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Shields and Gerson Survey Health Care Outlook, Economy

October 16, 2009 at 12:00 AM EDT
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Columnists Mark Shields and Michael Gerson sort through the top news of the past week, including a key vote on health care in the Senate Finance Committee, bank earning reports and conflicting data about the health of the economy.
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JIM LEHRER: And to the analysis of Shields and Gerson. That’s syndicated columnist Mark Shields, Washington Post columnist Michael Gerson. David Brooks is off tonight.

Mark, is it — on the same subject, is it fair to say that a lot of average Americans are really upset about the huge profits and the huge compensation that has already begun to return to Wall Street? Do they deserve to be upset?

MARK SHIELDS: They deserve to be upset.

Wall Street has earned the rage and the fury of ordinary Americans. Just two firms, Citigroup and Merrill Lynch, last year lost $54 billion. American taxpayers, firefighters and nurses, and teachers and hairdressers came up with the money. They — they knew that it was important to keep them in business — came up with $55 billion.

As they are losing $54 billion and borrowing $55 billion from the American people to keep their doors open, they award $9 billion in bonuses to their own people. Is that a sense of outrage? Is it justified, at that same time, Jim, that 14,000 Americans every day are losing their health insurance, when 5.5. million Americans have been out of work for more than six months, and we can’t even get the Congress, the Senate in this case, to extend unemployment benefits to these folks, with 424 Americans every hour having their homes repossessed?

Yes, there is a sense of rage, and it is totally justified.

JIM LEHRER: Totally justified, Michael?

MICHAEL GERSON: Well, it’s certainly there. You know, and it’s hard to argue with that sort of attitude. And many Americans feel it, left, right and center.

MARK SHIELDS: That’s right.

MICHAEL GERSON: This is not a particularly big ideological issue. People feel like there is a different set of rules for the wealthy and for the middle class. I think that’s true.

It — the fact is that a lot of executive compensation on Wall Street and other places is done through bonuses and stock options. It’s not done with salaries. That’s the way they compete for workers and, you know, keep people in jobs. That’s the way Wall Street works.

And — you know, and a lot of Americans are angry, but a significant number are happy when they see the market over 10000, which is also helping some of these firms as well. And, you know — and I think, if you look at the facts, the compensation strategies of banks in the research doesn’t really correlate very well with the performance of the banks. It’s not the key factor.

Greed is not the main factor here, but it is certainly a cause for a lot of resentment.

Resentment continues

Michael Gerson
The Washington Post
There is a [division] in America between those who are benefiting from the fact that the economy at its highest levels is coming back to some extent.

JIM LEHRER: Yes. And do you see that resentment waning, or is it going to continue to be there until this whole thing, or -- I don't mean the whole thing, but much of the economy recovers? As long as the people are still hurting out there, they are going to see these headline, they're going to see these reports and get upset.

MICHAEL GERSON: Well, there is a diversion right now, or a division, in America between those who are benefiting from the fact that the economy at its highest levels is coming back to some extent.

But unemployment is very high. You know, business startups are very low. The real economy out there is lagging behind our -- you know, the economy at the heights. And I think that is going to cause some tensions.

JIM LEHRER: You agree with that, too, do you not, Mark? I mean, it's -- while, in some strata of the economy, nothing is changing, except it is either remaining flat or it's negative, while, at the top, it's doing very well.

MARK SHIELDS: Yes. It's socialism for the rich.

I mean, obviously, the people having their houses repossessed are not too big to fail, or the people losing their jobs. We're laying off teachers in this country. I mean, and 75 years ago, Franklin Roosevelt said the measure of our progress is not whether we add more to the abundance of those who have much, but whether we provide enough for those who have too little.

And, I mean, I just think this thing has turned totally upside down. And I think there is a political rage. I think Michael is right that it's not left, right or center. I just think it -- we came to the rescue of these folks. Yes, they put the economy at risk. And now we -- and they talk about the pay for performance.

They got paid handsomely when they were profitable. They got paid handsomely when they weren't profitable. And they got paid handsomely with our money, I mean, equals anger.

Runoff in Afghanistan

Mark Shields
Syndicated Columnist
[P]eople who took great risks the first time and found out that it was a fraudulent process may not participate at the same level. I think it is a very, very complicating development.

JIM LEHRER: All right, let's move on to Afghanistan, Michael.

MICHAEL GERSON: OK.

JIM LEHRER: How do you read the potential or the probability at this point that there is going to be a runoff election?

MICHAEL GERSON: Well, I think it is pretty much inevitable, if the electoral commission, the U.N. electoral commission, comes in with a report that puts, you know, Karzai under 50 percent. If he were to ignore that report, this would move from being a controversial election to being a stolen election, which wouldn't work for him and it wouldn't work for us. There is really very little option here.

I talked with General Petraeus a couple of weeks ago on this very topic. The electoral crisis in Afghanistan is -- they consider one of their biggest problems. And you look at the Iraq example, it's interesting, because, you know, that was a case where a leader rose to the moment.

Prime Minister Maliki, everybody thought was going to be a...

JIM LEHRER: Yes, they put him down at the beginning.

MICHAEL GERSON: Yes, a stooge of the Iranians...

JIM LEHRER: Yes.

MICHAEL GERSON: ... a poor leader. But he then took on the Shia militia, became a national leader.

We really need Karzai to step into that role, and to have strong central authority, and to tame these corrupt warlords. And it -- you know, it is not going to work without it. And I think the military knows that. They have been planning on it. It's part of the strategy.

JIM LEHRER: Do you agree, Mark, that the Obama -- for the Obama administration's review of the policy, a new election and a legitimate, at least a president who is seen as legitimate, is essential to a new policy or a reappraisal of the U.S. policy?

MARK SHIELDS: Essential, Jim, and I think anything that even leaves a whiff or a scent of stolen election, or corrupt election, and this -- I mean, we're talking with about, in the report that I saw, up to one-third of the electoral returns being in question in the Karzai areas, these overwhelming numbers returning, where, in case -- ghost precincts and so forth -- anything, I think it moves the debate in the Congress and in the country from not how...

JIM LEHRER: Our country.

MARK SHIELDS: In our country.

JIM LEHRER: Yes.

MARK SHIELDS: Not from how we help this Afghan struggling government become more credible, more honest, more responsive, more competent, but whether, in fact. I mean, I think this -- if there is any lingering questions about the corruption -- and I think it's going to be very difficult to stage another election.

I think the insurgents will make it difficult to vote. I think people who took great risks the first time and found out that it was a fraudulent process may not participate at the same level. I think it is a very, very complicating development.

Modifying the McChrystal report

Michael Gerson
The Washington Post
The signs seem to be that [President Obama] is moving towards at least a modified McChrystal approach. It's going to be a tough sell for him in his own party and the rest of the country, which is deeply skeptical.

JIM LEHRER: Do you agree with Mr. Riedel, who told Margaret that international community, the United Nations and the rest of the world have to step up to plate to make sure this runoff election is...

MICHAEL GERSON: No, I agree with that.

JIM LEHRER: Yes.

MICHAEL GERSON: Yes. I mean, a legitimate partner is the key to any counterinsurgency approach that the military wants to take.

But we have another factor that is coming in here. And one of the -- you know, I think that the -- the situation with the election has hurt support for the Iraq campaign. But, at the same time, we really have solidified a united front of our own military in favor of the McChrystal strategy, the counterinsurgency strategy.

Petraeus, Admiral Mullen and, increasingly, it looks like Robert Gates, the secretary of defense, have rallied around the strategy. These are people at the very height of their military reputation because of what happened in the surge.

If Barack Obama now, in this environment, were to disregard that advice, it would be an extraordinary development. And the signs seem to be that he is moving towards at least a modified McChrystal approach. It's going to be a tough sell for him in his own party and the rest of the country, which is deeply skeptical.

But that seems to be the direction.

MARK SHIELDS: Well, it -- it might even be a bookend to the Bush administration, as I recall, when General Eric Shinseki said we needed 300,000 troops in Iraq, and General Paul Wolfowitz said no, no, we only -- we don't need that. It will pay for itself, when General Anthony Zinni said it will be the first Western Christian invading and occupying army of a pro-Israeli, invading and occupying army of a Muslim country, when General Joe Hoar, the former CENTCOM commander -- so, now those in uniform are to be paid total deference.

Then, they were to be dismissed. I don't in any way...

MICHAEL GERSON: The question is whether we look to General Joe Biden in this circumstance. And there's very little reason to do that.

MARK SHIELDS: We looked at General Paul Wolfowitz and General Dick Richard Perle, and we know where that got us.

I will say this.

JIM LEHRER: Let's don't re-fight Iraq.

MARK SHIELDS: No. No. But the respect and deference that is paid.

I have great -- I do not know General McChrystal. I have heard nothing but good things about him from people who do know him. And I have no question about his ability or his commitment. And I don't know where Secretary Gates is going to down on this. I think he is going to be enormously influential.

But, in the final analysis, it -- we do have the commander in chief. And an army doesn't fight a war. A country fights a war. And if a country isn't willing to fight a war, it -- you don't send an army.

JIM LEHRER: But you would agree with Michael that, if the president goes to a modified McChrystal plan, it's going to be very difficult for him, because of the views within his own party, his own vice president, and go on down the list?

MARK SHIELDS: And within the country.

JIM LEHRER: Yes.

MARK SHIELDS: And I think the -- and I think the story of the election today makes it even more difficult.

Snowe's role in health care reform

Mark Shields
Syndicated Columnist
Republicans would do well to understand, if you are going to win elections in states that they are not going to carry outside the old South and the border states, they have got to start to reach out to people like Olympia Snowe.

JIM LEHRER: Finally, in a couple minutes, health care reform, the Senate Finance Committee vote, the role of Olympia Snowe, is she essentially in charge now?

MICHAEL GERSON: Well, I think that she is playing an important role here, and, you know, from her perspective, an appropriate one.

I mean, it helps, because the strategy of the administration is to get 60 votes. This helps with that margin, when you have people like Lieberman and Blanche Lincoln and some others that may be questionable.

It puts her in a position of extraordinary influence, which some Democrats, by the way, resent. If she comes out and says, "I voted for this in committee, the Baucus bill, because it is a marvelous moderate plan," and then there are modifications made, and she says, "I can no longer support it," that is a big deal.

It is the one thing that could sink this plan in a lot of ways, so it's giving her a lot of power. She didn't bring a lot of Republicans along with her -- none, in fact. She didn't provide Republicans a lot of reasons to support the plan. But I think it was a victory for the administration.

JIM LEHRER: Victory for the administration?

MARK SHIELDS: Sure, a victory for the admin -- and a victory for Olympia Snowe, too. There are 217 Republicans in the Congress, and they have obviously concluded as a party that they are not going to -- in spite of the admonitions, urgings, expectations of people like Howard Baker, and Bill Frist, and Bob Dole, and Tommy Thompson, and Mark McClellan, all of them former Republicans in positions of leadership, to do something now to seize the moment, they have decided not to. Olympia Snowe stepped forward.

Here's the key to understanding Olympia Snowe and the Republicans. There are 18 states that the Democrats have carried in each of the last five presidential elections. Among them, they have 36 United States senators. Those 18 states are represented by 34 Democrats out of the 36. The only exception is the state of Maine, which has two Republicans.

JIM LEHRER: Yes.

MARK SHIELDS: Republicans would do well to understand, if you are going to win elections in states that they are not going to carry outside the old South and the border states, they have got to start to reach out to people like Olympia Snowe.

JIM LEHRER: Well, you're going to, on behalf of Mark, would you pass that on?

MICHAEL GERSON: OK.

MICHAEL GERSON: For what it's worth.

JIM LEHRER: All right. All right. We will leave it there. Thank you, both.