>> what do you think of when you see a tree? a treatment for cancer? alternative fuel for our cars? do you think of hope for the environment, or food, clothing, shelter? we do. weyerhaeuser, growing ideas. >> of free-market was never meant to be a free license to take whatever you can get however you can get it. >> this week on "inside washington," president obama to wall street -- the party is over. >> the bill that we have in front of us will actually provide permanent bailouts to wall street and enshrine too big

to fail. >> florida's republican gov. contemplates an independent senate run. president obama's chief was that the dreams of one day of being mayor of chicago. >> listen to my voice. i would get picked up in arizona i. is that what we want in america? >> arizona becomes ground zero in the immigration debate. residents of the nation's capital lose out on voting rights. captioned by the national captioning institute --www.ncicap.org-- president obama traveled to new york this week to chastise wall street for risky business practices that triggered a financial meltdown. however, at the same time he asked for their help in enacting financial overhaul legislation.

i don't know what you call this. is this chutzpah or good politics, mark? >> we will find out when they pass the bill, which i expect they will do next week in the senate. this is not about process, it is about product. >> charles? >> i wish they had proposed a bill that would instead break up the big banks said that he would not have too big to fail. it was no support, left or right, for that. this is a substitute. i am not sure it will call this what it wants, but i think it is a good-faith effort. >> chutzpah or good politics compound nina? >> it is good politics and a decent bill. i actually agree with charles that breaking up the banks would have been smarter, but neither republicans nor democrats support that, the political people. the economists do, but the political people don't read this will make life safer. but it will not prevent too big to fail. >> evan?

>> running against a wall street right now is a good idea. i don't think the public understands what is in the bill because we don't understand what is in the bill. there is a little bit on the derivatives, these crazy gambling instruments, requiring a little better transparency. that part is good and there is a few other things. but most of the public won't have a strong reaction. >> i think it does more than that. it is an interesting phenomenon. this bill has gotten tougher as it has moved through the senate instead of weaker. that is because i think people do realize that they cannot afford to have this happen again anytime soon. >> but the bill does not guarantee it will not happen again. in fact, it has a provision that is perverse, in which the treasury can designate any entity it wants, large or small -- it would obviously be large -- as a risk to the entire system. if it does so, it has the power to guarantee all of the bad

loans of the entity, which is an invitation to a company to a bailout. in other words, it would lower the rate at which the big institutions attenborough, because everybody but note that if it goes -- at which the big institutions borrow, because everybody knows that if it goes under it will be bailed out. >> some on wall street forgot that behind every dollar traded or leveraged, there is a family looking to buy house, pay for education, open a business, save for retirement. >> we have to get this right, because if we don't, we could stifle innovation, stifle the free-market, stifle the economy, and cause more harm than good. >> the president said to wall street that unless your business model relies on bilking people, there is little to fear. in his "washington post" columnist, steven pearlstein speaks of "wolfe street's

complete and utter immorality. there, a concept like truth, trustworthiness, fairness, are totally without meaning. there is only a long or short, win or lose." >> the model on wall street changed. once upon a time, an investment banker help to advise you on making smart investments. now they are a gambling casino. they are just trying to arrange an debts. -- bets. i am not sure that this bill is wi -- this bill will do a whole lot to change it. >> one of the things that the tougher in the bill is that it keeps the traders separate from the gamblers. that is not where we were 20 years ago when he dissolved glass-steagall. >> wall street will figure out a way to subvert it. >> first of all, that is a slur

and slam on the indian casinos. very you know it is a 51-52 house the advantage. here is did manage totally to the house. -- hear the advantage is totally to the house. the case could be made in the past and was made with health care that we had a system, that while flawed, did not meet -- did not need major change. you cannot make that argument as far as wall street is concerned. people believe that. people believe is wrong, it is rigged, and at last be regulated. >> what about orrin hatch's argument that could stifle innovation? >> a great argument against the minimum wage, you don't need any regulation, child labor laws. >> there are, believe it or not, at things as good derivatives. some corporations use derivatives to hedge risk in an

intelligent way to when congress starts messing around with that, i feared the iron law of unintended consequences. i also think that lobbyists are good at writing loopholes to get around stuff. >> we should be worried, but to separate the derivatives from the people -- the investing people -- is not going to stifle derivatives. derivatives will continue, unfortunately, in my view, at a greater pace, or at least this case. they now account for trillions and trillions. the reform is that you separate people who are advising on investments from the betters so there is not the inherent conflict of interest. >> in a later broadcast, evan thomas will explain how derivatives and collateralized debt obligations work. for now, we go to charles. >> the point is, what

regulation? you regulate wall street did okay, everybody agrees. but is an extremely complex system, and you have to regulate in the right way. it is the details here that actually matter. if you have a provision where the treasury will guarantee loans of any large institution it determines is systemically risky and this is all done without a preparation of congress, he does it unilaterally, all the power is in the executive, i think that is a bad regulation, because it will encourage risky bets. so is not a yes or no, it is what is in the bill. >> politics expert florida, chicago. look at this, 50,000 people rallied at the state capitol in springfield, illinois. these people came to the state capitol to ask the state legislature to raise taxes. yes, they support higher taxes, higher income taxes. only 5000 tea party folks turned out for sarah palin in boston,

and she hates taxes. illinois gov. pat quinn is asking for an increase in the income tax and these folks want them because they want to avoid budget cuts. can you imagine that, in the united states of america, people asking for our race and taxes? charles, what is happening to this country? >> i have no idea, but i think the fbi ought to be looking into this. [laughter] any other questions? >> let's move on. >> if i could be serious for a second, the fact that you had a tax revolt around the country and he might have had one demonstration in illinois indicates that the vast majority of americans, who are reacting spontaneously, are reacting against expansion of government. >> no question about it. mark. >> of voters in oregon, i would remind charles, voted to increase taxes. >> you want to run on higher taxes? >> i would be happy to run on

higher taxes. >> you would advise the president -- >> you are going to have higher taxes. the question is who do you want making those decisions, and making those cuts? if i were a citizen, like the people in illinois, i would want have somebody who is committed to programs like social security and medicare making those cuts rather than somebody who thinks it is some socialist conspiracy to bring down the constitution. >> last time i checked the you were a citizen. it is interesting that you say that. if it were so popular, the president would not have appointed deficit reduction commission as a way to punt the issue into december after election >> day> wasn't that originally a republican idea? >> they voted against congress imposing it unilaterally the way it as the base closing commission said, against power >> of that > -- power of that

commission. >> you are absolutely right. several republican senators who were for creating the commission withdrew their endorsement and voted against it for fear that it would become our reality. >> i am not against the commission on deficit reduction, but the reason that the president has appointed one and will not announce it himself and will not proposed raises in taxes himself is because it is not popular. >> i want to ask you about subbing else. there is a lot of intrigue -- >> you brought it up, gordo -- >> i know i did. republican gov. charlie crist was suppose to be a shoo-in but along came marco rubio. rudy giuliani is for him. dick cheney came up for him this week. if autolycus runs as an independent, his chances improve, correct? -- if charlie crist runs as an independent, his chances

improve, correct? >> i think he would most likely be the winner. charlie crist is the face of what i call the sane republican party, but one that has to govern. he probably did a stupid thing and physically embracing obama. but florida is one of those states that is just totally in the tank and needed and benefited by the stimulus package. >> nina's definition of sane republicans is the one to quit the party and becomes independent. >> is there a silent majority who listens to the chatter on the right and left and is dissected it turns out in november to elect a centrist? i hope the answer is yes. >> charles's definition of the sane democrats is a joe lieberman, who quit the party and becomes independent. >> i never applied you and your

party brothers are in stsane, jt misguided. >> charlie crist's only hope is to run as an independent if he stays in the primary, for the next four months, you will have these pilgrimages of republican presidential candidates trying to prove conservative cred by coming out endorsing marco rubio, who is an appealing candidate, don't get me wrong. but republican spending in florida is quite serious. these people did not live like mexican and generals. they live like something out of the hedge fund world . $500,000 on anything from tanning salons to nightclubs and las vegas the private aircraft. there is a federal investigation of this that could end up

tarring charlie crist and marco rubio. the democrats could be the beneficiary of this. >> conservatives are urging that charlie crist to not run as an independent r. >> some of the conservatives endorsing marco rubio are paying charlie crist back for endorsing john mccain. >> mark rubio is the obama of 2006. if he wins and is and take it, he will be one of them as for public -- >> -- one of the most appealing republican candidate in decades. >> white house chief of staff rahm emanuel cals charlie rose that he hopes mayor daley seeks reelection, but if he does not, and he wants to be mayor of chicago. >> you may have to be as intense and crazy as rahm emanuel to run that city. i don't see what is so

extraordinary. >> some ad raised eyebrows because mayor daley's wife is sick. >> does indeed raise eyebrows that the chief of staff to the president of the united states is dreaming of another drop in public? >> -- another job in public? >> this may be disarming candor from rahm emanuel, but he was pretty blunt about saying here i am as chief of staff with hakes galore and a party that is facing -- headaches galore and a party that is facing debacle in november, i think i might run for mayor in chicago. >> peter orszag, head of the budget process, is thinking of getting out protest as this commission comes along that is dealing with the budget issue, the head of the budget bureau -- that is not a good sign for the obama administration. >> he has family responsibilities, i gather.

[laughter] >> one of the interesting things about washington is how hard these jobs are and how they completely burn people out after a year. >> boo hoo. if you don't want it, stay home. >> no, i agree. let me finish people get up at 5:00 in the morning and they start doing their blackberries and never stop until 10:00 or 11:00 at night. these are people with children and spouses, and republican or democrat, you see this. it has nothing to do with money. it has everything to do with the survival of the human spirit. >> the more they work, the less they get done. >> if you are the kind of schedule, you want to be mayor of chicago. >> kind of a sad commentary. the immigration debate. >> illegal is not a race, it is a crime. >> this law would create wrote a

police officers detaining people -- rogue police officers detaining people because of the color of the skin, directly impacting thousands of families. >> the arizona legislature as a bill that would make it a crime to be in the united states illegally. senator john mccain, who along with the late senator ted kennedy once supported a path to citizenship for the nation's undocumented immigrants, now supports a crackdown. heavy stuff. >> what happened to senator mccain? he was at the center of a movement to do something rational about immigration. it was a noble thing, it failed, but represented the best in american politics. now teaches -- now he is pander crazy. this law is a joke. the cops can go around and arrested because you look hispanic is completely mad. >> you don't even have to look

hispanic. some cop does not like you, they just have to say, where are your i.d. papers? in this country, we have had a long tradition of protecting that idea. > -- of rejecting the idea. >> i wonder if that is coming, a national i.d., mark? >> i don't know, but arizona is a laboratory case, not an appealing one. it has given america a remarkable leaders, barry goldwater, the earlier john mccain, and good democratic governors, like janet napolitano. give it a certain serenity and balance. -- sanity and balance. the lunatics have taken over the asylum in arizona. the arizona house has passed legislation that to get on the ballot to run for president, you have to show a birth

certificate. >> as the only licensed psychiatrist on the panel, i am not ready to declare all arizonans insane. i reserve judgment on that is a laboratory in a sense, that part of the border has been fenced, but not arizona. a rancher was killed. it is under a lot of insecurity. what you're getting is an odd reaction. people are reacting inside of the states who want to enforce immigration laws on the inside, the interior, because the federal government is not forcing it at the border. doing it at the interior is problematic because it requires all kinds of invasions of privacy, and i am sure that the law proposed will not withstand constitutional scrutiny. but people are saying that if you do not stop them at the border, we have to do something

at the interior to it is not where you want to do something about immigration, in phoenix, but at the border. it is a scandal that we cannot agree it as a country to fence the border, because if you and stop illegal immigration, there will be a huge that a majority in the country which i will join in supporting amnesty. if this were the last batch of illegals -- but if the doors open and the border is open, the answer is no. >> if they were simple to do that, it would have been done a long time ago. >> you build a fence. >> i have been to where there are offenses. -- fences. >> violence on the border has been almost exclusively not somebody coming to get a job as a janitor or to work in a kitchen, but a drug-related.

that remains our major national problem, and a contributor to the violence. >> mexican drug cartels are serious problems, especially on the border with texas. >> and we are a hell of a market. >> and mexicans complained we don't control the kind traffic. -- gun traffic. no politician, democratic or republican, almost none, wants to be for serious gun control that would give more power to the alcohol and tobacco and firearms agencies, putting limits on gun dealers, who can buy an unlimited number of guns without going through a national check. this is a serious problem of the country to which there is an unserious answer. senator mccain looks sad to me.

>> as charles suggests, state- by-state activity in which they provide their own solution to the problem is almost inevitable. >> here is the hope, that it will be so bad, states will be so outrageous that it will force, finally, the federal government to do something intelligent. unintended consequences -- one is that we need to get more smart workers in the country. until we have immigration reform, we cannot get enough of these brilliant scientists who want to come to this country come from asia in particular, we need more of them, but nothing can happen until we solve immigration. >> we could have more of our own at home. >> that is a whole other problem. >> janet napolitano announced the cancellation of a project

for what was called the virtual fence, which i always thought was a loony idea. you build a chain link to one. in israel, people come in and kill. they built a fence. there are no terrorist attacks. these infiltrators are people who are determined -- they are not looking for a job in tel aviv. you build a fence and keep people out. it works, and that is why you get this extra infiltration into the other parts, because espies un -- it is unfenced. >> the reason she canceled the virtual fences because the pilot areas did not work well. i wished there were a silver bullet, but there is not. >> people climb over a fence, a

desperate you build a second, and have a a sand moat, and you have a river turning into a trickle. it is because it is open. you can drive our cross -- drive across. >> make no mistake about it, this law in arizona -- you are illegal if you are brown skin. it is an assault upon everything we hold dear in this country and that cannot be ignored. >> i don't disagree. >> taxation without representation, that is what my d.c. license plate says. >> our rights are trampled on because we cannot have democracy in the nation's capital. >> it is not a state trade is a federal city. -- it is not a state. it is a federal city. >> d.c. was going to get one.

but they put a gun amendments in their prepa. >> i would love to have a voting rights in d.c. but on the national priority skill, it is about eight zillion. >> you know all the ducks in the water in terms of the voting? that is us. not going to happen. >> it would be nice to be able to vote for somebody who represented me in congress. >> it was a brilliant compromise crafted by tom davis, a former republican congressman from virginia, and addressed that the united states is fighting for democracy and freedom in baghdad and kabul, capitals where they can vote for the leaders, and americans cannot their own nation, and more americans from d.c. have died in those wars and in korea and vietnam and world war ii than in southern -- seven

other states. >> d.c. used to be twice as big as aids. at the virginia side was returned -- and became twice as big as it is. the virginia side was returned and became part of virginia. you have the district be in maryland and have it for a senator and members of the house. it is the obvious answer, one that nobody will accept. >> in baltimore? last word. thanks, see you next week. for a transcript of this broadcast, log on to insidewashington.tv.

what did you do that for? i've been wondering whether i'd like it. what's the decision? i don't know yet. you can have another c you know what they are?