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HAYES: Good evening from Washington. I`m Chris Hayes, sitting in for Lawrence O`Donnell. And welcome to the post we have now seen Barack Obama`s birth certificate era.
Remember when House Speaker John Boehner said this?
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REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: You know, the number one priorities for American people are cutting spending and creating jobs.
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HAYES: That was January 25th, 20 days after he swore into Congress as speaker of the House. Since then, House Republicans have devoted themselves to going after spending. Not the massive defense budget or ongoing wars. They have also gone after Obamacare, the EPA, Planned Parenthood, NPR, FEMA, and on and on and on.
But what about addressing the speaker`s other number one priority, jobs? Which, by the way, according to the latest polling is the most important issue to Americans, along with the economy — more important think that the budget deficit. We learned today that since January, neither Speaker Boehner nor the president nor the Senate nor the Federal Reserve nor really anyone at all has done much to affect the jobs and economic outlooks.
Labor Department reports that last week, 429,000 people for new applications for new unemployment benefits. That`s the highest since late January. Also, today, the Commerce Department reports the growth of the gross domestic product for the first quarter of this year failed to meet estimates, slowing to an annual rate of 1.8 percent. That`s down from 3.1 percent last quarter.
So, it`s no surprise when we hear this poll today. Only 40 percent of Americans approve of how President Obama is handling the economy. That`s the lowest of his presidency. As for John Boehner, we learned that since he took over as speaker, his net approval rating has dropped 12 points to 42 percent.
Not everyone is doing poorly in this economy, mind you. Today, when national gas prices averaged $3.89, Exxon Mobil reported a first quarter profit of $10.7 billion with a B dollars, a 69 percent increase from this time last year. Royal Dutch Shell reported $6.3 billion in profits, a 30 percent increase from last year.
As for the stock market, it`s doing just fine as well — thank you very much. With stock indexes hitting 2011 highs.
So, how do you explain the bifurcated economic reality we continue to face, in which a small set of powerful economic interests are bathing in cash while most of the rest of the country struggles to get by? And what do they mean for President Obama and congressional Republicans?
Joining me now, former Republican congressman and director of the Office of Management and Budget in the Reagan administration, David Stockman. Also, senior political editor for “The Huffington Post” and MSNBC political analyst, Howard Fineman.
Gentlemen, great to have you here.
HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Good to be here.
DAVID STOCKMAN, FORMER REPUBLICAN CONGRESSMAN: Good to be here.
HAYES: I want to start off listening to Ben Bernanke who gave this first-ever Federal Reserve press conference yesterday — big deal. And let`s take a listen to what he said.
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BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Indirectly, of course, to the extent we can help the economy recover, and help job creation proceed, then some of the people who get jobs will be those who have been out of work for a long time. That being said, we don`t have any tools for targeting long- term unemployment specifically. We can just try to make the labor market work better, broadly speaking.
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HAYES: This is in a response to a question, I believe, from “The New York Times” about long-term unemployment.
Mr. Stockman, what is your sense of that answer from Ben Bernanke. If the Fed isn`t going to be the one that gets job growth back and Congress and the White House have sort of left the playing field — then what are we left with?
STOCKMAN: Well, first, let me say, I thought that answer was pathetic, lame. It shows that the Fed chairman doesn`t have a clue as to why our economy has been failing, not just for the last few months of non- recovery but for the last 10 years.
And the reason it`s failed, and the evidence is clear — last month, we had 130.7 million payroll jobs. And if you check the record, you`ll see we also have that same number in November 1999. So, for 12 years, several business cycles, serial bubbles, the Fed taking the economy up and down, we have gone nowhere. We have not created one net job. And if you look at the composition, it`s even worse, because we`ve lost about 10 percent of our middle class jobs.
Now, I blame the Fed for the dire condition of the U.S. economy, because it`s driven the interest rate to zero. It`s offered free money to Wall Street over and over and over, a massive invitation to speculate. And that`s exactly what we have going again, a massive speculation with free money from the Fed, and everything from cotton futures to currencies to the Russell 2000, when even Bernanke mentioned by name, hit an all-time record today when we have Main Street still flat on its back.
So, if we want to begin to even lay out the path to something more constructive for the future, it has to start with fundamental change of policy at the Fed, and extracting the Fed from the grip of Wall Street because as I see it today, the Fed is entirely a tool of Wall Street, and it`s simply generating speculative windfall gains to a very small number of people in our society, while the rest struggle with this mess that we have.
HAYES: Howard, I want your take on the politics. By the way, if you`re playing THE LAST WORD bingo at home and you had the Russell 2000 in the first five minutes of the show, you win.
Howard, I want you to respond to this poll today out from — which says 29 percent of people, 29 percent of people consider us in a depression right now. What does that mean for the political dynamics for the White House, for congressional incumbents of both parties?
FINEMAN: Well, first of all, let me say, it`s fascinating to listen to David, who I have covered and listened to for a long time, going all the way back to the Reagan years. He is sounding like the populist guy.
HAYES: He sounds like you`re writing from “The Nation” magazine.
FINEMAN: And I think that`s very interesting. And indicative of the big problem here that he`s talking about. All that money was created out of nothing. But it`s money that could have been used if properly directed to the United States, to Main Street, to loans.
We rescued banks, but the banks didn`t turn around and rescue people. We created money for housing, but didn`t put it in the right places. We created money for investment, but didn`t put them into the United States.
Now, everybody loves the free market. But if you`re going to create that much money, you`ve got to find a way to spend it here. And I think that`s what David is saying, and I think that`s very, very important.
But the reason 1/3 of the American people think they are in a depression is that not, they haven`t seen any of that money. They haven`t seen any of that money in any way, shape or form. That`s just simple.
HAYES: I want to stay with you on the politics on this for a moment because we were talking this morning in the production call and said, you know, the conversation in Washington is like, if you go camping and you`re in the middle, you pitch a tent in the middle of the forest being consumed by a forest fire and you start arguing the tent about who`s going to drive on the way home or what color the tent is, or who didn`t bring the fort, and it`s unbelievable to me how absent the jobs reality is from the conversation in Washington.
Are you surprised by that?
FINEMAN: Well, I`m not surprised by it because it`s difficult right now to get immediate results from. That`s part of the problem.
The president doesn`t want to necessarily highlight the unemployment rate because they can`t pound the table better. Now, he`s been president for a while, OK? So, the more he focuses on the most glaring problem that we have, the more it begs the question of what kind of job he`s been doing. And by the way, he`s at his lowest level of job performance.
So, the natural thing now for somebody two years into office is to, you know, talk more, shall we say systemically, OK?
Now, the Republicans, they want to talk about spending cuts because it`s a nice big abstract thing that plays into the small government ideology of the base of the Republican Party. And they don`t want to talk about the immediate effects of the budget cuts they don`t really have the guts to talk about, because that will cost jobs.
FINEMAN: And not just federal jobs, not lazy federal workers, but we`re talking about firemen and policemen, and people in the community, local people who also need jobs. So, there`s a perverse incentive not to talk about the main thing that`s at the center of the problem.
HAYES: David, you served in Congress as a member of the Republican Party. You were director of OMB, part of the famous before my colleague William Greider, who wrote about the lessons you learned when you came to Washington. In watching this Republican class come to Washington, what do you make of their performance so far?
STOCKMAN: Well, it`s very disconcerting. When it comes to this anti- spending rhetoric, the Republicans are all hat and no cattle, as they say in Texas. When you look at what they have actually proposed, the entire defense and security budget, $700 billion, is taken off the table, apparently because they have to kiss the ring of the neocon bishops who would otherwise not support the plan. Then they take all of Social Security, all of Medicare, off the table, $1.4 trillion for the next 10 years.
When you do that and you say that taxes can`t be raised out of religious principle, then you`re left with the safety net. And so, they take out a meat cleaver and make unbelievably deep and unrealistic and untenable cuts, even they must know that, in the safety net and that turns the fiscal debate where we should be getting engagement between the two parties into what I called the other day the beginning of a class war.
And it`s really unfortunate because I believe we don`t have that much time to address our real fiscal problem: we`re heading into a ditch, into a ditch where the president is saying tax the top 2 percent, when everybody is going to have to pay higher taxes, and the Republicans are saying balance the budget on the back of the poor, which isn`t going to happen and shouldn`t happen. And that`s the dilemma we`re in right now.
HAYES: David Stockman, thank you so much for your time. Howard Fineman, great discussion. I wish we could keep it going.
FINEMAN: All I have to say is wow
HAYES: I know.
FINEMAN: — on David stockman. OK, it`s amazing.
HAYES: This is where we are, folks. David Stockman, Howard Fineman, thank you both. I really appreciate it.
FINEMAN: Thank you.
STOCKMAN: Thank you.