Show: Larry King Live
Larry King: Good evening. The healthcare fight in Congress has stalled in the short run. Is it going anywhere in the long run? Joining us to debate the issue are two top members of the United States Congress. Barney Frank, Democrat from Massachusetts. He chairs the House Financial Services Committee. And Ron Paul, Republican of Texas, a member of the House Financial Services Committee as well. Ron is also a medical doctor.
Okay, Congressman Frank, we’ll start with you. Is this dead on arrival in the senate, or do we have a shot there?
Barney Frank: You know, one of the things that’s most troublesome to me is the lack of interaction between the House and the Senate. There is just an institutional barrier. They tell you this; I’m not really sure what’s going on. I’ve been pretty preoccupied up to last Friday with the financial reform regulation. So I haven’t looked at it. But I don’t think it is dead. There was a great need to do something. We do have some people who are always going to say, “It can’t be perfect, I’m against it”. Those are not the kind of people who ought to be elected in office, because that’s not the way a democracy works. So I believe you are still going to see a pretty good bill.
Larry King: And what do you believe, Ron Paul?
Ron Paul: I’m afraid he’s right. That’s something that will come down. Since I take the approach that we don’t need more government in medicine and blame so many of our problems that we’ve had too much government in medicine already. So I’m not anxious for anything to come. But really the question is how you pay for it. And I think more and more Americans, at least now, are getting worried about how you pay for it. And even though I have an idealistic approach to medicine and everything that I do, that we should do it with less government, I do think everybody should be concerned about paying for it. And that is the reason why we can’t hardly ever talk about anything economical without talking about foreign policy. And that’s why I’ve emphasized that the waste overseas is so bad and it gets us into trouble. And we’re fighting these wars that are never declared and they’re endless. So I’d save hundreds of billions of dollars by bringing our troops home. And I would be willing to put a lot of that into medical care. But I still wouldn’t endorse the idea that we need more government management of care.
Larry King: Do you both philosophically believe that no American should go without healthcare?
Barney Frank: Well, I don’t think we can guarantee that by the government. But I have to say something first, and I’m afraid it’s going to be very disappointing to many of your viewers. I agree 100% with what Ron Paul just said. The hundreds of billions, the trillions we are on the verge of wasting in wars that do us more harm than good. That surely is very important. And Ron Paul has spoken very accurately and I do believe that we ought to have a system that extends medical care. But you can’t guarantee it. I think we can do a lot better in providing it. And I would also say that, whatever my difference with Ron Paul is, I think Medicare is a good thing. I think for older people they’re better off on Medicare than what replaced it; and that’s government medicine. I would also say the most popular form of medicine in my experience is the wholly government medicine that is dispensed by the Department of Veteran’s Affairs. The veterans I talked to would get very angry and someone said we’ll abolish medical services of the Department of Veteran’s Affairs, which is after all wholly government owned.
Larry King: Congressman Paul, would you agree that the public at large doesn’t want you as a body to fail again to come up with something that improves what we have?
Ron Paul: Well, everybody does, but I might believe very sincerely that you can improve it with less government. Others would believe that you have to have more government. For instance, in the imperfect world that we have, I don’t think we should be cutting out funds from Medicare. You know, it’s in big trouble already. But they were talking about taking 400 billion dollars out of Medicare to so-called pay for these others. That doesn’t make a lot of sense. No, I agree with the idea that everybody should have good healthcare. But I just don’t believe that government delivers on their promises. And when you think about houses; we were going to give everybody a house. And look, the poor people lost their houses. It was good intention, but the programs didn’t work. So that’s why I’m afraid that when you promise people healthcare, that some of them will come up short.
Barney Frank: Ron, I think there is a difference here. The mistake that was made by frankly the Bush administration more than anybody else, but some others joined in, which was to give everybody a house to own. I continuously argue that for some people in certain economic categories and in some social categories, rental housing is the appropriate form.
Larry King: Barney, didn’t you support Fannie Mae and the like?
Barney Frank: For rental housing, yes. I was very critical. In 2004 George Bush ordered Fannie Mae and Freddie Mac to start buying low-income mortgages from low-income people. I opposed it. I made a big distinction. I think pushing people into owning houses when they couldn’t afford it and weren’t organized enough to do it was a mistake. I was pushing them to do more rental housing and that’s a big distinction.
Ron Paul: I don’t think that we should make those decisions. He may be right about what you should have rental or buying. I like people to make their own choices. But I do think that we push some of these programs with community reinvestment acts and easy credit. There were a lot of things that encouraged this. I am convinced that if had a little sounder monetary system and we didn’t have this so easy credit, people wouldn’t be making so many mistakes.
Barney Frank: I have to respond to that because Ron there has got it backwards. The Community Reinvestment Act is not the problem. The Community Investment Act only covers banks, things that are technically called banks, that take insurance deposits. And they made a small percentage of the bad loans. The bad loans were made overwhelmingly by banks not covered by the Community Reinvestment Act. And the problem was too little government; not too much. You had private citizens lending money to other private citizens without regulation. Many of us tried to get rules adopted to prevent that because we saw the negative consequences. The Community Reinvestment Act was not involved.
Ron Paul: Barney, I wanted to bring it up because I didn’t want him to think that we agreed on everything. But no. Okay, go ahead.
Larry King: The Republicans today had a freeze for few hours on the debate, insisting that the 767 page amendment be read aloud. There is obviously some stop. Key question: Barney and then Ron. Barney, are we going to get a bill?
Barney Frank: I believe you will. You know, they used to read things aloud in the parliament in England in 1600 because they didn’t have any typewriters, much less computers. But I think you are going to get a bill.
Larry King: Ron, we’re going to get a bill?
Ron Paul: No, I’m saying that we will not. We will get something, but not a real bill. I think there will be some incremental increase in government involved in medicine, but it won’t solve our problems. So I guess in a sense there will be a bill, but it’s going to be very, very minimal. And it will be just something where they can say, “Look, we did something”. But we’ve been doing this for 35 years; incrementalism. But we have corporatism, the corporations run this show. The drug companies, the insurance companies, the management companies. They run it, so the corporations are still being protected even with this administration.
Larry King: Barney Frank and Ron Paul remain with us. Ben Bernanke is Times Person of the year. Some other panelists join us. Should he be? That’s next.
Larry King: Barney Frank and Ron Paul remain. Joining us now in Los Angeles Tanya Acker, the political analyst with the Huffington Post, and Ben Stein, the economist and former presidential speechwriter and columnist for Fortune Magazine. Before we get back to the total economy, what are your thoughts, Ben and Tanya, about the role Joe Lieberman is playing in this healthcare question? Tanya, you first.
Tanya Acker: I have to say I am so shocked and appalled. Actually I shouldn’t say shocked; but I do find his behavior fairly appalling. Particularly his new stance about the Medicare buy-in. You know, he said in an interview last night with Daniel Bash that he had to take a principled stance against this bill. But it seems that he’s really taking a principled stance against himself. Because he used to support these provisions, but apparently doesn’t like them now because people he doesn’t like are supporting them. I think that he’s really a big disappointment.
Larry King: Ben, what’s your take on Lieberman?
Ben Stein: Well, last time I looked, he represents the state of Connecticut which still has a very, very heavy presence of insurance companies. I’m sure he’s obliged them, I’m sure he wants to please them. And anyway buyins for people 55 to 64 for Medicare would be very, very expensive to a government and a people who are already basically broke by government overspending. But he represents the state where the insurance companies are. It’s not much more complicated than that.
Larry King: But the people are very liberal.
Ben Stein: The people are very liberal but the people have lots and lots of money and who can give it in a concentrated way are with the insurance companies.
Larry King: Let’s get to business. We start with Barney Frank. What do you make of the Federal Reserve chairman being named Time’s Man of the Year? They said he just doesn’t reshape U.S monetary policy, he’s led an effort to save the world economy. There you see the cover. What do you think, Barney?
Barney Frank: Well, first of all I don’t subscribe to the concept of a man of the year or a woman of a year. I think it is kind of agonistic. When reporters ask me, “What’s the one thing you would do?” And I said, “Well unfortunately I have more than one thing to do”, so I never make the pick. I do believe that it is accurate to say that he’s been a major force; after all he is a major piece of continuity. He starts under the Bush administration. Ben Bernanke was a high ranking George Bush appointee, first on the council of economic advisors, then as chairmen of the Federal Reserve. He’s the one who initiated the whole intervention. It was his decision; not Congress and not technically the executive’s decision; although the Bush administration supported him, to give the money to AIG. The whole question of this intervention, or what’s been called bailouts, began in September. So, in fact, as a description of his impact, yes. Now I think he made a mistake in the way in which he did the AIG thing. On the whole, though, I think what he has done has been constructive. I guess I would say this. He gets partial blame for the fact that the crisis arose. Although I think more of it went down with Greenspan. I think he gets a lot of credit for the way in which he’s coped with it.
Larry King: Ron, what do you make of this selection?
Ron Paul: I think it’s pretty neat. He’s the most important guy in the world. And anybody that can create trillions of dollars secretly behind the scenes and spend it with no oversight, I mean that’s pretty important. And he is a counterfeiter. So he is the chief counterfeiter of all history. And I would say that’s very good. And I like it because it draws attention to the Fed, because the source of so many of our problems come from the Fed. The business cycle comes from the Fed. So this, to me, is a real delight. So I don’t have to agree for the reasons that they gave him Man of the Year. Well, yes. But it’s very important that we understand why he is so important and powerful.
Larry King: Tanya, were you surprised at this selection?
Tanya Acker: I was a little surprised, but I have to say, with all due respect to Congressman Paul, I think here was a man who had to come onboard and run and manage things when we were really on the precipice of disaster. And you can call it counterfeiting or, you know, my understanding is the congressman has a very different view of government, the role of government, than I certainly do. But I would say that he deserves some kudos for at least staving off a much bigger disaster. There is still a lot more work to be done. But I think it was a good choice. Bravo.
Larry King: And Ben, what do you think?
Ben Stein: Well, he made terrible mistakes letting the monetary crisis get out of hand in the first place. Way, way, way too little regulation. Way, way, way, too much easy money going into people making mortgage loans. Way too little regulation of Wall Street. Wall Street was playing games with all of our monies walking off with billions in their own pockets and leaving us with trillions in liabilities. But even though he helped to create the problem, he helped create the solution; which was to flood the economy with money and you can call it counterfeit money if you want, representative. But it is money and it is under law money. And he did save the economy, but he had a huge part in harming it. But to me the man of the year is the American fighting men and woman fighting in Iraq and Afghanistan. Maybe they should be there, maybe they shouldn’t. But they are the real stars in this world.
Larry King: Let me take a break and when we come back Palin and Schwarzenegger are going at it. We’ll talk about that later. We’ll be back in 60 seconds.
Let’s take a call on all of this. Bill [...], Georgia, hello. Are you there? Are you there, Bill? Last chance.
Larry King: Okay, what’s your question?
Bill: I want to ask a question: when do these individuals here… I know Bernanke was awarded the prize and that’s all great and wonderful. When do we anticipate seeing these community banks be able to turn lose the money to get the lower middle class and the middle class back to being able to borrow money?
Larry King: The other night Donald Trump said the banks have the money but they’re not loaning it, Barney.
Barney Frank: I’m frustrated by that. And I think here’s the problem; there was certainly no government or obstacles in policy. But you have this problem. The bank examiners, the people who work for the federal deposits insurance commission for the control of the currency. They go out and examine each bank. I’m afraid their culture has been to be too tough. No bank examiner has ever been rebuked because of a loan that should have been made, and wasn’t made. But more often they are rebuked for loans that were made that shouldn’t have been made. And I’ve tried very hard, we have talked to the chiefs of those agencies to urge them to get people to lend. A part of it, frankly, can be counted on the accounting rules can be a problem there. Because as the value of their assets deteriorates and the amount they can lend deteriorates, we’ve tried to fix that. But I think it’s fundamentally probably a problem of the culture of the bank examiners that we’re trying to change.
Larry King: You agree, Ron?
Ron Paul: Yes, to a large degree. I think several things happen. After there is a bubble burst, then even borrowers get very skittish. Even if interest rates are low, they’re worried. Bankers get skittish because they lost all their money and they get frightened. I think Barney makes a very good point that the regulators get overzealous. That, of course, is the reason I don’t like regulators. But he mentions and he has talked to the regulators. They’re overzealous. They overreact because, in a way, they’re a third factor. You have the consumer not wanting to borrow, the bankers not wanting to lend. Then the overzealous regulators come in and say, “You better be careful” and they change the rules right in the middle of the game. So I think that’s what we’re facing.
Barney Frank: The small business people already. They did have a problem. They are ready and we have got to regulators to tell us they agree and it’s just a very uphill battle. I tell you this and maybe this is where I think government can do more. The chairman of the Alaska small business community had proposed that we up the Small Business Administration instead of guaranteeing loans made by the community banks, make the loans directly for a while. I think the community banks once they see that they’d better get back in business. I think direct loans would be the way to go.
Larry King: Got to take a break. We’ll pick up with more when we come back.
Larry King: Okay, Tanya and Ben, you get in on this. Two big names in the Republican Party are in a public spat. Arnold Schwarzenegger questions Sarah Palin’s interest in climate change, saying it has more to do with her career and winning the nomination. Meanwhile, she shoots back saying, “Why is Governor Schwarzenegger pushing for the same sort of policies in Copenhagen that drove his state into record deficits? What do you make of that spat, Tanya?
Tanya: I think that’s absurd. I think that’s another one of the absurdities that we’ve heard from former governor Palin in recent weeks. As a citizen of the state, trying to reduce emissions is not what’s pushed California to the brink of disaster. That simply isn’t it. And the fact that she’s one of these global warming deniers for whom the jury is still out, I think really speaks to how she values science. Or rather how she refuses to value science. I firmly stand behind my Republican governor. That’s my bi-partisan moment for the week.
Larry King: Alright. Ben, what do you think? I know that you’ve put your face in your hands.
Ben Stein: Well, because I am somewhat a fan of Sarah Palin, I’m totally with her about climate change. I think the jury is still out. There are thousands and thousands of reputable scientists who say the jury is out. There is a lot of data that the earth is cooler than what it was 500 years ago or 1,000 years ago or 2,000 years ago. So the jury is very much still out about whether or not there is global warming that is caused by man. But the connection between that and California’s budget problems is nil. There is simply no connection at all. There is one big issue: climate change may be a fraud, anthropogenic climate change may be a fraud. California’s budget problems are incredibly real and painful, and they are not a fraud.
Larry King: You don’t like person or man of the year, Barney, but having said that, who would you have selected?
Barney Frank: I wouldn’t have selected anybody. I do want to get in on the Palin-Schwarzenegger disussion. I think government Palin is critical of Governor Schwarzenegger because he didn’t have the courage to quit his governorship. She defines courage as quitting. And she’s shaming him for not having the guts to quit the way she did.
Larry King: Who would you have named, Ron? I’ll try to see if you answer to the question.
Ron Paul: Well, I haven’t complained too much about Bernanke, he’s a good target. And I get to make my points about the Fed. And, you know, they don’t always pick people for that role for positive things. It could be for negative things. I think the biggest counterfeiter in the world is a pretty good event that we should concentrate on because it wipes out the middle class and hurts the poor and gives us unemployment.
Barney Frank: Ron Paul thinks all money is counterfeit.
Larry King: Barney, who would you have picked?
Barney Frank: I would go with Ben’s pick.
Ben Stein: I would, without question, pick the American serviceman and servicewoman fighting and serving in Iraq and Afghanistan, putting his or her life on the line day after day. Absolutely without question.
Larry King: Tanya?
Tanya Acker: I’m going to second that. I’m going to second that. I am.
Larry King: Alright. Obama writes a personal letter to the North Korean leader, Kim Jong-il. The United States envoy delivers it. What happened to the axis of evil? Obama wants denuclearization of the Korean peninsula. Do you see anything wrong with that? Ron Paul? You see anybody wrong?
Ron Paul: Oh no. I like that. I’d much rather him do that. I wished he’d write some more letters. I’d wish he’s write more letters to the Middle East, to the people in Afghanistan and Pakistan and Iran instead of putting on sanctions and stirring up trouble and sending in more troops. So we need more letters and more talk. I mean, we left Vietnam in a terrible situation. Now it’s unified, they trade with us and they talk to us and there was no domino theory. The domino was towards capitalism and the West. But Korea, it’s divided. We have troops there, we spend all this money, so it’s about time we wrote some letters. I say more letters, more trade. Let the Koreans get together, let them settle their problems. Best thing in the world we can do is just come home from Korea, save another 100 billion.
Larry King: Ben, what do you think?
Ben Stein: Kim Jong-il is probably as evil a person as there is on the planet. He’s made his entire country into a penal colony, a gulag. He starves people to death by the millions while he lives the life of an incredible international playboy. This is a guy that has flawed every international law. The idea that you can change him by writing him a letter is comical. And the idea that we should not be defending South Korea against them is comical. I don’t know where these ideas come from, but it’s just comical.
Tanya Acker: I think the issue really is one of engagement. I think it’s been well known since his former boss President Nixon engaged with the really bad guy Mao Zedong who was running China. And so I think the whole issue was whether or not we were going to engage. Now, you know, whether it is writing a letter or picking up the phone. Look, I’m not going to speak to what are the mechanics of how we engage with people who we don’t like. But we’ve come up with the foreign policy where we’ve treated our interests like a video game where we said, “You don’t like us, we’re not talking to you until you do exactly what we say when we say it.”
Ben Stein: [...] had already said he wanted to have an approach with the United States and already sent many messages to Nixon about that. If that happened with Kin Jong-il I’d be with you entirely. It hasn’t.
Larry King: Barney, quickly, what do you think?
Barney Frank: I’m very close to Ben Stein’s view. I would try sanctions, and I thought my friend Ron was being too cavalier about this. This is a terrible man who has done terrible things. South Korea has become a democracy with our help and we should be very proud of that. The frustrating thing is that the People’s Republic of China, who wants to be a responsible nation, is failing on its responsible by not helping us put pressure on North Korea. But North Korea with nuclear weapons is a very scary thought and it takes strong action to stop it.
Larry King: We thank Barney Frank, Ron Paul, Tanya Acker, and as always Ben Stein.