do these folks deserve miranda rights? Do they deserve to be treated like a shoplifter down the block? Of course not.

KROFT: What do you do with those people?

OBAMA: Well, I think we're going to have to figure out a mechanism to make sure that they are not released and do us harm, but do so in a way that is consistent with both our traditions, sense of due process, international law. But this... this is the legacy that's been left behind and, you know, i'm surprised that the vice president is eager to defend a legacy that was unsustainable. Let's assume that we didn't change these practices. How... how long are we going to go? Are we going to just keep on going until, you know, the entire Muslim world and Arab world despises us? Do we think that's really going to make us safer? I... I don't know a lot of thoughtful thinkers, liberal or conservative, who think that was the right approach.

Who knew that Paul Krugman would become a YouTube darling?

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h/t David

From Face the Nation March 22, 2009.

Congressman Barney Frank (D-Mass.) told CBS News’ Harry Smith on Face The Nation Sunday that the executive branch ought to use its leverage as a majority shareholder in AIG to sue the company for its wrongful use of retention bonuses.

Retention bonuses are to a great extent extortion, Frank argued. “I think there was an element, frankly, with some — not all of them — of almost extortion, where they said, 'We know what you need to know and we will quit if you don’t bribe us,'” Frank said.

He argued that there is a large pool of very talented people who have lost their jobs in the financial crisis and that AIG could replace the bonus recipients (some of whom are responsible for creating the firm's now-toxic assets) rather than bribe them with retention bonuses.

Rough transcript to follow.

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Christine Romer, head of the White House Council of Economic Advisers, told Fox's Chris Wallace that she was confident that the economy would begin to grow again in the next year.

WALLLACE: In 15 seconds, how confident are you that if we sat down here a year from today, and it's a date, that you'll be able to say, you know what, our policies have worked?

ROMER: Incredibly confident. I -- I truly believe that's why we're taking them. We absolutely think that they are going to do the job for the American economy and so I'm happy to see you a year from now.

WALLACE: And that a year from now we'll see the signs.

ROMER: We will -- I feel very confident we'll be seeing the signs that the economy is -- has turned around and is growing again. Of course, it will take time before we're really back to normal, but I think we will absolutely see signs that everything is working.

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The spectacularly stupid and offensive Fox News show Red Eye with host Greg Gutfeld (above) sunk to new depths this week by belittling a neighbor and ally in the so-called war on terrorism. Although Canada opted out of involvement in Iraq, they have been in Afghanistan since 2002. Originally slated to leave in 2009, the Canadian government has extended the Afghan mission to 2011. At least one of the guests claimed he didn't know Canadian forces were in Afghanistan, which is typical of the expertise on the show. Certainly, conservative radio host Monica Crowley wasn't out of place.

An ill-considered and ill-timed bit of idiocy it was too, as yesterday four Canadian soldiers were killed and eight wounded near Kandahar.

Master Cpl. Scott Francis Vernelli (28), Cpl. Tyler Crooks (24), Trooper Jack Bouthillier (20) and Trooper Corey Joseph Hayes (22) were killed Friday in two roadside bomb blasts in Kandahar province. Eight Canadian soldiers were also wounded. (Department of National Defence)

If you have the stomach for it you can view a clip of the aftermath of the explosion, here.