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CHARLIE ROSE, MODERATOR: Clearly, you`re not saying they should go to jail?
GINGRICH: Well in Chris Dodd`s case, go back and look at the Countryside (SIC) deals. And in Barney Frank`s case, go back and look at the lobbyists he was close to at Freddie Mac.
(END VIDEO CLIP)
MATTHEWS: Well, that was a portrait of malevolence. Congressman Frank, what do you make of this? Is this libel, or what is it? I don`t know what to make of it.
REP. BARNEY FRANK (D), MASSACHUSETTS: Well, first of all, you have to understand, when you think you are the intellectual leader of the free world and you find yourself struggling to pass Michele Bachmann in a poll in Iowa--
FRANK: -- it is unsettling. I understand that the poor man isn`t getting his due.
But what was particularly extraordinary was he was talking about a period when he was in charge, not me. You know, the run-up to this crisis -- the crisis began to bubble over in 2007 and 2008. The Republicans
controlled the Congress from 1995 through 2006. Newt was himself speaker for four years, did nothing about the problems he accuses me and Chris of causing and then it was Tom DeLay.
So apparently -- and I`m regretful, Chris. Apparently, I had some secret influence over the Republican leadership that I never knew about because if I had, I would have told them not to impeach President Clinton. I would have told them not to go to war in Iraq. I would have told DeLay not to go on the dance show. I mean, there are a lot of things I would have done.
FRANK: The second thing I would say is, what he then is objecting to is the bill we passed. Yes, they don`t like an independent consumer agency and the work that Elizabeth Warren did. They don`t want derivatives to be regulated. Incredibly, they want to go back to the situation where AIG wasable to get itself into all this trouble. They don`t want a fiduciary responsibility on people who advise investors.
So as I said, first of all, he`s talking about the period when his party was in control. In 2007, when we took over, we began to make illegal these subprime loans, et cetera.
And as I said, poor Newt is just beside himself. He thought he was a great gift to the country, and he finds himself being taken back to the return window, not at Tiffany, I guess--
FRANK: -- but a different place, and he can`t deal with it.
MATTHEWS: Well, let me suggest that behind the malevolent comment of Newt Gingrich last night about you and former senator Dodd was a grim effort to try to raise a few bucks in this campaign.
As you must know, Congressman Frank, as everybody in business knows it, you and Chris Dodd did something to regulate those people, and the one problem (INAUDIBLE) like it the least. Is this the way to pass the tin cup around and get some money for what is already a cash-strapped campaign, not only a ludicrous one but a poor one?
FRANK: Oh, I suppose so. Look, there are a lot of people who made a great deal of money, and if you read the "Journals" and other papers, you listen, yes, there are people who are complaining that because of what we did, they can`t do as much.
By the way, what we did, I think, was to restrict some of the activity that added nothing to the real economy, trading paper back and forth. I mean, these people had -- they were engaged in economic transactions that had as much relationship to the real economy as fantasy football has to Sunday afternoon, except they were making money off it. And yes, there are some people who are very angry at us because they`re not making the trading profits they used to make. And yes, I`m sure that Newt does make some
money off that.
MATTHEWS: Well, what do you make of the Republican Party? You grew up in Massachusetts, and New Jersey way before that. And you know there used to be a Clifford Case Republican Party, a party of Governor Sargent and reasonable people. And what happened to that?
Last night -- well, I want you just start (INAUDIBLE) I want you to take a look at -- here`s Rick Perry, who actually is a governor of one of the states, maybe a secessionist governor but a governor, and here he is
talking about the revolutionary war. Of course, Massachusetts had much to do with it. Here he is talking about when it was fought, not about when the earth was founded 5,000 years ago, according to these people, but when we fought our revolution (INAUDIBLE) that part. Let`s listen.
(BEGIN VIDEO CLIP)
GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Our Founding Fathers never meant for Washington, D.C., to be the fountain of all wisdom. As a matter of fact, they were very much afraid of that. It was actually the reason that we fought the revolution in the 16th century was to -- to get away from that type of onerous crown, if you will.
(END VIDEO CLIP)
MATTHEWS: How do you describe this knucklehead history? I mean, this guy`s the guy that said Texas has the right to secede from the union. I think we fought a war over that. Now he has placed -- well, they always have problems with the history of the universe. You know, they -- you know their problems with that. But here he is saying our country was founded back in the 1500s.
FRANK: Well, I`ll be honest with you. I think Rick Perry is jealous of me, and here`s why.
FRANK: He wrote a book, or he signed a book that someone wrote, and he said, oh, he could never live in Massachusetts because they vote for Ted Kennedy, a great senator who was alive (INAUDIBLE), John Kerry and me, even after they know what we stand for. And he was appalled that people would vote for us even after they know what we stand for.
The reason I think he`s jealous is, as people in the Republican Party have found out what he stands for, they`re not voting for him.
FRANK: So he`s very jealous that someone can tell people what he thinks and not have to repudiate it or go back on it.
The floundering around, yes, it`s discouraging. But to go back to your main point. I was very bipartisan when I was in the legislature. There were some differences, but we could work together on things. You
have a group of people now -- the Republican Party today is in the grips of the most rigid ideological splinter we`ve seen. And the problem is that they don`t represent the whole country, they represent the people who vote in Republican primaries. And that has driven all of them far to the right.
So Mitt Romney, for example, is in a mode of repudiating position after position. I noticed in the debate last night, they quoted his having supported the Bush administration`s efforts to deal with the financial
crisis in 2008. He`s now repudiating that. He`s, of course, repudiated the health care.
I mean, there has never been a time in American history when so rigidly ideologically extremist a group has controlled one of the major parties.
MATTHEWS: And he was the sober one last night. Let`s look at Rick Santorum last night -- I want David to get in here -- Rick Santorum last night advocating basically getting rid of all corporate taxes for manufacturers. Just get rid of them all. Don`t pay for it, just get rid of them. Let`s listen.
(BEGIN VIDEO CLIP)
RICK SANTORUM (R-PA), FMR. SEN., PRESIDENTIAL CANDIDATE: What happened was we became uncompetitive, so we need to be competitive. That`s why I propose taking the corporate tax for manufacturers and processors, taking it from 35 percent and eliminate, zero percent tax. Allow this to
be the manufacturing capital of the world again.
(END VIDEO CLIP)
MATTHEWS: This is just in line with what Bachmann said the other night in the last debate, saying we shouldn`t have to pay any taxes.
DAVID CORN, MSNBC POLITICAL ANALYST: Well, first I think I should say that I`m here to make a citizen`s arrest of Barney Frank, if I have the chance. I mean, they`re bidding down. Pretty soon, it`s going to be
negative numbers on taxation. I mean, you know, Herman Cain`s plan would raise taxes on the poor. Michele Bachmann says we shouldn`t pay taxes. He doesn`t want taxes on any manufacturing. But his headline was, I want to go to war with China.
CORN: He meant an economic war, but it`s like the war language, the rhetoric has to be as excessive as it can for any of these guys to have a chance of winning over those Republican primary voters that Barney was
FRANK: Can I add, by the way, you`re talking about not raising taxes. They`ve backed away from cutting -- savaging Social Security and Medicare. But these are all, including -- except for Ron Paul, they all want to
greatly increase military spending. Here we are spending at the highest rate -- we`re spending at cold war rates of military spending, going all over the world. And Romney`s attacking President Obama for not spending enough on the military.
So the nonsense is that you cut taxes, you claim that you`re going to protect Social Security and Medicare, and you increase military spending. They`re not just going to -- they`re going to really make the military the volunteers, volunteers in the sense that we won`t be able to pay anybody. We`ll have to have volunteer people to give us bullets, volunteer people to fly planes.
I mean, the illogic is overwhelming. How do you substantially increase the largest single item in the discretionary budget, military spending, and then cut taxes and say, Oh, but Social Security and Medicare
will be fine?
MATTHEWS: Well, last night, Congressman and David, they were supposed to stick to economics, but of course, Michele Bachmann couldn`t avoid religious concerns. Here she is passing what even my producers think was a joke -- I don`t think so -- talking about the "sign of the beast," which I learned from some of these characters is apparently 999, Herman Cain`s economic program, turned upside down, 666.
Let`s listen to her brand of humor. This is Michele Bachmann -- desperate.
(BEGIN VIDEO CLIP)
REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: When you take the 999 plan and you turn it upside down, I think the devil`s in the details.
(END VIDEO CLIP)
MATTHEWS: What would you say if you were debating a person like that, who -- who shifted the topic to the strange far right Christian notions about the devil and the sign of the beast? She can`t resist that catnip.
FRANK: I guess if I were debating her -- not just debating her, but I was losing to her in the polls, I would do exactly what Newt Gingrich did. I`d just start to say outlandish things and change the subject.
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MATTHEWS: Let me go back to square one. Congressman Frank, again, besides being a liberal and a progressive supporter of your interests in your district up there in Massachusetts, you do study politics and history. What has happened to the Republican Party? Why does it look like a Tea Party-fueled party looks like it`s given up on finding a candidate that it likes and looks like it`s willing to go with one it doesn`t like?
FRANK: Well, it`s a combination. I think the fact is that the economy went very sour during a Republican regime. And I want to stress this again. They -- the Republicans have had this great success in saying,
Oh, the Democrats caused the problems. For six years, from 2000 through 2006, which is clearly the time when the economic problems festered and got worse and were ready to blow up, we had Republican control of the presidency, the House and the Senate.
That`s unusual. The last time we had a six-year period of one party controlling all three branches was Lyndon Johnson. So they had control, and it went terribly wrong. And here was this problem. They could not
deal with that and they could not deal with the problems that there was too little regulation, too little government intervention, too little of a public sector along with the private sector.
So they were literally kind of driven mad by it, and the anger just exploded on themselves. So I guess they had to say -- look, they couldn`t possibly go to the left. If George Bush`s administration was a failure in
this leading up to the economic crisis, and of course, in the Iraq war, the greatest mistake in American history, I believe, that was a single conscious decision, then the only answer is to go further to the right.
I mean, they couldn`t stick with Bush. They are constitutionally unable to move even to a more centrist position, so they had then -- the only place they could go is to the right. That`s why you have people like
Gingrich and like Romney and a lot of others far to the right of where they ever were before because, again, the model they had of a Bush administration became indefensible, and they had to find a new model. And
given their ideology, given their positioning, the only one they could find was to the right.
MATTHEWS: You`re invited back on this program any time you`d like, especially when you`re accused of a felony by Newt Gingrich.
FRANK: Well, be fair -- he didn`t say -- it might have been a serious misdemeanor.
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