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Keith talks to Paul Krugman about the Republicans latest bit of hypocrisy on financial reform.

McConnell Slams Financial Reform Bill After Meeting With Hedge Fund Managers And Other Wall Street Elites:

This morning, Senate Minority Leader Mitch McConnell (R-KY) declared his opposition to the financial reform bill before the Senate. McConnell claimed to have principled objections to the bill, saying that it “institutionalizes” bailouts of Wall Street and that it would give the Federal Reserve “enhanced emergency lending authority that is far too open to abuse.” What McConnell did not mention was that, last week, he traveled alongside National Republican Senatorial Committee chairman Sen. John Cornyn (TX) to New York City for a private meeting with elite hedge fund managers and other Wall Street executives. The purpose of the meeting between the top Republicans and the financial executives was to enlist “Wall Street’s help” in funding Republican campaigns in the fall and killing any tough financial reform.

[...]

Separately, House Republican Conference Chairman Mike Pence (R-IN) met with hedge fund managers this morning and told them that “Democrats’ solution for financial reform consists of two words: government control.” He added, “America will continue to be the home of freedom and the free market; the place where liberty prevails.”

Read on...

Krugman wrote about the need to reform the financial system in this short post on his blog at the New York Times -- Bank Failure: Two Brief Notes:

1. Some commenters on this blog have argued that lots of small banks failed in Georgia, without systemic consequences. But these banks weren’t allowed to collapse; they were seized by the FDIC — in effect, nationalized — and their depositors were protected. That is, in effect they were rescued, although the stockholders were cleaned out.

2. Other commenters say that lessons from the 1930s are no longer relevant, because now we have deposit insurance. Um, shadow banking? That’s the point I keep trying to make: what happened to us in 2007-8 was that a large banking system had grown up, relying on repo and other forms of short-term borrowing rather than deposits, that wasn’t covered by New Deal-era protections and regulation. So what we had was the 21st-century version of a bank run; not crowds of people lining up at bank doors, but crowds of investors demanding haircuts on repo, which has the same effect.

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I guess it's asking too much of Fox Business Channel to let us know that their guest and former Labor Secretary Elaine Chao also happens to be married to the Senate Minority Leader Mitch McConnell as she repeats his talking points for him on the current jobs market. As Think Progress noted, she did at least get some push-back from Stuart Varney but at no time during the interview is she asked if her opinion might be biased because of who she is married to.

Although given her background and after being as Jim Hightower put it, the (anti-) Labor Secretary, she'd likely be in lock-step with him even if they weren't married. As a former Bushie who's administration ran the economy off of the cliff and as the current Minority Leader's wife, she's certainly no impartial observer of what's going on now.

Fox Business’ Stuart Varney Shoots Down Former Bush Labor Secretary Elaine Chao’s Negative Jobs Report Spin:

As ThinkProgress noted earlier today, conservatives have sought to rain on Obama’s parade, falsely claiming that the numbers are a “disappointment” because they were “mostly” due to hiring Census workers. On Fox Business today, former Bush labor secretary Elaine Chao attempted to spin the numbers negatively. But host Stuart Varney, who has been cynical about the administration’s economic policies, wouldn’t buy her spin, telling her that “this is not a blip up on a one month basis, there is a trend”. Read on...

As Steve Benen noted it seems his first-Friday-of-every-month jobs chart got the attention of Rachel Maddow. As Think Progress pointed out in their post, it appears to have gotten the attention of Speaker Pelosi as well.

Contrary to Chao's talking points, this does look like a step in the right direction to me as well and more than just a one month "uptick" even though as all of us know, things are still not great on the jobs front. I wonder what this trend would have looked like if the stimulus plan wasn't watered down with Republican tax cuts that Paul Krugman warned against back in January of '09?

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

Let’s hope I’ve got this wrong.

Sadly it looks like he got it right although given the Republicans capacity to lie no matter what the facts are even if the administration had listened to Krugman and the numbers were better, they'd still be saying the stimulus didn't work. Transcript below the fold.

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Good grief. Peggy Noonan and George Will just can't quit repeating the lie that the poor little old Republicans were shut out of the debate on the health care bill. Their latest spin on it is that if the Democrats had just supported the Bennett-Wyden bill, the Republicans would have voted with the Democrats to get that bill passed.

Yeah right. Krugman thankfully throws some cold water on their nonsense. What Paul Krugman failed to note and should have pointed out to Peggy Noonan if given the chance was that Mitch McConnell never had any intention of working with the Democrats before Obama even took office. I'm sure Noonan is more than well aware of the Republicans planned obstruction, but that's not going to stop her from feigning outrage and clutching her pearls on these bobble head shows.

TAPPER: George and Peggy, let me ask you a question. One of your fellow pundits, David Frum was summarily dismissed from his position at the American Enterprise Institute. Why he was, we're not going to get into, but it occurred after he wrote a column that I want to ask you about. He said that the passage of this bill was actually a waterloo for Republicans. He wrote, "No illusions please. This bill will not be repealed even if Republicans score a 1994 style landslide in November. How many votes could we muster to reopen this donut hole and charge seniors more for prescription drugs? How many votes to re-allow insurers to rescind policies when they discover a pre-existing condition? How many votes to banish 25 year olds from their parents insurance coverage? We followed the most radical voices in the party and the movement and they lad us to abject and irreversible defeat."

Peggy, did Republicans squander an opportunity here? Whether or not you look at short-term gains that could happen, this bill is likely not going anywhere. Should Republicans have gotten up to the table and actually tried to contribute ideas?

NOONAN: A lot of Republicans feel they did go to the table and were not so terribly welcomed there. You all know the stories. Olympia Snowe tried it. Paul Ryan tried it. Tom Coburn, Bob Bennett. There are a million names of people.

Bennett had a Bennett-Wyden bill that was so good, had the support of Republicans and Democrats, covered so many people. The administration and the Democratic-controlled Congress just stiffed it.

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During the panel discussion on This Week, George Will claims that Paul Krugman's recent column Reform And Premiums, Explained proves Lamar Alexander's point that insurance premiums will go up that he made during the Health Care Summit. Krugman attempts to explain to him that it's not quite that simple.

If you live in opposite land like Noel Sheppard at Brent Bozell's right wing rag Newsbusters, you shorten the transcript so it doesn't include all of Krugman's response and tell everyone how terribly smart George Will is.

WILL: Now -- second, now, Paul says that, in fact, the Republicans have no ideas. They do, cross-selling across state lines, tort reforms, all those. Just a second, Paul.

Then you say they're telling whoppers. That was your view about Lamar Alexander when he said, for millions of Americans, premiums will go up. You said in the next sentence in your column, I guess you could say he wasn't technically lying, because the Congressional Budget Office says that's true.

KRUGMAN: No, it's not what it says.

(CROSSTALK)

KRUGMAN: Can I explain? This is...

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While discussing the health care bill George Will claims that we're getting richer in the United States and that's one reason health care costs are going to go up. I'd love to know who he's talking about. Maybe his rich buddies because if he's talking about the general population of the United States, just the opposite is true. Sadly no one was allowed to follow up as it looked like Paul Krugman wanted to since the host decided to change the subject right after Cokie Roberts managed to get a few words in.

A Decade With No Income Gains:

The typical American household made less money last year than the typical household made a full decade ago.

To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.

In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s. Read on...

Transcript via ABC News:

WILL: Can I say something that Paul and I might actually agree on?

VARGAS: Sure.

WILL: Twenty years from now, the country is going to be spending a larger portion of its GDP on health care than it is now for three reasons. We're getting older, and as we age, we get more chronic diseases that interact with one another. Second, we're getting richer; we can afford to buy more medicine. And, third, medicine is becoming more competent. Therefore, we're going to spend more on health care.

KRUGMAN: But there's a...

ROBERTS: The other thing is, you know, the health care industry is the biggest employer in most of our cities now. So when -- when the speaker talks about a job creation bill...

VARGAS: A jobs bill, exactly.

ROBERTS: ... it's true.

VARGAS: Let's shift a little bit to Charlie Rangel...

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From Think Progress -- ABC Panelists Criticize Ailes’ Evasion Of Why Fox News Cut Away From Obama-House GOP Conversation:

Guest host Barbara Walters cut off the conversation though, since the show was over. However, discussion on the topic then continued in the green room, even though Ailes wasn’t present. Both Huffington and New York Times columnist Paul Krugman criticized the network for its hypocrisy:

HUFFINGTON: Their framing of the President is that he’s radical, that he’s taking us down a dark, fascist or Bolshevik future — depending on the day. And there he was, rational, charming, and in full command of his facts. So the narrative fell apart and so the cameras stopped showing what was happening.

KRUGMAN: Yeah, I mean it’s — I thought it was actually quite funny except it has real consequences. There you have Roger Ailes, with this powerful, popular news network, whining about how the media are unfair to Republicans. I mean, he is a powerful person in the media — and of course, you know, “Fair and Balanced” is truly Orwellian and we know that. So it’s clear that Fox — I felt like yelling to him, “you can’t handle the truth,” because that was what was actually happening on the Fox coverage.

I wonder where Ailes and Walters were for this after the show segment. And of course George Will decided to defend Ailes and Fox News saying that the media we have now is better than what we had back when there were just three networks to choose from. Not without some push back from Huffington and Krugman. And of course Will feigns ignorance on just how bad Glenn Beck's show is by claiming he never watches it. I highly doubt George Will doesn't actually know just how bad Glenn Beck's show is. That just gives him an easy out to pretend he doesn't.

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Why ABC News thought bringing in the CEO of a rival network as a pundit was a good idea is beyond me but one of the bright spots was getting to watch Paul Krugman call out Ailes to his face. Krugman hits Ailes for Fox's 'deliberate misinformation' on the health care bill and doing their part to make sure that the general public does not know what is in it.

WILL: So I don't think that when a man gets up and gives a speech full of cognitive dissonance, saying Washington is corrupt, Washington is annoying (ph), Washington is tiresome, Washington is dysfunctional, and Washington should have a much bigger role in American life, I think that -- that breeds, you might say, a kind of distrust and cynicism.

WALTERS: (inaudible) slash and burn....

KRUGMAN: If I can just -- you know, what bothers me is not the nasty language. Glenn Beck doesn't, you know, it's not -- what bothers me is the fact that people are not getting informed, that we are going through major debates on crucial policy issues; the public is not learning about them. And you know, you can say, well, they can read the New York Times, which will tell them what they need to know, but you know, most people don't. They don't read it thoroughly. They get -- on this health care thing, I'm a little obsessed with it, because it's a key issue for me. People did not know what was in the plan, and some of that was just poor reporting, some of it was deliberate misinformation. I have here in front of me when President Obama said, you know, why -- he said rhetorically, why aren't we going to do a health care plan like the Europeans have, with a government-run program, and then proceeds to explain whey he's different. On Fox News, what appeared was a clipped quote, "why don't we have a European-style health care plan?" Right, deliberate misinformation.

All of that has contributed to a situation where the public...

AILES: Wait a minute, wait a minute...

KRUGMAN: I can show you the clip, and you can...

(CROSSTALK)

AILES: The American people are not stupid...

KRUGMAN: No, they're not stupid. They are uninformed.

AILES: If you say -- if (inaudible) words are in the Constitution, if the founding fathers managed -- they didn't need 2,000 pages of lawyers to hide things, then tell, then tell...

KRUGMAN: Oh, come on. Legislation always is long.

AILES: ... then tell people it's an emergency that we get it, but it won't go into effect for three years. So you don't have time to read it, you...

(CROSSTALK)

KRUGMAN: People, again, this was a plan that is -- it's actually a Republican plan. It's Mitt Romney's health care plan. People were led to believe that it was socialism. That's -- and that was deliberate. That wasn't just poor reporting.

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Can we get another stimulus package and ignore the Republicans and their tax cuts this time please? From This Week, Paul Krugman agrees with his fellow Nobel laureate, Joseph Stiglitz that there is a good chance that the economy is going to contract in the second half of 2010.

TAPPER: OK, we are getting close to short on time but I do want to ask you a question about the economy for 2010. Your fellow laureate, Joseph Stiglitz has said there's a significant chance the U.S. economy will contract in the second half of 2010. He's calling on the government to prepare a second stimulus. Do you think that's possible?

KRUGMAN: Yes, it's a reasonably high chance. I don't think it's more -- it's less than 50/50 odds, but you know, what we've got right now is a recovery that first of all is not showing up very much in jobs yet. It's being driven by fiscal stimulus which is going to fade out in the second half of next year and by inventory bounce. You know, production was low because companies were running on their inventories. They're stopping doing that so now you've got a bounce in the economy.

But that's also going to run out. So the things we know about are all going to be negative in the second half of next year. Now the financial markets, the last month, the financial markets have gotten really optimistic. You look at things like the term spread on bond rates. They suggest that the financial markets really think there is going to be a much more vigorous recovery. I don't see where it's supposed to come from, so the range is huge here. I would basically go with Joe Stiglitz. I'm really worried about the second half.

From Digby:

Boy I hope he's wrong about this.

[...]

Atrios agrees.

Tim Geithner, on the other hand, is confident that everything's coming up roses. Take your pick.

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Paul Krugman points out the obvious with the attempted airline bomber slipping through the cracks... too much information for anyone to sort through. That's the problem with this data mining they think is such a woderful idea. Sweep everyone in, open possibilities for abuse if the information gets into the wrong hands, and miss the stuff you ought to actually be worried about.

KRUGMAN: I think we do want -- I mean, someone's head ought to roll over this. Something needs to be looked at. But if you read your military history, every major military surprise that ever happened, there were ample warnings. You go back to the record; you find out there was information.

The trouble is, there is so much information. You know, there's 500,000 people on this list we're talking about. Stuff is going to fall through the cracks. Ultimately, you do what you can, but someone who is prepared to die while killing a bunch of civilians, that's going to happen now and then. In fact, we're quite lucky it didn't happen now.

But, you know, I think -- I think we are using a lot of 20/20 hindsight. What was the kind of thing that always happens whenever anything goes wrong.

(CROSSTALK)

DOWD: Well, to me, OK, so the situation now is, what do we do in the aftermath of this?

So what it looks like we usually do is we profile an article of clothing, not the person.

(LAUGHTER)

And so we're reluctant, because of politically correctness, to profile a person, but the shoe bomber happens and now we all have to put our shoes on the conveyer belt for it to go through, and we're not going to profile a person.

This guy's underwear is on fire...

(LAUGHTER)

I'm afraid what we next have to profile...

(CROSSTALK)

(UNKNOWN): Everyone's going to have to wear their underwear on the outside.

(LAUGHTER)

Sadly they may not be that far off the mark with how much worse airline security is going to get now.

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Conservative columnist David Brooks expressed support for a system of health care that is most often demonized by the right wing. "I wouldn't mind a single-payer. I prefer it to what we have now," Brooks told ABC's Jake Tapper Sunday.

Brooks support for single-payer comes late in the health care reform debate. Both houses of Congress have passed reform bills which Brooks says he can't support. "I oppose it. It's a close call for me," said Brooks. "My preferred option is to give consumers choice."

In July, Brooks deflected a question about implementing a single-payer system. "There is no way something that big and complex and dynamic can be run out of Washington," he said.