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MATTHEWS: I hope you get a deal together so much.
CORKER: Thank you. Thank you.
MATTHEWS: I think the country needs some action.
Senator Judd Gregg of New Hampshire joins us right now. He sits on
the Banking Committee as well.
Senator Gregg, let me ask you about this.
I--I watched Geithner this weekend on "Meet the Press," I--what I
lack--what I see there is a lack of passion. I don"t sense a guy who is
willing to really go at the bad guys. I mean, I would be angry--well, I
am--that there"s so much genius. These guys should be physicists. They
should be Nobel Prize winners. And they take their 190 I.Q.s up to Wall
Street, and they figure out clever instruments they can use to make a
billion dollars for doing nothing, except steal it.
Does that bother you, like it does normal people?
SEN. JUDD GREGG ®, NEW HAMPSHIRE: Of course. Nobody wants anybody
to be stealing stuff.
But I think the core question here is, can we reach a bipartisan
package? And I think Senator Corker has outlined it pretty effectively.
Yes, we can. We--we actually--Senator Corker is working on one
section, resolution. I was working on another section, derivatives, with
Jack Reed of Rhode Island.
We were basically there on an agreement and then this all got very
political very quickly, unfortunately. You heard the president"s comments
and response on our side. That"s not constructive.
My suggestion is this. Let"s step back, take a mature and thoughtful
approach to this. I think you"re right that Chris Dodd would like a bill,
and he would like a constructive, bipartisan bill. And let"s take the
second--sections which have pretty much been worked out, the four major
sections, consumers, how you reorganize the regulatory agencies, resolution
authority, and derivatives, and work off those sections and get it done and
get--get something the American people can say, hey, these guys worked
together and they produced something that"s going to hopefully reduce the
chance of a systemic-risk event occurring again.
MATTHEWS: Can you ever get as smart as the guys on Wall Street to
stop them from doing these abuses? Is it possible to write regs that work?
GREGG: Well, it would be foolish to try to do that, because you would
get much too into the detail and get too literal, and you end up inevitably
creating unintended consequences.
What you want to do is, make sure you create a structure where, first,
the regulatory agencies have the authority and the flexibility to step
forward when they see something that"s amiss...
GREGG: ... and, secondly, have a market that has the information--
in other words, transparency--and also has adequate liquidity and
capital, so that it disciplines itself to some degree. Those are the two
keys to getting that done.
I don"t--I don"t think specific, targeted regulation would ever
accomplish it, because, as you say, there are a lot of smart people out
there who can figure out how to get around that stuff.
Is there any more Teddy Roosevelt in the Republican Party, trust-
busting reform on Wall Street, that kind of thing We all grew up loving?
We all love Teddy Roosevelt because he was tough on these guys. Is there
still that spirit in the Republican Party? Or has it gotten too bourgeois?
GREGG: Gosh, I didn"t know you were that old, Chris, that you grew up
with Teddy Roosevelt.
MATTHEWS: Oh, come on. You mock me.
GREGG: I heard earlier that you were a socialist.
MATTHEWS: I know.
GREGG: And now I have learned two new things about you.
MATTHEWS: Yes, along with J. Edgar Hoover. I"m in really tough
GREGG: The actual--the initiative here from our side of the aisle
is to end too big to fail. I mean, that"s--we--our basic concerns with
the Dodd language, although they have been, to some degree, hyperbolized,
is that it does not clearly end too big to fail.
The markets cannot work effectively if there"s a concern--or if
there"s belief or concern that the taxpayer will come in and support some
company that"s in serious trouble. That just shouldn"t happen. There
should be absolutely--it should be absolutely clear that, if a company
gets into trouble, it"s going down, its stockholders are going to get wiped
off, its unsecured bondholders are going to get wiped out, and it"s going
to go through some sort of resolution, probably a bankruptcy situation,
where it doesn"t come back. It just gets broken up.
And that"s basically our position. It"s basically the Corker-Warner
proposal. Unfortunately, the Dodd bill did not--did not incorporate the
Corker-Warner proposal in totality. And it should have if it wanted to get
to this issue correctly, in my opinion.
MATTHEWS: How does somebody make a billion dollars because he plans
for another--other people to lose a billion dollars?
I"m looking at this scandal where this company, Goldman Sachs, came up
with a plan to get people to invest in a billion dollars in--in the big
instruments they were betting on. How do you get somebody else to pick up
that billion dollars? Have you guys figured that out in the Senate?
GREGG: Well, let"s look at this. This is an anecdotal event. And I
don"t think we should actually legislate around anecdotal events.
But you"ve got to remember, it"s like when you go in the market and
you buy a stock. Let"s say you buy X, Y, Z stock. Somebody else is
selling you that stock. So, somebody thinks it"s going to go up and
somebody thinks it"s going to go down.
In this case, both sides of the ledger were extraordinarily
sophisticated people. So there"s a very significant question as to whether
or not it was properly disclosed. If it was improperly disclosed, you have
a fraud issue. But, if it was properly disclosed, basically, you"ve got
two sides to this deal.
One group thought it was going up. One group thought it was going
down. That"s the way the markets work. There always has to be a buyer.
There has to be a seller. And somebody is going to win and somebody is
going to lose.
In this case, they were doing--these were huge companies and they
were dealing in huge dollars. And it"s for those of us who are--to
understand those types of dollars, but the fact is, it"s just like buying a
car down at the local car lot.
GREGG: If you make a good deal, you do well. If you make a bad deal,
you do poorly.
MATTHEWS: Yes. Well, I think you"re too sophisticated.
GREGG: Assuming there"s no fraud.
MATTHEWS: I have sort of a moralistic objection to people making a
billion dollars because someone else made a wrong bet, and they knew the
guy that got them to make that bet.
GREGG: Well, if that"s the case, then you"ve got an issue, and that"s
why the SEC is there.
OK. Thank you so much, Senator Judd Gregg of New Hampshire.
Up next: former Bill Clinton on the question of his wife perhaps--
well, not really, but talking about, with Luke Russert, possibly having her
serve on the United States Supreme Court. That"s an interesting question,
and Luke got him to answer it.
You"re watching HARDBALL, only on MSNBC.
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