tv Political Capital With Al Hunt Bloomberg January 12, 2014 1:30pm-2:01pm EST
>> this week on "political capital," senator elizabeth warren. also julianna goldman and richard miller, and views from margaret carlson on chris christie's 2016 chances. we begin the program with senator elizabeth warren. thank you for being here with us. >> good to be here. >> i know you do not like the -- but the administration is not supporting that. what could you do now to reduce this concentration?
>> you have to keep up the pressure from the outside. keep talking about it. we have to remind people that back in 2008 with a big crash came that remember they stood up and said we have got to build these things out because there's too much concentration in the banking industry. they are too big. we cannot let them fail. where are we today? they are bigger today here. government keeps saying the dodd frank rule is in place. i want to be clear -- those are steps in the right direction. yesterday we had a hearing. i put a question to four of them. is it too big to fail problem solved? i got mixed answers.
dodd frank has been fully and vigorously forced. would that solve the too big to the problem by itself? the answers from all four were no. >> part of it is regulation. the fed reserve is the biggest regulator. what do you think janet yellen will do as far as big bank regulation that her predecessor did not do? >> one of the tools at her disposal is ordering capital reserves. a second part related to this is the bigger the bank and the more risk it poses to the system, higher cost on larger financial institutions. so, the fed both independently and through its leadership of all the bank regulators has the
capacity to put more balancing constraints on the largest financial institution. >> the expect that yellen will be more likely to do that than bernanke was? >> i asked about the importance of the regulatory role. yellen is making commitments in the direction. if she sees a problem those with the tools are. >> that makes you hopeful? >> i'm more hopeful. look at the numbers. the big things are getting bigger and they are taking on more risk. our banking industry is becoming less diversified with every single day. we are losing smaller institutions. regional ones are
being lost. we are ending up with these behemoths that radiate risk. >> you care a lot about transparency. you have introduced bills. you're worried about the fed reserve lacking transparency? are you hopeful that will change? >> well, one piece on transparency is a bill that was introduced recently. >> with two of the most unlikely co-sponsors. >> it is a reminder to find the things you agree upon. senator coburn has been out there for a decade fighting for more government transparency. i believe in more transparency. the issue we are focused on in this bill is a settlement when the fed reserve and the banking regulators anywhere in the government makes a settlement as
corporate wrongdoers -- if they think it is a -- for the u.s. taxpayer, we think they ought to make those settlements public. when i say public, i mean put it out there, all the details. >> jpmorgan has now settled for i think $17 billion on penalties. jpmorgan -- is it a rogue bank? should jamie dimon be replaced? >> i come from a background of bankers. bank said been hit by hard times, but it is also about corporations, big corporations. what happens when they hit a hard sell? when they get be organized in
new money comes into financial situations, the are a lot of conditions that are put on their. among the conditions are that there has to be business plans, a showing that the financial institution is not going to keep up its old ways. that often means that the ceo is replaced. >> in this case, the ceo should be replaced? >> the real question is, do you have someone who has shown that they understand there were problems in the past and that they have a different plan going forward? what jpmorgan and other financial institutions have done is they have continued to get bigger and load up more risk. >> do you think that the ceo of j.p. morgan has that understanding? should he be replaced? >> i'm waiting for him to
demonstrate. >> but he hasn't so far? >> not so far. he has had a long time. >> administration plans to name stanley fischer as a vice chairman of the fed reserve. is this a good choice or not? >> i want to be hopeful. this is a hard time right now for the fed reserve. this economy is not recovered the way it should coming out of this recession. what we are seeing is that the fed reserve has limited tools. in a world in which congress is willing to act, and world in which congress is not cutting back on spending or shutting down the government costing the economy millions of dollars, congress is supposed to do its part. right now the fed has limited tools of monetary policy.
it keeps playing and working with the one tool. >> you like yellen. >> i want to be hopeful. >> what grade would professor warren give ben bernanke? >> it is a mixed grade for me. bernanke did a lot to stabilize the market, but he kept the focus on the largest financial institutions in fewer what was happening at a different level. the fed's role has limited tools. in dealing with that crisis, the fed has a responsibility and regulation. under dodd frank, it has missed its deadline massively.
the rules have been complex and difficult to follow. it is very uneven. regulation has not been a place he has concentrated and done with the fed needed to do to help bring it under control. >> you think there'll be a new day with janet yellen? >> i want to be hopeful. >> senator elizabeth warren, thank you for being with us. when we return, we will talk about what is next for president obama and the december jobs report. ♪
>> welcome back. the unemployment rate dropped to 6.7%, but only 74th out and jobs are added. we have julianna goldman and richard miller. tell us what the figures mean. >> gosh, i feel a little bit like charlie brown and lucy where he goes to get the football and she takes it away. we get something like that. >> bring it back. >> right.
a lifetime employment. it was disappointing. we had bad weather a couple of weeks ago. remember it was also bad in december. that depressed the hiring, in construction particularly. >> over all, when you look at the economy, there are a lot of good signs and bad signs. it is not just one month, but a little bit of conflict. >> most of the numbers have been on the upside. consumption has been picking up. especially among the well-off. they have got a trillion dollars worth of household wealth.
they are starting to spend more on capital investment. overseas it is looking better. the numbers have been looking good. people were hoping that we would get this escape velocity. >> is the velocity last week. >> rocket. >> the announcement on friday was that they would appoint stanley fischer as the vice chair of the fed. what does this mean for the fed? >> he is a real heavyweight. >> bernanke is a professor. he was a crisis fighter. the other two people nominated, one was renominated that is a republican. he has been very supportive of bernanke. there are bringing over another from the treasury.
>> to the white house think the economy is fine now? >> it is the fist bumps in the handholding. >> yeah. >> this number was disappointing. it put pressure on the president as he looks at some of the economic proposals and this continued fight over extending unemployment benefits. >> does this threaten the fed's tapering effort? >> i do not think so. given the totality we have seen, the $10 trillion reduction in the next meeting. >> julianna, you mentioned the state of the union. any sense of what a major theme or themes will be? >> one thing the white house has been rolling out is the emphasis on income inequality.
the haves have been doing well over the past years and the have-nots have not. that will be something they will push for. white house officials say it will be a mix of some new and some old proposals. what you will see is the white house leading up to the state of the union and really empathizing the accomplishments from last year's the union. look for them to put a heavy emphasis on the volcker rule. >> one thing they will mention is bob gates. >> you don't say. >> he has written a book. he says joe biden has been wrong on everything. obama does not believe in his own afghanistan policy. >> not really what you want from a former cabinet member.
i think they feel surprised or somewhat betrayed. for the first time this week, they allow cameras into the president's regular lunch with the vice president. is it a surprise that this was a politically motivated white house? not so much. is it surprising that it is insular white house? not so much. it leans toward what has been reported. >> that is the white house. you can agree or disagree. >> yeah. one of the lasting damages is it does reinforce the insularity of bringing in rivals from the outside now. there are trust issues that will
>> welcome back. phil mattingly is here to talk about chris christie and the george washington bridge in the national limelight. we came agreed this was a terrible thing that happened and governor was christie's news conference was a tour de force. what else is there? >> we are still turning figure out what the motivation was. again, i think the big issue is the investigation of what this has opened up to. >> let me get to the federal prosecutor in a second. there is the question of whether this is -- i will get to the federal budget any second. there is a question of whether
this is -- they do not appear to be virgins. >> i think your point, what you saw in the e-mails looks like it was from people who have done this before and took some glee in the process of doing this. it underlines they did that chris christie access this on a regular basis. >> i'm not sure what the crime is here, but no one likes to have a prosecutor looking at them. the original whitewater investigation turned out to be something quite different. >> that's right. this christie is a former attorney. you open the door into this, it is an enormous suck on manpower and resources. it also was the door to people finding things in your administration you do not want them to. chris christie made it clear that he does not know what everyone in his administration is doing. he oversees a lot of people.
the second that he opened that door, any number of things can pop out that could be incredibly damaging. >> boy, we were all with chris. >> they are gamblers to begin with. they very much wanted him in 2012. it is helpful to him on the perspective of how well his conference went. there will willing to jump in as all. it is early. it is very early. they are ready to talk about their support in? >> with phil's cavaet, you got hit a great 2012. could this be lethal to his chances? >> lethal is a strong word. can you go forward in his usual style?
he might be hesitant to jump in with both feet because of this. >> for winning? >> i'm not a bully is better than i am not a crook. it has been documented that he has been bullying and vindictive to people who have not voted for him. he was uncurious a what happened. even after it was not a traffic study. he is not. about what happened. >> your take? >> christie can portray himself as someone who trusted his subordinates and has a loyal team and they failed him and he has gotten rid of those people. however, as with whitewater and
other investigations, you see them -- i expect if he went out there and said, "i did not know anything about this until this morning," that is likely to be something that cannot be proved. i'm sure they are scouring the records to find out. we do not know what else is lying under the murk. it could be something entirely different. the e-mail seems to suggest -- >> bob gates writes a tell-all book. very critical of joe biden and barack obama's afghanistan policy. >> i think bob gates is a man of integrity. i think he said things that he believed. it wasn't nearly as critical as it is portrayed in the media. he tells the truth. he says these are areas where they fell, but he highlighted
areas in which george bush and barack obama did the right thing. it is honestly a book about the kind of unvarnished truth. >> margaret? >> bob gates is a sterling guy. he had his frustrations. there were some presidents who did not give the troops and the pentagon enough credit, or gates enough credit. i would take what he said about obama. he is courageous for going after osama bin laden and took action against advice of political advisers. >> i look forward to reading it and hearing from you. thank you. see you again next week. >> "political capital" is a production of bloomberg television. ♪
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