tv PBS News Hour PBS February 12, 2010 6:00pm-7:00pm EST
captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. new public opinion polls show another drop of confidence in those in charge of the government. >> brown: and i'm jeffrey brown. on the newshour tonight, we look at the latest numbers, and how they're impacting the political and policy landscape; >> lehrer: then, mark shields and david brooks offer their weekly analysis; >> brown: paul solman's reporting on goldman sachs-- tonight, how the firm used taxpayer money to make more money. >> goldman sachs recently was
borrowing between 100 to 150 basis points-- that's between one percentage point and 1.5 percentage points above what the government was borrowing-- in the aftermath of the greatest financial crisis since world war ii. that's incredible. it makes no sense. >> lehrer: then comes a preview of the winter olympics with reporter christine brennan in vancouver, where a training run proved deadly for one athlete today. >> lehrer: and the grit and determination of u .s. olympic snowboarder chris klug, taking to the slopes after receiving someone else's liver. >> they told me that one day i feeded a liver transplant. i will never forget, i was looking around, who are you talking to, you can't possibly be talking to me. i feel like a million bucks. >> lehrer: that's all ahead on tonight's "pbs newshour". major funding for the pbs newshour is provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change.
grant thornton a truly global and the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: there was new evidence today of rising public anger at washington. it comes as the midterm election year begins in earnest. judy woodruff has the story. >> woodruff: the nation's capital was frozen in place for real this week after the second blizzard in only six days. but around the country, growing unhappiness with washington has been heating up for some time.
it was illustrated this week in a raft of polls, from "the washington post" and abc news, and "the new york times" partnering with cbs news; and, most recently, today from the pew research center. it found approval ratings for president obama have steadied at 49% after falling for most of last year. ratings for his party kept sliding. just 48% of americans gave democrats a favorable rating, down 14 points from a year ago. but for the first time in years, republicans almost equaled the democrats, at 46% favorable, up six points from a year ago. the president has said people are frustrated at partisan gridlock, and his spokesman, robert gibbs, reinforced the point today. >> look, i can understand the frustration of democrats and republicans alike that, regrettably, the process of
washington has overwhelmed a series of ideas that the american people want to see on behalf... work for them on behalf of the cares and concerns that they have. >> woodruff: indeed, one of the most striking findings in the pew poll showed public opinion of congress as a whole has cratered. almost a third of those surveyed said they don't want their own representative re-elected this fall. that's the worst rating for incumbents in the pew survey since 1994, when republicans recaptured the house. still, a wave of house g.o.p. retirements has raised new questions about their prospects this time around. florida's lincoln diaz-balart announced this week he will not run again in the midterm elections, just 24 hours after michigan's vernon ehlers said the same. and late last month, indiana's steve buyer also announced he won't seek another term. that means republicans will have
18 open house seats to defend in november to 14 for democrats, including this one. >> now, having spent two decades in politics, my life is taking a new direction, and i will not be a candidate for re-election this year. >> woodruff: representative patrick kennedy of rhode island announced his retirement today after eight terms. his father, senator edward kennedy, died last year, so come 2011, there will be no kennedy in congress for the first time in nearly half a century. in the meantime, it remains unclear what congress can or will do this year to change voters' opinions. there's been some progress on a financial re-regulation bill. but health care reform is in limbo, along with climate change. and now, there's a new dispute in the senate over a jobs bill. >> we have a bipartisan bill that will create jobs, according to the cbo, immediately. >> woodruff: senate majority leader harry reid made that
announcement thursday, but just hours later, he dramatically scaled it back to a much leaner plan. democrats complained it would do too little, and some republicans said it's still too much. >> i'm concerned about how it's paid for. i'm concerned about loading it up with other extraneous provisions. >> woodruff: the senate takes up the jobs bill when it returns to work in ten days, after the president's day recess. now, for more on what the polls say and how that may be affecting the politicians, we turn to: andrew kohut, president and director of the pew research center for the people and the press; and chris cillizza, who reports on politics for "the washington post". thank you both for being here. andy kohut to you first, angry, is that the word you would use to describe the public's attitude? >> expectations were very high last year, that the obama administration would be the beginning of a new kind-- new way of working in washington. that hasn't been the case. 80% say they are angry or bothered by the gridlock.
but it's not only washington. in our poll what really stands out is how much tremendous personal anger there is at the banks and big financial institutions. this is and we have seen less support for regulation, the public makes an exception. 59% said we need more government control of the banking industry. and the ratings of wall street are at an all-time low. but you know, getting back to washington, it is on both of their houses. the republicans are making some gains but we find the majority of the people saying that the republicans and the democrats are doing a poor job of offering a solution to the problems. and when the economy is if bad shape, 10% unemployment, that is big stuff. >> woodruff: so this change that we commented on, the improvement for the republicans, how big a deal is that? >> well, it is important because the republicans have been-- those numbers have been low for a long time. people are beginning to forget the bush years but we
can't overanalyze it or overinterpret it because by, on balance they are still not very good. and the democrats have a better image on many issues. not most issues but many issues. but a smaller one than in the past. the republicans still have to make more progress to experience a wave of election riding the anti-incumbent senators that you mentioned in the setup piece. >> woodruff: chris sill how do you see these polls and how do they see them, democrats and republicans? >> i think most democrats in the wake of scott brown's victory in massachusetts, in the special election to replace ted kennedy, i think that they think if it can happen in massachusetts, it can happen almost any where. obviously massachusetts one of the most democratic states in the country. to andy's point about republicans making gains, i think some of the gains here are what i would describe as
being the other guy, which is people aren't happy with washington. they know democrats are by and large if control, president in the white house, control of the house and senate. republicans just happen to be that other guy. so if you aren't happy with the current state of affairs, maybe you turn and give the other guy a chance. divided government rules the last decade. all the way up until about 2006, people wanted divided government. in 2006 and 2008 the revulsion with george w. bush, the desire to radically change things led to huge gains, 50 pus seats in the house, 15 plus in the senate for democrats. we may be returning back to that era. >> woodruff: so you looked at these polls in election years in the past and we are ten months away from november mid term. are these numbers that are likely to hold up? >> you know, you really can't say. it could be that they will hold up and we'll see republican gains. the question is are they the kind of gains that the
democrats may be needing when reagan was facing the same kind of problem, there was a lot of frustration with him or will this be '06 or '94. one of the real issues here is barack obama. his approval ratings are still reasonably high given all of the frustration we have had, at about 50% for a very long time, even though most people now say they don't think he's trying hard enough on the economy. there are a number who say he is doing-- making things better is equal to the number who say he is making things worse. as long as his numbers stay up, the democrats have a chance of avoiding that nature of calamity. >> woodruff: and again, chris, as you talk to members, what are these numbers saying to them as they plan their campaigns for re-election? or as they try to get fellow party members elected. >> you know, judy, i think you always go through this decade in every election. is this a national election or a local election. it's going to be decided on
a bridge project in a member's district or is this a referendum on the president. i think the white house leads, republicans lead, this a national election. i know for a fact the white house is sticking to their guns. their message as been you are going to be labeled an obama democrat whether you like it or not. many of these districts. the only option that you have to be able to go and tell a positive story, say you sent me to washington to change things, to get things done. i got things done. the complicating factor with that, the biggest priority the president has spent the last year on, health care, isn't done yet is that many democrats including people like blanch lincoln in arkansas, michael bennett in colorado who are nervous about going back into a vote like that. >> so what can they say to the public given that, andy kohut. >> well, they have to be positive. what our poll finds is that while most people continue in plurality to oppose the health-care reform bill, when we ask people do they want the republicans-- do we want the government to drop it, most people say, you
know, keep work on it. only 25% say let's drop it. there is a desire to see change across-the-board in health care. >> woodruff: which raises the question, where does all this leave bipartisanship. the president said we've got to work together. there have been a few sort of halting efforts at that this week but are we, i mean, are we going to see members who see it is in their interest to work with the other party? >> i think, i always say once the year turns even, that is an election year, are you less likely to see any major legislative accomplishments bipartisan or not. i think that republicans made a bet early on in 2009 that opposing this president's agenda was the right move politically. they i think also believe it is the right move from a policy perspective but it was the right move politically. they're going to look at numbers in the pew poll, they are going to say you know what, this seems to be paying dividends. i can't imagine you would
see a broadscale bipartisan effort on any major piece of legislation, health care, energy, simply because republicans have spent a lot of tim and energy in saying we have a different vision, we are not supportive of where this president is taking this country. >> the problem is the public doesn't get the republican vision. they don't know what they stand for. and it comes across in our polling, in any number of ways. and the issue is how far can they really get if they done become associated with a particular, what is seen as a particular constructive idea. again, 60% say the republicans have done a poor job of offering solutions. >> but the public still saying we want to see the two parties working to. >> absolutely. and when they are asked about who is to blame for this more of them cite the republicans than president obama a tord-- according to the cbs "new york times" poll. >> the one thing i would add is that special elections are about passion and energy. the republican base is the place where the energy and
the passion is, you could argue that it is actually the tea party movement which is not necessarily of the republican base. but there a more energized republican base than a democratic base. that leads the potential for a real turnout disparity. these are not presidential year turnout. the midterm turnout is lower. and it matters. >> woodruff: we have ten months to go. lots of time to think that about it, thank you chris cillissa and andy quo hut, thank you. >> brown: and still to come on the newshour: the analysis of shields and brooks; the profitability of goldman sachs; a preview of the winter olympics; and the comeback story of one vancouver hopeful. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: former president bill clinton returned home today to chappaqua, new york, following a heart procedure. he left a hospital in new york city this morning, after an overnight stay, and waved to reporters as his motorcade departed.
on thursday, doctors placed two wire-mesh stents-- like this one -- in one of mr. clinton's coronary arteries that had been clogged. the former president had quadruple bypass surgery in 2004. three people were shot and killed today in the university of alabama in huntsville. the university spokesman said the shooter was in custody. a institute report of the gunfire reported in a biology faculty meeting and a trustee of the school told a tv station that a professor had just been denied tenure. much of the deep south was paralyzed today by a rare snow storm. it stretched across at least half a dozen states. the snow fell from texas to coastal south carolina, in a part of the country least equipped to deal with it. starting on thursday, the dallas-fort worth area had more than a foot of snow. that made it the whitest winter there in 32 years, and the effects were evident. the roof caved in on this tire
warehouse in west dallas from the weight of the snow, but there were no injuries. elsewhere, the snowfall was lighter, but its effects were still crippling. parts of alabama had a dusting up to two inches, and authorities urged commuters to stay off the roads. in georgia, poor visibility from the storm wreaked havoc at the world's busiest airport, hartsfield-jackson-atlanta, canceling more than a thousand flights. but children across the deep south reveled in the snowy scenes they rarely get to see. farther north, thousands of people began returning to work after back-to-back blizzards. federal agencies in washington opened for the first time this week, and most mass transit service was restored. the storms have wiped out airline schedules this week, but their on-time performance last year was the best since 2003. the transportation department reported today 80% of all flights were on time in 2009. in addition, the rate of baggage being mishandled was the lowest since 2004.
this was a day of mourning in haiti, one month after the earthquake that devastated the country. parishioners of all faiths convened in front of port-au- prince's collapsed national palace, joining together in prayer and song. nearby, catholics took part in a mass outside the city's destroyed cathedral. the catholic archbishop of port- au-prince was among the quake's estimated 200,000 victims. there was word late today that thousands of u.s. marines and afghan troops have launched a major assault. the target was marjah in helmand province. it's the largest town held by the taliban in the region, and a hub for the opium trade. civilians jammed roads in the region today, trying to escape before the offensive began. in iraq, the campaign for parliamentary elections has officially begun. campaign workers took to the streets today, covering baghdad with posters and distributing political handouts for the march 7 vote. overnight, an appeals panel reinstated a ban on hundreds of candidates who were suspected of ties to the saddam hussein regime. president obama may help choose
the site for the trial of khalid sheik muhammad, the man accused of planning the 9/11 attacks. "the washington post" reported today the president has intervened in the selection process. it cited unnamed administration officials. white house spokesman robert gibbs played down the report, and he said mr. obama has not given up on the original choice, new york city. >> he's the commander in chief, obviously he said that he had not ruled it out; that we would take into account the security and logistical concerns that had been brought forth by new york city. and those will be, as he said, taken into account before a final decision is made. >> sreenivasan: state and local officials in new york have urged the trial be held elsewhere. and attorney general eric holder said it could still be moved out of the federal courts entirely and back to a military commission. wall street had a rough day. stocks fell on new concerns that
bank lending curbs in china will hurt recovery in the u.s. the dow jones industrial average lost 45 points to close at 10,099. the nasdaq rose just six points to close at 2,183. for the week, the dow gained about 1%; the nasdaq rose 2%. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the newshour's web site. but for now, back to jim. >> lehrer: and to the analysis of shields and brooks-- syndicated columnist mark shields and "new york times" columnist david brooks. >> lehrer: david, how do you read the polls on people not going really strong for the government right now. >> it is the-- it's like an emotion. it like a character, it like an issue in the country. to me the dominant issue. because if you have these incredibly my levels of distrust, you can't do anything big. the country will not trust you to take a leap of faith,. i said before in years past on this show, that the single biggest poll number in american history is do you trust government to do the right thing most of the time. between 1932 and '64 you had high levels, 70, 80%, so
people would trust waferb ton to take that leap of faithment but starting about vietnam, watergate era it went down and now we are about 17, 19, 23%, near or at historic lows. and that's just a gigantic climactic force which sort of paralyzing washington at the same time people want change. >> lehrer: mark, do you agree with those that say that a part of this right now is the economy, 10% unemployment and all the rest? >> oh, i think the economy drives it, jim. i think the biggest concern that voters express is they want jobs. they want the government to do something about jobs. and they are concerned about unemployment and the economy in general. those override everything else. >> lehrer: to pick up on david's point, who cited watergate and vietnam, those were actions where people did things wrong. there is no corruption attached to this, downside in the polls in terms-- it a governing problem, right. >> it really is, and david is right. i mean we were talking in
the early to mid 60s right up until vietnam started to go sour and go south. 65, 70, 75% of americans having confidence not only in their own future but in the government to do what is right. and vietnam and the dissembling and lying and deception on that, followed by watergate. but this is-- this is sort of a new depar ture. and really, an unnerving one, jim, bus as you point out, there isn't any scandal. there isn't any corruption. there isn't any great deception that the government has been guilty of or proven guilty of. and it's just the failure of the economy. within 27 years, and i think 28 years since 1982, with really the bumps in the early 90s, first george bush, we have had low unemployment and low inflation.
and this is you know, a major, major depar ture. >> the era between 3ee and '65 was the depar ture, that americans through the 19th century and 18th century were extremely skeptical of government. then we had like a 50 year period mostly because of franklin roosevelt where people invested trust in government and that was the exceptional period. and now we are back to a norm. but then if you take a smaller time frame, what have we seen? we've seen americans, we've seen washington try to solve social security reform, immigration, probably health-care reform. it's been one failure after another. and then there's been just the behavior we have up here which is dysfunctional. and then finally, i think as we pass more transparency legislation, trust in government has got earn worse. >> lehrer: what do you mean, because people know what is going on. >> right, i mean a friend , friend,-- clinton domestic policy advisor has a line, government should be
shrouded for the same reason middle-aged people should wear clothes. you just don't want to see it, necessarily. and i think as people have seen it more closely because of transparency and because of tv, oh, i don't like that very much. >> can i add one thing to that, jim. it's not a defense. i think it is an addendum. and that is we have had now a series of presidential candidates, most liberal and conservatives, democrat and republican who have won the presidency by running hard against washington. certainly bill clinton called washington brain dead, said that, you know, couldn't function enduring many members of congress when he said that, as a candidate. and then george w. bush, you know, talked about washington just being this place that didn't make any sense, and that we had to bring the common sense to washington, and certainly president obama as a candidate, you know, was critical of washington. there's been nobody to
celebrate the successes of our government whether it is taking the fear out of old age for people, providin providing-- taking one-third of the people over the age of 65 out of poverty which it has done through medicare and social security. whether it is saving the great lakes, taking lead out of the air. there-- nobody seems to have a stake in celebrating the successes that we've had as a people, overcoming racial segregation remarkably well. we have some great achievements but there has been very little celebration of those successes. >> lehrer: david, how do you, looking at these polls and picking up on something that andy said, how do you explain the fact that while the government generally, and congress specifically is falling with the public. some of these folks said i don't want my member of congress, my senator any more period. i don't care if he is a republican or democrat. that president obama's approval rating is staying pretty fairly steady. >> partly because he has risen above washington to some degree. >> rooney: so he-- . >> lehrer: he has been
successful in doing. >> even when he talked to the republicans a couple fridays ago, he sort of said, you know, you have to work together. one of the big losers in that meeting what nancy pelosi. and he has sort of risen above washington as a reasonable figure. and i think people generally like the fact that he seems intelligent. he seems to have reached out to republicans much more than republicans have reached out backward. so there still is, you know, he doesn't have the approval rating he had a year ago t has fallen to 40 from 50, 60%. but it is still, he decent and i think it is a factor that he seems reasonable and intelligent. he does not seem caught up in a lot of the partisanship that the rest of the place does. >> lehrer: his fellow democrats. >> exactly. >> lehrer: dow read it the same way, mark. >> i don't, jim. in fact, i think, i haven't run into anybody who thought the casualty at the baltimore meeting was nancy pelosi. it was house republicans. president obama just dominated them. and his command of the facts and information and rebuttal of their arguments was
really quite telling. but i think that one of the reasons that he continues to remain are those personal qualities that people do identify, they do like him. and they do see his success. and they are rooting for him. they want him to succeed. i mean they don't want jim dement, senator from south carolina, to see waterloo at the end of his presidency if health care goes down. people may be opposed to health care, but they don't want this president to fail. they don't want the country to fail. they identify, i think, his presidency. and in that sense he is seen as a person of not only considerable ability but good motives and intentions. >> i agree with that. but i would say for him is he has to take the trust issue and realize he needs a trust agenda. you have to have an economic agenda, and health agenda. but trust is an issue that has to be addressed directly by the president which i think is part behavioral, showing you can make real , bipartisanship. but second passing some
small bills along the way to show people that washington actually does stuff now to begin to restore that level of trust. because if you don't do that, the larger issue just will be very hard to address. >> lehrer: how is a small thing in some ways but how large was the issue, for instance, of the alabama republican senator shelby when he put an arbitrary hold on 70 obama appointees. what -- >> what boggles the mind now is we are all now acknowledge the tremendous hostility of washington and the standard operating procedure here. and yet people in washington are still behaving in the same old ways, shelby behaving, really stopping the legislative process for one man's fork. >> lehrer: two projects in alabama he wanted funded. >> right and frankly we have the job bill where you had a bipartisan compromise between-- and baucus t was bipartisan but when you look what was in the compromise that too was a silver fork which had nothing to do with job creation. that was politics as usual.
and that wasn't even good enough, harry reid came over and said i don't want a bipartisan agreement. i want something a little more partisan so we had bad bipartisanship replace-- so what you see day-by-day is why people are angry. because the ingrained habits of behavior are still going on. >> lehrer: mark, before we go, two well-known members of the house of representatives, one present and one past died this week. jack murtha from pennsylvania, you knew him very well. what are your thoughts about him. what do you think his legacy should be or will be? >> well, jim, all of us in this business try to be objective. none of us can be, but we try to be fair. and i admit right up front, i liked and admired jack murtha. he was a marine in the best sense. somebody who left college and a college deferment, enlisted to korea at the age of 19 and at the age of 33 with three children, exempt from having served, he
returned to vietnam where he was awarded two purple hearts and a bronze star. he walked the walk and talked the talk. he always was somebody who followed that dictum and that maxim of every marine officer, that is you take care of your people. officers eat last. he took care of his people. and in the field, he was eating the e-4s, the noncome, he wanted to find out how their food was, how they were treated, you ho their equipment was, how their protection wasment and he took care of his people back home. in johnstown, pennsylvania, an economically troubled place. and listen, he got every buck he could, public and private in there. he was no plaster snake but every week he was at bethesda naval hospital, the walter reed, visiting, comforting, consoling and encouraging wounded warriors, just that kind of a guy. he will be missed. >> lehrer: but david, he had
another, he had a king pork -- >> i didn't know him but he existed at the nexus between pork and lobbyist. and he was part of the process and he did get billions or trillions for jouncetown but did it for the process that created the earmark, the culture of pork in washington i which i think is part of the problem. and the ekd thing this a policy matter, he became a big tir in 2005 calling for withdrawal of u.s. troops from iraq. i thought at that time that was mistaken policy and i think history has proven it would have been a mistake. >> lehrer: the other charlie wilson. we have to go, mark, i'm sorry we didn't have time to talk. i happened to know him. covered him in the texas senate many, many years ago when he first came to the housement i called him good time charlie. he had a big role in the afghan fight the russians years ago. he was a naval academy radiate. when he was a kid, senator and i was a kid reporter, thank you both very much.
>> brown: now, "goldman-sachs, part two." last night, newshour economics correspondent paul solman examined how the wall street investment firm makes its money. tonight-- the government's role in the company's success. it's all part of paul's ongoing reporting, "making sense of financial news." >> reporter: goldman sachs new headquarters, across from where the world trade center once towered. to help foot the $2-plus billion construction bill, goldman got new york city and state to bless a $1.65 billion tax-free-- so- called liberty-- bond issue, plus another $66 million in job grants, tax exemptions and energy discounts. and yet, the same firm just reported the most profitable year in wall street history, channeling most of the money to pay salaries and bonuses, even after a year of horrible pr which saw goldman and its ceo,
lloyd blankfein, vilified... >> everybody got that now? >> reporter: ... by everyone from passersby commenting on painter geoffrey raymonds portrait... to glenn beck on the right, blasting their profits: >> goldman sachs up 65%, even though they took over $10 billion in government aid. >> reporter: ... to jon stewart, with almost exactly the same skepticism from the left. >> goldman sachs will have a profit that we estimate at about $12 billion last year. >> let me see if i've got this straight-- the only people who have fully recovered from the financial meltdown are the ones who caused the financial meltdown. >> reporter: in a recent newshour story, experts explained how goldman made most of this money-- by trading for its own account. for details, you can watch or read the story online. but this story is about the claim that goldman has been getting most of the money to trade from you and me, via our government.
nomi prins, a ten-year veteran of wall street trading, left goldman after 9/11. >> first, of course, they received $10 billion in tarp money. and even though a year later, they can say, "we didn't really need it," they really needed it. >> reporter: lets go back to the panic of 2008, says mit's simon johnson, former chief economist at the i.m.f., who's working on a book about the undue influence of wall street. >> goldman sachs and morgan stanley had a problem, which is they were about to fail, and everyone felt that this was coming and they couldn't borrow easily from the fed because they weren't banks. >> reporter: then, the authorities had a vision of salvation, according to johnson. >> and they said, "aha. we'll turn them into bank holding companies so they get... they have access to this cheap money from the fed. >> reporter: bank holding companies own or control one or more u.s. banks. though no one from goldman would give us an interview, c.e.o. blankfein recently told the financial crisis commission that the firm wasn't necessarily on the brink after lehman brothers collapsed in mid-september 2008. >> that weekend, when we became
a bank holding company, the next day, we capitalized ourselves, in part, privately, with warren buffett. and the day after that, we did a capital raise for $5.75 billion, which you could have made a lot higher. we had access to the capital markets, and we could have made it more, and we weren't relying on that government help. >> reporter: but others are dubious that goldman could have raised so much money without government help. >> you don't go to the fed on a sunday night and say, "i really need to become a bank holding company now, because i want to help out all my competitors." you go because you need capital and this was a way to do it. >> reporter: because the government could only give them money if they were a bank or a bank holding company as opsed to an investment bank? >> right. >> and basically, if you hold securities or anything else-- i think including your car if you're goldman sachs, at this point-- you can take that to the fed and mortgage it and use it to get credit. and then all your liquidity problems go away, and actually a lot of your solvency problem goes away as well, because people really start to believe
in you again. >> reporter: investment advisor jeff macke, however, thinks it's unfair to single out goldman. >> the entire system was teetering on the brink. when you get a tidal wave coming, it doesn't discriminate between the sinners and the winners; its going to drown us all. when we bailed the system out, we saved main street as well as wall street. we didn't just save goldman sachs. >> reporter: no, we didn't. but saving goldman by giving it access to money is only one thing the government did. >> and the other thing is, because they were a bank holding company, they now would receive ultimately f.d.i.c. protection, in terms of guaranteeing new debt that they would be able to raise. >> reporter: indeed, goldman has raised $28 billion in the past year, enough money to pay back tarp. problem is, the money is at least implicitly guaranteed by the government. so, why should we average americans be responsible for goldman's fate? we asked defender jeff macke. it doesn't bother you that they are too big to fail and, therefore, we, the u.s.
taxpayers, have to bail them out, if push comes to shove? >> they're not too big to fail; they're too good to fail. wilt chamberlain said it best when he said, "nobody roots for goliath." everyone is out to get goldman sachs because they're the best. they make money and they survive in this environment when other people aren't. >> reporter: goldman investor warren buffett told bloomberg tv that he agrees. >> i'm very happy with the way goldman has performed. they have... the place is very well run. >> and with the way blankfein has performed, you're absolutely satisfied. >> oh, i don't think you could have had a better manager than lloyd blankfein. >> reporter: "but wait," says -- "not only did we provide tarp money and a guarantee, the government also bailed out a.i.g., which owed goldman sachs $12.9 billion." >> had the government not
propped up a.i.g., goldman sachs would not have gotten that $12.9 billion. if goldman hadnt received the money indirectly through the a.i.g. bailout, goldman wouldnt have the year that it had. >> reporter: and what are the >> in its wisdom, the federal reserve has driven interest rates down to 10, 15, 30 basis points, so their cost of funding is zero. >> reporter: so you mean goldman sachs borrows money from the federal reserve at a tenth of a percent, a quarter of a percent, takes that money, invests in us treasury securities at 3.5%, 4%... >> 3.5%-- exactly. >> reporter: and they make the money just... >> on the spread. >> reporter: and the money is simply being recirculated from the fed back to the treasury? >> that's exactly right.
>> reporter: but mainly, goldman raises money privately, through the markets. and because the fed is keeping interest rates so low, that private money is also very cheap, as long as the markets think the government will never let goldman fail. >> goldman sachs recently was borrowing between 100-150 basis points-- that's between one percentage point and 1.5 percentage points above what the government was borrowing-- in the aftermath of the greatest financial crisis since world war ii. that's incredible. it makes no sense, unless goldman sachs is almost as good a risk as the u.s. government. then, it makes complete sense, and that's what the market is saying and the market is thinking, and the market is right. >> reporter: and so it can borrow at 1.5% interest for short-term money, make bets with that money, and if they pay off, it can make a fortune and pay big bonuses? >> yes, absolutely. make money, get the bonuses, take the money and do it again. don't even bother running because nothing's going to happen to you. >> reporter: or as david stockman puts it: >> there has never been more of
a... you know, easy money scam that i can remember in modern economic history. >> reporter: "but hey," says former hedge fund manager jeff macke, "in the end, if this is a problem, it's the government's, not goldman's." >> amen-- that's exactly how it works and that is a problem. you're pushing on a string if you're just going to give the banks free money and expect them to do anything other than that which makes them more money. how do you fix that? well, you can either make a bunch of laws as thick as a phone book or you can raise interest rates, stop giving the banks free money. >> reporter: a bunch of laws or higher interest rates-- not an especially attractive option for goldman sachs, and currently the subject of considerable debate in washington. the olympic games are upon with us the opening ceremony tonight. the focus has been on the
weather and the last minute preparations for the city and athletes. today though that was overshadowed by the death of an athlete from the nation of georgia, died after a crash during a training run in the men's luge competition. >> it is difficult to remain composed. this is a very sad day. the ioc is in deep mourning, here you have a young athlete who lost his life in pursuing his passion. he had a dream to participate in the olympic games. he trained hard. and he had this fatal accident. i have no words to say what we feel. >> reporter: we talk about that and more now with veteran olympic reporter christine brennan columnist for usa ted and commentator for abc news an espn. christine, welcome again. for more olympics coverage. the luger's name was nodar kumaritvashili. what more can you tell us about what happened?
>> this is a tragedy. and jeff, i've got to tell you, this is my 14th olympic winter and summer going back to l.a. in 1984. and i don't remember something like this happening on an opening ceremony's day. the opening ceremonies the ultimate of highs and excitement. and the preparation of a city for seven or eight years now finally come to fruition. and to think that this news is, of course this tragic story of a man's death. and then that this also would be the news of this day. it puts a damper on this city that no rainstorm could equal. and i really feel, of course first of all for the athlete, his family, the georgian team, but i also, i wonder what this will mean in terms of the games and as an omen, maybe, as a harbinger, maybe, it also just something that people now will remember, that this happened a few hours before the opening ceremony started. >> this luge competition, it has got some notice for precisely this. this was a very fast track.
and there were some safety concerns. >> jeff, you know, these are the games of ice and snow. and it is it skates , blades, skis, sleds t is what we want to watch on tvt is exciting. and it is different. and that very thing, the need to have speed and the need to increase speed and to push the limits in so many different sports, it will certainly in the days ahead be looking at this as journalists and as the ovxs check and see what went wrong. but the fact that this track was being discussed as being too fast by competitors, and now a man is dead, my goodness. that is a huge story on the world stage. and again at the exact wrong time from the organizer's perspective. and again, a tragedy of monumental proportions for the family and all the people in the entire luge community. they don't get much attention. and to be in the news this way it is horrible. >> now what about that other major story line that has been going. and you mentioned it, i mentioned it, the introduction. the weather, a lot of rain and not enough snow, i
guess. >> well, of course i'm based in washington, d.c. and i flew out in between snowstorms on sunday night. i think i should have packed pie carry on bag with some snow for vancouver, obviously. it is extraordinary. this is like an early april day on the east coast, or in the midwest. it's 45 to 50 degrees, there's rain. it's gray. it's fantastic weather with what is going on in the rest of the country, or the rest of the united statesment but it's disarming. and here vancouver, the ioc picked a moderate climate. they picked a temp erat climate. they knew what they were getting. it was a roll of the dice, when you roll a dice and pick a chime at that is warmer on the pas civic coast, this is potentially what you could get. i think in many ways it is the worst situation possible from the standpoint of the the quaintness of the winter olympic approximates. when people tune in they want to see snow. obviously snow on the mountains is a beautiful sight, it is a great thing. and right now cyprus mountain where the snowboarding and freestyle
skiing will be that is where they are trucking in the snow. hundreds of tons of it a day. and that's embarrassing, frankly, for a winter olympic city, no matter how great vancouver s this is an embarrassment. you don't have snow and you are the winter olympic city that is stuff. >> they just announced late today that they are postponing the first women's ski event. now all of this must be disrupting things for the athletes. but in this case, it helped one of the premier athletes on the american side, right. >> that's right, lindsey vaughn, obviously the cover of "sports illustrated", the athelete, if you have tuned on your television set or any commercials you probably have seen lindsey vaughn, the greatest female skier on earth, overall champ, and could win as many as five medals here, more likely maybe three. she would love to one one gold or two, but maybe threement but she has a very bad shin bruise. she fell in a training run in austria about a week and a half ago. and she wasn't, hasn't been able to ski since that time.
and hasn't been able to put her boot on, her ski boot on for a couple of days because of pressing against that on her shin really hurt. and so this has been a terrible turn of events for lindsey vaughn. any time she gets, any more days she gets to push things back is a blessing for her. and the fact that the weather is bad up on whistler and they are pushing things back could be very good news for lindsey vaughn. >> now there are too many other athletes for us to talk b there has been the interesting story about the canadians pushing harder for medals on their side, this time. are you a veteran of these things. what are you looking for? >> well, i think i always end up with the figure skating venue, jeff, which is where the soap opera is occurring and it has already started. there was a flame, the cald ron hasn't been lighted yet and yet already figure skating is in full throttle with the russians, east, west, the cold war is over but it is alive and well at the figure skating venue. plushenko, the men's
defending olympic gold medalist coming back, trying to win again. the russians are very concerned. i had a story yesterday about the russian being very concerned about any criticism of him and wanting that deleted from educational videos for the judges. a lot of back and forth about whether he is artistic enough or not. this is going to be fascinating because in the men's event. normaly we talk about the women. men's figure skating, eight men could win the gold medal. plushenko do be first, 7th or 8th. i have never seen a feel that deep in figure skating especially on the men's side. >> christine brennan from vancouver, thanks so much. and we hope to check back in with you sometime over the next couple of weeks. thanks. >> you bet, jeff, thank you very much. >> lehrer: and finally tonight, an olympic profile. newshour correspondent tom bearden reports on a snowboarder who beat the odds to make it to this year's games. >> reporter: the snowboarder emerged from the fog at aspen highlands, groaning with the
effort to carve tight turns around the slalom gates on the steep hillside. this is 37-year-old chris klug, training for his third olympic games. klug has been riding since he was ten, one of the pioneers of the sport. he was there in nagano, japan, in 1998 for the first olympic snowboard competition. he placed sixth in the giant slalom. but there was a cloud hanging over him even then. >> i was diagnosed in the early '90s through a routine physical, and after we finally pinpointed what it was, they told me that, one day, i'd need a liver transplant. and i'll never forget when they told me that. i was looking around the room, going, "who are you talking to? you cant possibly be talking to me. i feel like a million bucks. i'm out there riding my snowboard, doing all these fun cross-training activities and i feel great." >> reporter: klug's liver continued to deteriorate after his first olympic appearance. his wife missy remembers. >> chris was on the transplant waiting list at a critical stage for three months. but he was on years before that-
- they just kind of move you up as you get sicker. so watching him get sick was really tough, because he's so active, so energetic, so positive. and to see him kind of lose a little bit of that was tough. >> reporter: by 2000, klug and his doctors realized they couldn't wait any longer. >> and i did everything in my power to get ready for that surgery. but then, when i finally got the call, i wasn't quite as confident as i had been in the months and weeks leading up to it. i was scared for the first time. i'll never forget when i was in the pre-op room and the anesthesia was about to take effect and my family was in the room with me. i was looking up at them going, "am i going to make it through this?" it was scary. >> i definitely was kind of the strong person going through this whole process, and always positive, and you know, didn't want to give him any bleak outlooks or possibilities of death or anything. but you know, it's in the back of your mind. and when he was rolled away for
surgery was really the first time i completely broke down, and just hysterically lost it. and i thought in my mind, it was like i might not see him again. >> after i woke up from that six-hour surgery, that a new engine got dropped in me. it seemed like i was running around with a four-cylinder and i got a brand new v8 dropped into me, and i wanted to go out and test drive that new engine right away. i remember being wheeled out of the surgery, and when i finally woke up, i was on the recovery floor there and i had both arms in the air yelling, "i rule!" and it was a bizarre thing to say, but that's how i felt. and i knew i was going to make it back. >> reporter: but most people thought he would never ride a snowboard again. klug proved them wrong. he was back on the slopes only seven weeks after the surgery. in 2002, he took the bronze medal at the salt lake city games. rob roy is klug's longtime coach
and mentor. what changes did you see in him after the operation? >> well, it's incredibly dramatic. i suspect that chris was suffering from his disease for a number of years before it was diagnosed. he probably weighed 160 to 175 pounds, had a hard time eating. but now, here's a guy who's had a liver transplant who weighs 220 pounds. his body fat is so low, it's incredible, so we're talking about muscle mass only. it's all been muscle mass. he eats huge meals and eats them at a relatively normal pace. and he's fitter than he even was. >> reporter: since his recovery, klug has started his own foundation focused on educating the public about the importance of organ and tissue donation. earlier this week, klug was winding up his preparations for the 2010 olympics under rob roy's watchful eye.
>> make sure you get there. don't sink so low that you can't come up off it. just go, go, get it, go. >> reporter: but like a lot of times in his long career, klug had to climb one more giant hurdle before he could make this year's olympics. he didn't make the 2006 games because of a dispute over olympic qualification rules. he spent the last four years training and competing with the expectation of returning to olympic competition in vancouver. but last year, klug slipped to 25th in the world rankings. the u.s. ski and snowboard association announced it would no longer provide him with financial support, thinking he wouldn't qualify for the games. >> initially, i was shocked. after i had just won the national championship last spring, i was one of only two riders to have olympic discipline. and it was really surprising to me and i was kind of frustrated and disappointed.
but then i think i got together with my teammates and i was really determined to make the most of it. >> reporter: so klug started his own team. >> and i think chris realized that maybe there is more than one way to skin a cat when it comes to getting snowboarders to the olympics. and so he, as you know, went out and found sponsors, hired coaches including me, and put himself on the olympic team one more time. >> reporter: this year, klug finished high enough in the five qualifying races to earn a spot back in the olympics. >> its a miracle when you think of where he was and what he's been through in the last years. here's a guy who last year was probably ranked 25th in the world, something like that. now, he's ranked in the top ten, and frankly i believe he's riding like he's in the top five. is he a dark horse? yes, but we love it that way. >> reporter: on monday night, the town of aspen threw a sendoff party for klug and the six other local residents who will compe in vancouver. whatever happens there , klug plans to continue competing on the world cup circuit until the
end of the season. after that, he says he'll think about hanging up his board and retiring. >> lehrer: again, the major developments of the day: white house officials blamed partisan gridlock for new polls that show rising frustration with government; and in afghanistan, the u.s. military announced u.s. marines and afghan troops have launched an assault on a key taliban town. the newshour is always online. hari sreenivasan, in our newsroom, previews what's there. hari. >> sreenivasan: find the full report on voter attitudes towards government from the pew research center. our olympics coverage continues with a web-exclusive interview with chris klug's coach about what it took to get back into olympic shape after his liver transplant. all that and more is on our web site, newshour.pbs.org. jeff. >> brown: and that's the newshour for tonight. i'm jeffrey brown. >> lehrer: and i'm jim lehrer. "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 and good night.
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