tv Political Capital With Al Hunt Bloomberg January 11, 2014 12:00am-12:31am 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. >> let's talk about that banks. that is up substantially from 2008. i know you don't like that. 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. >> if any bank failed now, there is no question the taxpayers -- >> 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 the too big to fail problem solved? i got mixed answers.
dodd frank, if it was 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. you are a huge supporter of janet yellen. what you think she will do as far as big bank regulation that her predecessor did not do? >> one of the tools at her disposal is ordering capital reserve requirements. a second part related to this is the bigger the bank and the more risk it poses to the system, it imposes 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. balancing the kind of risk -- >> you expect that yellen will be more likely to do that than bernanke was? >> let me ask -- let me put it this way. i asked about it in the hearing. i asked about the importance of the regulatory role. yellen is making commitments in the direction. i think she understands the problem. she knows with the tools are. >> that makes you hopeful? >> i'm more hopeful. i will tell you why. janet yellen is data-driven. look at the numbers. the big banks 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's lack of 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 that is such a great deal 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. >> speaking of settlements, jpmorgan has now settled for i think $17 billion on penalties. is jpmorgan a rogue bank? should jamie dimon be replaced? >> i come from a background of bankers. bankruptcy is partly about families that have hit hard times but it is also about , corporations, big corporations. what happens when they hit a hard spell?
when they get reorganized in new money comes into financial situations, the are a lot of conditions that are put on that. among the conditions are that there have 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. >> the administration plans to name stanley fischer as a vice chairman of the fed reserve. he is a distinguished academic, head of the bank of israel. 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, a 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. the fed does its part. right now the fed has limited
tools with monetary policy. it keeps playing and working with the one tool. >> you like yellen. >> i want to be hopeful. >> but you are not sure. >> i am not sure. >> what grade would professor warren give ben bernanke? >> it is a mixed grade for me. ben bernanke did a lot to stabilize the market, but he kept the focus on the largest financial institutions and much less what was happening at a family level. the fed's role has limited tools. in dealing with that crisis, the fed has a responsibility and -- on regulation. under dodd frank, it has missed
its deadlines massively. the rules have been complex and difficult to follow. it is very uneven. there is then -- and there have been cases where ben bernanke did a good job. 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. >> that is your byword for today. 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 -- 74,000 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. every time i tell you where the economy is about to take off, we get something like this.
>> bring it back. >> right. a lifetime employment. it was disappointing. there was some impact from the bad weather. we had bad weather a couple of weeks ago. remember, it was also bad in december. that depressed the hiring, in construction particularly. taking that into account, it was a bad month. >> overall, 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. to me the bad first. -- tell me the bad first. >> most of the numbers have been on the upside. consumption has been picking up. especially among the well-off. dollars -- trillion $8 trillion worth of household wealth. they are starting to spend more on capital investment.
overseas it is looking better. the numbers have been looking good. that's why this jobs report was disappointing. people were hoping that we would get this escape velocity. >> suddenly the velocity has escape. >> 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. her expertise is in the international side.
>> does the white house think the economy is their friend now? >> it is the fist bumps in the handholding. >> yeah. >> i think they can point to trajectories of being on the right track but 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, i think they will stick on the $10 trillion reduction in the next meeting. >> julianna, you mentioned the state of the union. it is about -- it is in about two and a half week. 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.
the president will be pushing for an increase in the minimum wage. it does not look like a unemployment insurance is going to be extended but that will be something they 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 state of 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. he just trashes the white house staff. >> not really what you want from a former cabinet member. >> would you think all the them
the most? -- what do you think of bother them the most? 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 does reinforce what has been reported out of this white house. >> that is the bad news. his case is pretty week that biden has been wrong and everything. he has been right on a lot of things. >> 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 be higher up in consideration.
phil mattingly is here to talk about chris christie and the george washington bridge in the national limelight. we can agree this was a terrible thing that happened and governor christie's news conference was a tour de force. we don't really know what happened or what else there is. >> the investigation this is opened up. does anyone expect federal charges to be brought here? >> lemmie 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. >> some people think it is a caricature of chris christie that he is a bully. 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 under diet -- it underlines the idea that chris christie's administration did 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. nobody knows this better than chris christie, the 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. >> people put out these statements that, 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. al it is early. , it is very early. they are ready to talk about their support again? who knows what will come out. >> with phil's cavaet, you got hit a great 2012. could this be lethal to his chances? >> lethal is a strong word. i think it will complicate things. can he go forward in his usual
style? the donor base might be hesitant to jump in with both feet because of this. >> not for ethical reasons, but for winning. >> i'm not a bully is better than i am not a crook. it is not a good thing to say, especially for someone where it has been documented that he has been bullying and vindictive to people who have not voted for him. he was so one curious about what happened. even after it was not a traffic study. even after two of his allies are gone for the poor to theory -- port authority. he is not. about what happened. >> your take? >> christie kemper train himself -- chris christie is 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. e-mail seem to suggest that this was maybe not the first time something like this has happened. >> let me turn to another controversy. bob gates writes a tell-all book. very critical of joe biden and barack obama's afghanistan policy. is this confessions of a true patriot or just kind of a psychobabble, revenge seeking, what have you? >> 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. he also highlights the thing they did right. it is honestly a book about the kind of unvarnished truth. most people don't like the truth without varnish. >> margaret? >> bob gates is a sterling guy. he had his frustrations. they were largely with presidents who did not give the troops and the pentagon enough credit, or gates enough credit. if you look at everything that is out there 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. thank you all. see you again next week. >> "political capital" is a production of bloomberg television. ♪ >> ok.
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