tv PBS News Hour PBS May 11, 2012 3:00pm-4:00pm PDT
captioning sponsored by macneil/lehrer productions >> woodruff: federal regulators are investigating just how banking giant j.p. morgan-chase lost $2 billion in six weeks' time. good evening. i'm judy woodruff. >> brown: and i'm jeffrey brown. on the newshour tonight, we have the latest on the trade deal gone wrong, and assess whether the stumble bolsters the case for more federal regulation. >> woodruff: then, ray suarez examines a drug used to treat aids now approved by an fda panel to prevent the disease. >> brown: mark shields and david brooks analyze the week's news. >> woodruff: and margaret warner talks with prize-winning reporter leslie maitland about
her powerful and personal tale told in a new book, "crossing the borders of time." >> i had to grown-up all my life fascinated, spellbound by my mother's stories of war, escape and lost love. >> woodruff: that's all ahead on tonight's newshour. >> major funding for the pbs newshour has been provided by: >> this is the at&t network-- a living, breathing intelligence bringing people together to bring new ideas to life. >> look, it's so simple. >> in here, the bright minds from inside and outside the company come together to work on an idea-- adding to it from the road, improving it in the cloud, all in real time. >> good idea. >> it's the at&t network, providing new ways to work together so business works better. >> citi turns 200 this year. in that time, there have been some good days and some
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>> woodruff: it was a day for digesting the enormous losses reported by j.p. morgan-chase. and as the news spread, so did word that the banking giant will face a federal investigation. the stunning disclosure from the nation's largest bank rippled across wall street and washington today. it came from c.e.o. jamie dimon late thursday in a surprise conference call with analysts and reporters-- the bank had lost $2 billion in just six weeks. >> these were egregious mistakes. they were self-inflicted. we are accountable, and what happened violates our own standards and principles by how we want to operate the company. >> woodruff: without giving details, dimon said the "mistakes" involved so-called "derivatives"-- or trading bets- - in the credit market. he maintained the bank had been trying to guard against risks, but ended up heavily exposed. >> the new strategy was flawed, complex, poorly reviewed, poorly
executed and poorly monitored. the portfolio has proven to be riskier, more volatile and less effective as an economic hedge than we thought. >> woodruff: dimon also warned there could be additional losses of $1 billion or more. that sent shares in j.p. morgan- chase plunging more than 9% today. the admission was all the more surprising because j.p. morgan- chase came through the 2008 financial crisis without reporting a loss. the announcement also triggered new calls for tighter government regulation. democratic senator carl levin spoke on cnbc. >> what you cannot do is bet on a general direction of the economy, because that's the kind of bet which can lead to a bank getting in big trouble, and if it's a big, big bank, if it's too big to fail, if it did fail, would drag the entire economy down with it. then, we end up bailing out these banks. >> woodruff: levin pointed to the need for the new "volcker
rule," named after former federal reserve chairman paul volcker. it takes effect in july, and will ban so-called "proprietary trading," effectively barring big banks from trading with their own money. j.p. morgan's dimon insisted yesterday that's not what his bank was doing. in the meantime, it was widely reported that the federal securities and exchange commission has opened an investigation into exactly what did happen. >> brown: and to help flesh out more about this story, we turn first to liz rappaport of "the wall street journal." if a company debt...
viewed as more likely to pay off its debt, its debt, you know, the value of these contracts, these derivatives go up or down. so jpmorgan was effectively taking a very large position in securities that would pay off for the bank if the u.s. economy and american corporations got healthier. >> brown: now one of the question, of course here, is whether this trade activity was intended as a form of guarding against risk or actually bets that created even more risk. what is known and not known at this point? >> well, i think, you know, we heard jamie diamon say that these-- that this office and that this position was intended as an economic hedge. i think that's a really unlore clear thing to say. you know, usually hedges in banks are tied very closely to a certain o position or a certain activity. if you make a loan, you buy this type of insurance
contract, that protects against that company to the being able to pay it back. so exactly what kind of hedge and what he, what this group actually hedges against is unclear. and you know, the fact that thises with such a large and outsized position in one direction, and they got caught sort of flat footed with it also doesn't sound o like a hedge, it sounds like a bet. >> brown: now you refer to this group, and the character at the centre with the colourful name, the london whale, the person at the centre of this, tell us about him, the group and, i gather, it wasn't the sort of classic rogue trader type of situation that we've heard about before, so what was it? >> well, the london whale was named bruno-- and he, i know, he is a trader in london in this synthetic credit market, you know, credit default swap market. he's from pairs. he computes to london, apparently he wears black jeans all the time. but he basically was called
the whale because in this market which sounds very big, you're talking about trillions of dollars in number, but it's actually often very illiquid. he amassed his position in one index, i actually forget what it is called, but an index that references 121 kind of corporate debt names. and you know, he took such a large position, he was so known in the market for being amassing that portion you know, he was like a whale in the ocean. he was sort of obvious and noticeable. so hedge funds and other type os of traders that operate in this market noticed what he was doing. which was driving down the price of protection on these types of companies. and they took offsetting bets. so that why he was a whale. >> brown: okay. but not a rogue trader, as we often use the term. i mean he was not operating off on his own. >> no, i think that's still somewhat unclear. but apparently the bank has
said that you know, i mean diamon said it was poorly monitored. but the bank has also said that you know, well well knew exactly what this office was doing and the trades that it was making. and you know, permission to make such big bets and trades were kind of run up the flag pole to high levels and senior executives at the bank. you know, i don't know mr. diamon knew exactly about what this guy was doing, specifically. but yeah, i don't think we have a rogue trader situation. >> brown: and finally, before this, jamie diamon and the berm, they quite good reputations, right, through the financial crisis, in fact. >> oh definitely. jp more dan is a bank that survived the financial crisis better than most of its peers. the c.e.o. was considered kind of a very plain spoken and very sort of true representative of kind of main streets, you know, need for safe banking. i mean jp pore began itself
was considered a very, very, you know, skillful risk manager. having gotten out of some of the riskier type of mortgage securities that other banks were doing well into the crisis. so i think this is a big reputational hit for jpmorgan which, you know, and it creates a lot of uncertainty in the market place banks. the big question about banks was k we ever really understand was's going on there. and if jpmorgan had a unit that was ill understood and ill monitored, you know, even by him, then i think that, you know, the marketplace gets scared all over again. >> brown: all right, liz rappaport of "the wall street journal," thank you very much. now, the debate the story is prompting anew about financial regulation. we pick that up with: michael greenberger is professor at the university of maryland school of law, and a former federal financial regulator.
and bert ely heads his own consulting firm specializing in banking, monetary policy and financial regulation. michael greenberger, i will start with you. so that the question. was this just a bad mistake or does this is a something about more systemic problems. >> this is to the just a bank appearing to be a systemic problem. in other words, we're to the going have to hopefully bail jp pore began out. but as liz rappaport said, these were supposed to be the brightest guys in the room. and if you listen jay me diamon explain this, he called it he greejs us, sloppy, et cetera, et cetera, that is 9-- message being sent that these complex instruments are not even well understood by the people who create them and trade them. >> brown: an therefore we need more regulation. >> well, we don't need more regulation because actually the dodd frank statute which was sign mood huh in july of 2010, if it is ever allowed to go into effect and the banks have been very tough in keeping it from going
into effect, would have six ways from sunday to stop this kind of trading. and there is legislation pouring through the o house right now to undo dodd frank. presidential candidate to be mr. romney, one of his pledges is to repeal dodd frank. and so he's asking the american public to go back to a situation where the po profits that are made on these, and they can only be called bets in my book, are kept by the bet. the losses if they are extreme, must be made up by the tax -- >> what do you see, does this suggest the need for dodd frank. >> able with, i think the real issue here is, with regard to the so-called vocal rule in dodd frank. dodd frank is a very complex piece of legislation. so we, it seems important to focus in on what is at issue here. and as the volcker rule which is intended to o provide a basis for more closely regulating the
derivatives activity and other trading, financial trading activity of the banking companies. the problem is that the regulators are having an extremely difficult time figuring out exactly how to write the rules to implement the volcker rule. and i was content, i think motorcycle el might disagree with peon this, that i don't think an implemented volcker rule, and it will be implemented eventually, would have prevented this type of situation. because at least on the surface, the derivatives that the london whale entered into were meant not to be-- were really meant to protect the bank against losses on loans and securities. and as i understand the volcker rule would have been outside the focus of that rule. >> brown: well, does anyone understand this? because as i read it, so much seems to rely on the terms "hedging" and "proprietary trading" >> if that question can't be answered, you've got a real
problem. if you ask me am i hedging in my life, yes. i bought automobile insurance to protect my car being totalled. >> brown: so are you saying this clear. >> jay me diamon or jpmorgan can't clearly explain how they were hedge. they would like to say they were hedging because that makes it more forgivable. if there are dourkts if you can't clearly say i've got a credit default swap to protect me against the failure of a company i have lent money to, that is a hedge. trying to bet on a 121 company index, the volcker rule will go into effect and when it goes into effect, it, if you can't explain that you are making a market clearly if there are doubts f there are questions, if the pbs newshour is confused, that will be found to be in violation of the rule. >> brown: i don't know about the pbs newshour, but you don't see seem to be clear that this case would have been different if the volcker rule was in place. >> i don't think it would have been different. one of the things, and michael really kind of
touched on, is there are different differences of opinion, legitimate differences of opinion about the purpose of particular hedges serving. and i think what happened in this situation is that, an idea that was good in concept and good up to a point was taken to extreme. and liz touched about how he was dealing with the particular instruments and the market became liquid. he became too big a play per in the market, that is in effect why he was the wail. and this reminded me of another situation back in 1998 when a company called long-term capital management blew up. big difference there is that there was great concern at that time when long-term capital management had its problems that it might shake and rattle the whole financial system. the good news about this situation is that as big as that loss is, it was one that jpmorgan chase could handle internally and bear all of the loss. >> brown: all right, but in layman's terms there is still this too big to fail
question. and we heard it in the set up from senator leffin. is this a case that suggests to you that the purpose of the volcker rule is to get bank holding companies that have our deposits that are insured by the f.d.i.c. or the american people, and who have the ability to turn to the fed in a crisis and get themselves bailed out, what the volcker rule says, we don't want you engaging in reckless transactions, egregious, sloppy transactions, to use jay me die upon's word os because are you use the taxpayer's money. so we're going to take you and say you can't do this kind of trading. if you can't clearly explain to me this is a hedge, you're out. now by the way, it's not just the volcker rule. there's something called the lincoln rule which would have prevented this trade because it was an unclear credit default swap, therefore unsafe, and also there's a whole measure of clearing, transparency, capitalization, collateralization. none of these things were present. if this were transparent,
the regulators would have known about this when "the wall street journal" was reporting about the london whale weeks ago and they would have put a stop to it. >> what about pie question about the banks too big. does this tell us anything about whether something needs to be done about the too big to fail. >> i'm not as concerned about the too big to fail as many others are. one of the things that becomes a problem, they say we break up the big banks. the question is how do we break up the big banks, i have yet to hear a credible explanation. here is what also concerns me. the more you try to zero regulation in on the bank,ment in one you raise the question, are the regulators up to the job. but the minute you try to queas in on the banks by squeezing a balloon, what will happen is a lot of these transactions will move out into what is called shadow banking into a less regulated world. and if they blow up there, they might in fact blow op up the whole financial system. >> brown: well, that's a horrible place to stop but i have to stop there. bert ely and michael
greenberger works blowing up the whole financial system, thanks so much. >> woodruff: still to come on the newshour: a drug to prevent aids; shields and brooks; and a true story of love and war. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: the troubles at j.p. morgan-chase pulled down financial stocks across the board today. that in turn, sent the dow jones industrial average falling 34 points to close at 12,820. the nasdaq rose a fraction to close at 2,933. for the week, the dow lost more than 1.5%; the nasdaq fell just under 1%. an american soldier was killed in eastern afghanistan today by a man wearing an afghan army uniform. the taliban claimed responsibility. it was the 15th instance this year of afghan troops turning on foreign forces. a second nato soldier was killed today in the country's south. separately, "the washington post" reported afghan commanders have started refusing to conduct night-time raids since a new agreement gave them veto power. the afghans have long complained the raids cause too many
civilian casualties. in greece, political leaders failed in a third attempt this week to form a government after sunday's election produced no clear winner. talks have foundered in the face of public opposition to austerity measures demanded by the rest of europe. that could open the way to another election. the arab world's first presidential debate took place last night in egypt. it lasted for more than four hours, as residents in cairo gathered at outdoor cafes to watch. two candidates participated-- moderate islamist abdel-moneim abol fotouh and former foreign minister amr moussa. in all, 13 candidates are competing in the election, set for may 23. jetblue airways is now investigating how a toddler's name showed up on a no-fly security list. the 18-month-old girl and her parents are of middle eastern descent. they were taken off a flight from fort lauderdale, florida, to newark, new jersey, on tuesday. security officials spoke with the family, and ultimately, let them back on the plane. jetblue blamed a computer glitch. there was word today that legendary car designer carroll
shelby died thursday in a dallas hospital. he was a champion auto racer before designing "muscle cars" in the early 1960s. at the time, the "shelby cobra" was the fastest production model ever made, going zero to 60 in three seconds. shelby received a heart transplant in 1990, and became one of the world's longest- living transplant patients. at his death, he was 89 years old. those are some of the day's major stories. now, back to jeff. >> brown: and we turn to the new use of a medicine to prevent the spread of h.i.v. yesterday, an expert panel of the food and drug administration gave the go-ahead to a drug combination for that very purpose. until now, the agency has only approved drugs for treating the disease. ray suarez picks up the story. >> suarez: anti-viral medications have long been used to treat aids and extend millions of lives. the drug combination known as truvada has been shown in some trials to reduce the risk of infection when used daily. it would be approved for use in healthy adults before they contract h.i.v.
but there are big questions, too. daily adherence was a problem in some trials, and the medication is expensive. there are more than 50,000 new h.i.v. infections in the u.s. each year. globally, there are more than two and a half million new aids cases annually. dr. anthony fauci is the director of the national institute of allergies and infectious diseases, which funded some of the trials. >> from fauci,-- truvada in a so-called off label way for years to lower their risk of infection. why is it an important step for the fda to say yes, it's okay to use it as preventive medicine. >> well, first of all, because it would add to ot armament arium proven prevention modalities, prevention for hiv is really a multifaceted group of prevention modalities that is kind of a tool kit this one can be potentially very effective.
so if it is a troved-- approved and added to the recognized prevention modalities it would be an important advance in making available for certain people a very effective way to prevent hiv infections. >> suarez: you say for certain people, i guess truvada is not going to be recommended for every sexually active person. who is considered high risk enough to use this medical approach. >> well, there are at least two groups and probably a third group. the groups that are being looked at is first men who have sex with men, and people who are in what is called discordant couple relationships where one person is hiv infected and the other person is not. and then there are other high-risk groups of people who under special circumstances have very few other options to prevent hiv infection except to do this. but the two major groups are men who have sex with men and discordant hiv infectioned couples. >> suarez: there has been some interesting reaction from across-the-board. some welcoming this decision, some pretty worried about
its future. one anti-aids activist in the l.a. area said oh, great, all men need is another excuse not to use condoms. they're afraid that if they get a partner on truvada, preventive measures won't be taken to protect that partner any longer. >> well, certainly that's a possibility. but the clinical trial did not really indicate that that is the case. this is not meant to be a substitute for other proven prevention modalitis. but to be a complement, and an addition to others. and we did to the see that kind of aversion for regular standard risk behavior during the period of the clinical trials. obviously when this is made available to larger number of people, we'll have to keep an eye on that. but hopefully that won't be the case. >> suarez: the fda is barred from considering costs when a session if you medicines. but this pretty expensive, isn't it? >> yes, it is. if you look at a person taking truvada for an entire
year, the price range is somewhere between $12 and $14,000 a year. it's not an inexpensive drug. it is a combination of two drugs. it has been used for years for the treatment of people who are actually infectioned with hiv. so it is a drug with which we have a considerable amount of experience. but you are right t is considerably costly. >> suarez: but when dow the cost benefit analysis, is it cheaper to keep somebody from contracting hiv or perhaps developing aids than it is to give them this new therapy. i mean how do you balance those two out. >> absolutely. if this drug which if hopefully will be and looks like it could be quite effect any certain groups in preventedding hiv infection, the cost savings would clearly be in the benefit of the-- if you balance cost with benefit, the benefit clearly outweighs the cost. >> suarez: can you skip a day on this drug? there are many drugs that
really don't lose their effectiveness if you cut the dose or skip a day. is this truvada one of those or is it really dangerous when you do that? >> well, we know for sure, ray, that adhereance to the regimen of ef row day clearly makes it much more likely that you will prevent infection. i don't think you could say if you skip one day it's over. because remember, you're not treating an infection that's already there you're trying to protect against infection that you would get. but if you really want the optimal affect, then clearly you should be taking it ef row day. >> suarez: i ask because i think in some of the clinical trials, they found that in the lower adhereance groups, the effectiveness went way way down. >> absolutely. but you know, you're talking about either a day or somebody who really is relatively careless about taking it. there is no doubt if you look at the effectiveness of the drug, when you look at all coppers in the study, particularly the study with men who have sex with men, it was 44% effective.
but if you really ask very clearly did you really take your medicine every day, the effectiveness actually went up to over 70%. and if you actually did blood levels to absolutely prove that someone was taking the medicine essentially every day, the effectiveness of the prevention modality went up to 90% so it really does work if you use it and that's why adhereance to taking the drug is going to be a very important part of its effectiveness as it is used by more and more people. >> suarez: in some parts of the world what you call discordant couples, couples with different hi vstat us, are a big part of the infected population. because most transmission is heterosexual. but it's also a very expensive drug. can we eventually, and has it worked that way in the past with these drugs, can we expect the price to come down in a way that will really bring help to those mixed status couples in some
of the poorer places in the world. >> well, i hope so, ray. and certainly if you compare in low and middle income countries the price for a standard regimen of anti-retro viral drugs for hiv, for people who were already infectioned, the prices of those drugs are considerably lower than the prices that we would pay in the developed world, in rich countries. so we would hope that when you are dealing with low and middle income countries such as in subsaharan africa that the prices will be lower. >> suarez: dr. anthony fauci, thanks for joining us. >> good to be here. >> woodruff: the president and his challenger shifted back to the economy today in two battleground states. the presumptive republican
nominee, mitt romney, visited a foundry in charlotte, north carolina. >> we have a president who's installed some of the old liberal policies from the past, and they didn't work then and they sure as heck are not working now, and they'll not work in the future. >> woodruff: the visit came just three days after north carolina voters approved a constitutional ban on same-sex marriage. romney supports such bans, but he did not raise the issue today. nor did he mention "the washington post" report that, in high school, romney and others bullied a gay classmate by holding him down and cutting his hair. the candidate apologized yesterday on fox news, although he said he doesn't remember the incident, and did not know then that the boy was gay. >> there's no question but that i did some stupid things in high school and, obviously, if i hurt anyone by virtue of that, i would be very sorry for it and apologize for it. >> woodruff: meanwhile, president obama was in reno,
nevada, where the recession hit especially hard, promoting his policies over republican ideas. >> it's going to take a long time for the economy to fully recover, more time than any of us would like. and i refuse to sell this country short by going back to the exact same ideas that helped to get us in this mess in the first place. >> woodruff: this was fresh off last night's hollywood fundraiser at the home of actor george clooney, bringing in a one-night record $15 million. mr. obama won warm applause from a crowd that welcomed his newly announced support for gay marriage. the president took that stance after vice-president biden said sunday that he is "absolutely comfortable" with same-sex couples marrying. wednesday on abc, mr. obama said he had meant to address the issue before the vice-president spoke out. >> i had already made a decision
that we were going to probably take this position before the election, before the convention. he probably got out a little bit over his skis. but out of generosity of spirit. >> woodruff: reports today said mr. biden apologized to the president shortly before wednesday's interview. and to the analysis of shields and brooks-- syndicated columnist mark shields and "new york times" columnist david brooks. are gentlemen, good to see you both. so mark, the president came out and said he's in favor of gay marriage. how big a deal is that? >> he did, he did do that, judy. it, first of all t was not orchestrated. that seems to be the suspicion as all the conspiracy buffs in washington, oh, boy, wane this clever. it really wasn't clever. joe biden came, as you pointed out in the piece, came bluntly out. and then anee duncan was going go one by one through the cabinet until they get to the president.
and the president had an untenable position, which was his position was-- no leader on a controversial issue can say pie position is evolving. you expect a leader to say i have thought about this. i have come to this conclusion, this is what i have decided. and the president did decide. and it is a deal, how big a deal it's going to be, i would say this, for the democrats, the democrats are trailing republicans in enthusiasm about this election. quite the opposite of 2008 where all the enthusiasm and intensity were on the democratic side. this may generation-- generate some enthusiasm among those younger voters who were so energized in 2008 and are far less so in 2012. >> woodruff: what about the import of the president's-- how is history going to look back. >> i think it will be a significant step. this is remarkable it is rare that you see public opinion shift so fast on one issue. it has been lead by young people, people under 40. but people over 60 are moving, republicans are
moving, democrats are moving. and so there has been just this inkrebd-- incredible shift in public opinion. in contrast to say abortion issue which is pretty much stagnant decade over decade, this you see this whole shift. so the president has not lead the shift. but he's moved along with it will. and so in 1996 he filled out a questionnaire where he said he was for gay marriage and sort of backed off that for a long time. and you know, you understand why. you don't expect our politician to commit political suicide, do something tremendously unpopular and he didn't. and then eventually he decided that he was going to follow along. >> woodruff: right. >> and get with the program, so to speak. and sow hasn't been out front, nonetheless i think he has done the right thing. i think it will be remembered as a very important step for a civil rights victory. and i think its with a brave step. it is something that i think will hurt him. and it arguably, mark points out it will build up intensity but i think state-by-state there are crucial states like north carolina, missouri, ohio,
pennsylvania maybe, where you've got pretty significant majorities who oppose gay marriage. and so i think in some of those states, the sensitive issue matters at all in the election t will have an effect. >> woodruff: trump the economy. >> i don't think it will, david is absolutely right. in 1996, judy, when bill clinton was president of the united states, 27% favored it in a gal op pole, 68% against it. the same gallop poll now shows a majority of americans showing it. that say dramatic change in 15 years. and credit has to go to people like david brooks who was a conservative thinker who made the case that if you cared about stability, and you cared about institutions, that you had to be for gay marriage. and especially if you wanted permanence in relationships as far as the nurturing of children. i read that 27% of gay couples now have children. and more and more people have seen this. and more and more people
have gay friends am i agree with david in 2004. i believe george bush carried the state of ohio against john kerry because there was a same-sex marriage amendment on the ballot. and i don't say that ohio has become berkeley overnight. but i think the economy does trump this. i think african-american voters when tested, who voted in large numbers against same-sex in 2004 in ohio will, in fact, support the only african-american ever elected to the white house and overcome it. and i think there has been a change. i really do. i don't know what the result is going to be. but it, i think it certainly put the lie to the kennard that same sex marriage threatens traditional marriage. >> woodruff: you mentioned gay adoption, it was interesting, david, mitt romney says he believes marriage should be between a man and woman but says he think it's all right for gay couples to adopt children. how do you square that. >> right, and he has been sort of running for governor
in massachusetts, he was much friendlier at least in into nation so there have been subtle gradations. i'm pretty sure this is how the republican party will handle it. they're not comfortable with their position. they're certainly to the comfortable with the socially conservative traditional position that it is just an a bomb anything and wrong. so you hear in washington this week along of anxious republican pollsters saying you do to the want to go there dow not want to pick a fight on this issue. and so it will be unlike 2004 where they were eager to pick a fight. as i say, i don't think it will help obama in some of these particular states. i do not see republicans leaping on thisment because they can see which way the winds are blowing. >> and judy, mitt romney's position o on it is crystal clear and totally born of principles. he is for, are you right, gays being able to adopt. but he's for unwed parents, for children. in other words, he doesn't want the stability the
security of a family, legally, and he's for a constitutional amendment to outlaw gay marriage. so you have obama who says he's for same-sex marriage but he wants to do it on a state-by-state basis, not the traditional democratic approach to most problems. and the republican is saying he doesn't want to do it by state's right. he wants to do it with a federal mandate. so both sides are a little bit contradictory. >> woodruff: kind of the opposite of what one normally thinks of democrats and republicans. >> for obama it is a little out to say a state issue. he doesn't have to get on the affirmative. >> woodruff: just quickly to both of you. a word about this "washington post" story about what happened when romney was in high school, a senior about to graduate and there was this incident where he and some of his friends held down a classmate and then, and romney and others cut his hair. romney says he doesn't remember it. five of the classmates say they do. does this go anywhere? >> i done think so it was an ugly episode but there is no
record of him behaving like this as an adult. quite the contrary. when you interview him people about his career at bain, as governor they talk about him being extremely kind and compassionate am you can attack romney for a flip-flop other. you cannot attack him for being a crawl bully it is just not in his adult record. so to me this was a piece of his life that happened when he was young, wildly out of context with his adult record and blown out of proportion. >> woodruff: he says he doesn't remember it but he says if he did something wrong, then he is sorry for it. >> if i offend anybody by holding them down and cutting his hair off and bullying him-- of course he-- if it did happen, his classmates testify that it did, he does remember it. i mean because it is an unhappy chapter, he without prefer not to remember it. but i do not think it has any link at the political issue. this is a man who has run twice for president who has had opposition research done by republican candidates and o upon onlies of him who don't like him.
who would use anything they come and there is no pattern of his abusive behavior that i have ever heard of, save this one incident, which is ugly and offensive and one that he would like to disremember. >> woodruff: completely different subject. a couple of countries in europe, david, voters this week, greece and france and the voters lashing out against austerity. we talked about this a little bit here but what does this is a and is it going to have repercussions in this country? >> yes. first what it says, let's first define what the austerity is that we are talking about in europe. some countries in europe like greece and some of the smaller central european countries have actually cut spending. none of the other big countries have. in france, britain, italy, spain, spending is still going on. some of them have promised future spending cuts and a lot have raised taxes. so a o lot of the use ter sit not spending cuts, it's tax increases, employmently. so the austerity, it doesn't have a clear relationship to
what we are arguing about here, about whether we should cut spending. nonetheless t is true that economies around the world are in terrible shape. and income bunts are losing. gordon brown lost in britain, sarkozy now. people are getting thrown out by angry electorates. and so it is a perilous time to be an incumbent. >> unemployment was at a 13 year high in france. austerity, i think, defined hasn't worked. and certainly hasn't worked in great britain. and they are just the closest to us. country, economy, most comparable. and i just could not believe that the republicans in the house of representatives doubled down if austerity just, i mean you could say it was an ago of great high principles. >> to vote to preserve every penny of defense spending even though the pentagon said they don't need t and cutting literally billions from social programs like for the long-term unemployed and single mothers. it is just remarkable decision.
they lost 16 republicans in the house in doing so. and i think you starting to see cracks in the republican approach. and o romney now is going to be tied to this because he has endorsed the republican house budget. >> woodruff: this is to the a vote that will necessarily stand. >> a symbolic vote. as i say, what the republicans are trying to head off is where europe is, where some of those countriesing namely greece, they have to stabilize their debt this he have no choice. they have a different currency situation but they have no choice. and the republican point is we need to prevent us from getting there. nonetheless i sort of agree with mark. it's just a politically unsustainable position to be cutting food stamps and all this other stuff and not touching the defense budget. i understand the need to very a strong defense and to preserve our ability to project power. and it's fine to lay down a marker for your base. it's just not ace sustainable position the republicans are making a big mistake. >> woodruff: cutting meals on wheels and child care. >> exactly. and judy, just to add one thing to the point that david makes, ronald reagan
double odd the defense budget in 1980. 1981. but ronald reagan also signed the largest tax increase in the history of the united states in 1982, to pay for it i mean what the house republican's position is now they will not raise a penny of revenue from any source. they voted actually to support farm subsidieses for farmers while cutting food stamps. and to preserve them, rather than to pay for the food stamps. and i just think that is going to be a politically difficult position for the republicans to pain taken. >> woodruff: the loss of dick lugar in indiana this weakness think he lost primarily because he was getting older, he had paid a o lot of attention to foreign policy. people want this change and he was the personification of the establishment. nonetheless it sends a message, don't compromise. and other republicans and other democrats will learn that lesson.
>> woodruff: and mark, in west virginia, the president running in the democratic presidential primary, 60% of the vote against a convicted felon without got 40%. >> yeah, i think it's a terrible warning to the white house that, in a close democratic primary, democratic voters participating, that the president's o uponant who was a convicted felon serving 230 months in jail, got over 40% of the vote, carried 10 counties without spending a dime or without any kind of a campaign. and judy, it just says something that when the democratic united states senator will not say whether he voted for the president in the primary against the felon, nor will the democratic government never-- governor. that's a warning that are you in trouble. >> woodruff: it pay be a warning. >> i'm for voting for felons, it saves time. >> woodruff: mark shield, david brooks, thank you both. and if you want o even more of mark and david, and of
course you do, they talk sports and politics later in what we call the doubleheader. >> brown: finally tonight, on this mother's day weekend, a true story of escape from the nazi war machine, and love found, lost, and finally reclaimed. margaret warner has our book conversation. >> warner: ste center of this story is janeanne, a 15-year-old jewish girl raised in germany as the nazis come to power and her star crossed romance with roland, a french catholic four years her senior. in 1938 sigmar and alice and their three children norbert, jani nirx e and trudy set out on what would be a five year odyssey to find sanctuary. from fridayburg at the edge of the black forest they fled to a region of france. as the german occupation
advanced, the family moved from one northeastern town to another. then to lyon and the port city of marseille where they board one of the last boats carrying european jews to safety. after stops in casablanca and cuba in 1943, they finally arrived in the united states. janinio e and roland first met and again in lyon where their love grew but were separated when the family sailed away from france. despite vowing to find each other after the war they lost all contact. in 1946, on a blind date in new york city, she met the man she would marry, american leonard maitland. two children and 43 years of marriage later, leonard is die og. and janline and leonard daughter's leslie has begun her own odyssey to trace her po mother's story. through her research and travels she learns that roland is alive and living in canada. in 1991 nearly 50 years
after they last saw each other, janine and roland reconnect. now lesley maitland, a former "new york times" reporter has chronicled their story and their times in the new book "crossing the borders of time" lesley maitland, thank you for having us. this book of yours reads fartherly as a romance, and partly as a deckive story. what made you want to unearth all of this, and also to reconnect your moth we are this long lost love of hers. >> well, margaret, i had grown-up all my o life fascinated, spellbound by my mother's stories of war, escape and lost love. i can hardly think of a time in my life that he i did not know about the handsome frenchman she had left behind. and so there came a time when my father was ill, and i started thinking about roland. it came at a time when i was already researching her past in the hopes of doing some
extended wroiing about that period. and it dawned on me that there was one biggest aspect of her past that might be accessible. >> warner: this book is packed with history. >> i felt it was really, really important to take one family and the gradual changes in german oee that led them to have to flee from a home that was comfortable, to cross to a place where they knew no one, she had to assume a new identity, and this one love story set against the context of the time, and i really felt an admission in a way to bring that time period alive and to let people understand what it was like for people living through all of that. and-- . >> woodruff: now tell us the story of how it had really been a school girl crush blossoming into a mature relationship when they happen to renew in lyon.
>> i think for her living surrounded by chaos, madness and war, danger, i think this love became a kind of cocoon in which she wore blinders, in which she could behind against everything that was going on around her. love was the most important thing. >> warner: the war comes to an end, the war in europe i think within a year of them arriving in the states. and yet she and roland never reconnect, why? >> when they finally got to new york, unbeknownst to my mother, her father, the very authoritarian german father was finding holand's letter when they came in the mail. and was hiding them, des tloiing them and not telling them, not telling your daughter about them. an when she received no
letters from him, she assumed that he had-- . >> warner: and why was this, because he was catholic? >> i think partly it was because he was catholic, and i think that my grandfather in the wake of the nazi years felt a kind of i guess an intensification of his jewish identity. and the family having been dispersed during the war years finally for everybody to be together, for her to go back to europe was very threatening to him. >> warner: instead she married a very handsome but difficult man, your father. what was that like? >> he was a dashingly handsome as you say, intelligent man whom she was entranced by him in her o own way. but i think the fact that she always had this idealized o longing for the love that she had left behind in europe, had a terrible affect on both of them, in a wayment because my father knew there that
there was this other man in the background. a man o who doco do no wrong because he was no longer a part of dale oee life. i think as time went on he started to make her jealous. in ways that might catch her attention. >> warner: but as elies dying, you decide to return to europe and ferret out roland. why did you choose that moment to do that? >> the town where she came from had invited former jewish residents back for meetings of reconciliation. and so there was this set moment where people were coming to meet and discuss the nazi years in the town with teachers and students and officials. and to try to come to grips with the past. in fact, one night sleeping in my grandfather's former home in the house where my mother had been born, the past seemed very present. and i decided well, the past is not a thing forever o gone.
the past is just waiting to be found. faces lined by years are waiting to be recognized. and so-- . >> woodruff: so --. >> warner: so it was irresistable then to try to also track him down. >> yes. >> warner: so they final roly, due to your efforts, reconnect. >> i went to france and i just started searching. and eventually i found his sister. he's living in canada. >> warner: they then have a whole other chapter to their lives. describe that. >> well, he called her, after the visit to his sister b three months after my father died. and they began a conversation that became a ritual. and for a year they spoke on the telephone. she felt that in dense to my father's memory, she should wait a year. very sudden holy at the end of the a year she announced to me that she was flying to montreal. >> warner: so they managed to see each other quite a
bit. >> every six weeks. he would come and spend about two weeks with my mother. and that went on for about 15 years. >> warner: yet they never married, why? >> when they reconnected, roland was married. he had married as he put it kind of a despairing of ever falling deeply in love again. and yet both he and my mother felt that it would be unfair to his wife at a point when they were in their 70s for him to leave his wife at the very same time they both felt that they deserved this one chance of happiness that had been taken from them so unfairly by and family and circumstances. >> warner: how does it feel to be the daughter who really made it possible for her mother to find happiness.
>> on the first day that i ever met roland, we met at a restaurant near-- in new york and i saw them sitting at the bar. i felt as if i were watching my daughter on her first date. i felt, you know, something just joy that i had managed to bring about this kind of creation. it felt like a creation to see them with such perfect happiness after hearing about this myth ol gized love all my life, and kissing her hand and her laughing. it was a unique moment. >> warner: lesley maitland, thank you so much and congratulations on your book. >> thank you so very much. >> brown: you can start reading "crossing the borders of time" now. we posted the first chapter on the "art beat" page of our web site. >> woodruff: again, the major developments of the day: shares in j.p. morgan chase fell
9% on news that the bank lost $2 billion in six weeks' time. the securities and exchange commission planned to investigate. and president obama and republican challenger mitt romney turned back to the economy after a week spent largely on same-sex marriage. online, gwen ifill blogs about politicians trying to maneuver their way out of sticky situations. hari sreenivasan explains. hari. >> sreenivasan: gwen's take this week examines senator richard lugar's primary defeat and president obama's stand on same- sex marriage. that's on our homepage. on "art beat," we've posted a preview of jeff's profile of native american poet natalie diaz. and tonight's edition of "need to know" asks if the government should make it easier for foreign-born tech workers to stay in the united states. find a link to their report on our homepage. all that and more is on our web site, newshour.pbs.org. >> brown: and again to our honor roll of american service personnel killed in the
>> woodruff: and that's the newshour for tonight. on monday, we'll look at decisions issued by the supreme court. i'm judy woodruff. >> brown: and i'm jeffrey brown. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice weekend. thank you for joining us. good night. >> major funding for the pbs newshour has been provided by: >> citi. supporting progress for 200 years.
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