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"Crying Crocodile Tears"?; Road Block For Fed Chair Nominee?; Missing The Signs Of The Financial Crisis; Food Network Turns 20; "Emperor" James Visits China

Aired October 25, 2013 - 16:30   ET


MATT MILLER, WASHINGTON POST COLUMNIST: We're the only advanced country that doesn't do that. That's the big picture. The Sebelius resignation stuff is a total side show.

S. E. CUPP, "CROSSFIRE" HOST: I completely agree. Sebelius is insignificant. We'll talk in six months. You're absolutely right, when the wrinkles get ironed out and you think millions of people have successfully signed on to these exchanges that aren't going to collapse under the weight of itself because they haven't gotten enough young healthy people to subscribe.

MILLER: They will, though. That's the whole point. Again, where's the Republican alternative? This was a Republican designed plan to get everyone in the insurance pool and Republicans, all they do is say we don't want this to happen, but I mean, without an alternative, all you're saying is we don't want millions of poor workers to get health coverage.

UNIDENTIFIED FEMALE: Why do you want an alternative? This is the law of the land.

JAKE TAPPER, CNN HOST: Jeff, one thing that I will say seems to be a real problem for the Obama administration, in addition of course to all these problems with the rollout of the web site, is ten Democratic senators are now on board for a delay of the individual mandate. Could that cause the administration some serious problems?

JEFF GREENFIELD, AUTHOR, "IF KENNEDY LIVED": Yes. You are citing as I'm sure you know a Greenfield second law of politics. I have no idea what the first law is, by the way. But the law is the danger to anyone in power is what we used to say when in unorganized - baseball games I used to play in, we were in a Jewish neighborhood, every play ended in an argument and they ended when somebody said your old man says so.

That's the biggest danger to almost any political figure is when your own man says so. The Obama administration is in a political position where they could not possibly have asked for a delay even if it was substantively justified because it would have given the other guy a break. Now you've got, as you point out, 10 Democratic senators calling for it. It's very hard for the Obama White House to say this is all politics because it's their man saying it.

And I think as we get down the road, if more senators and more public policy people who support the idea look at this particular program as Matt says, a few months down the road, and shake their heads and say you know what, there are serious structural problems here, that essentially, I don't want to overstate this, although that is what cable TV is supposed to do, this dooms Obama's second term.

MILLER: But I think it's important. Remember, the delay that the folks have called for in this letter, you got to look at the actual letter they sent. It was very solicitous of Kathleen Sebelius. It doesn't even ask for a time frame on how much it would delay. The administration has already said let's slip the mandate for six weeks so this is not like the one year, two year delay that Ted Cruz, the well insured Goldman Sachs spouse.

Because we know that's where he gets his health coverage, it's not that kind of delay being talked about at all. It's a little bit of a political positioning by Democrats who may be a little antsy to see, which way the wind blows on this if it ends up being a calamity but I don't believe it's the beginning of some tidal wave of opposition at all.

TAPPER: Matt, I want to ask you because you are a strong supporter of the law. Every day I pick up the paper or browse the web and I'm seeing stories about individuals coming home, getting letters from their insurance companies saying that their policies are going to have to be canceled because they're not in accordance with Obamacare.

Obviously, there will be other policies that they then can sign up for. But there is a lot of concern out there that Obamacare is going to force individuals into policies that they don't want and possibly, you know, a violation of the president's promise if you like your health care, you can keep your health care.

MILLER: Look, there are fair critiques of the law. I'm not here to defend every, you know, every single item in the law. I say there are a lot of things we could mend in Obama care obviously without ending it. But in things like that, mostly what Obamacare has done has required people to have more ample coverage than a lot of the skinnier down plans that people have had in the individual market.

Remember, this whole thing is about 20 million people out of the 300 plus million people in the United States in the individual market. Some small subset of them may be asked to have a more robust coverage, but that's offset I think by the millions and millions who will have for the first time access to affordable health coverage if you look at the big picture.

UNIDENTIFIED FEMALE: You just tell those people to chill out, right? Chill out.


TAPPER: I want to give Jeff the last word because he has this new book and I want to let him give a plug for it. Tell us about, it's a novel that imagines what the two Kennedy terms would have been like if he had lived? GREENFIELD: Yes, for some reason they call it nonfiction because it relies on facts on the ground. It's a fascination I've had with how often small twists of fate in our history lead to huge consequences. In this case, it begins with the notion that the rain in Dallas, Texas on November 22nd doesn't stop, the bubble top stays atop the car.

Lee Harvey Oswald who I do believe was the assassin wounds, but doesn't kill Kennedy and I then try to play out if President Kennedy remains the president, what do the next five years look like. What happens in Vietnam, what happens at home, what happens to the cultural wars of the '60s, what happens to the whole political future of this country? This tiny little twist of fate which I think is the driving notion that so many historians won't cope with can lead to huge consequences.

TAPPER: I was skimming it before the show and it's not a spoiler but I will say, Lyndon Johnson not the vice president in the second term.

GREENFIELD: That's right.

TAPPER: A little moment of intrigue. I can't wait to read it. Thank you so much, Jeff Greenfield. Best of luck with the book. Matt Miller, S.E. Cupp, thanks so much for joining us. We appreciate it.

Coming up on THE LEAD, she was fired for admitting to having used the "n" word, but was the food network anxious to get rid of Paula Deen before that? Stay tuned.


TAPPER: Welcome back to THE LEAD. In our Money Lead, President Obama's nominee to head up the Federal Reserve, Janet Yellen, has yet to get her Senate confirmation hearing date, but one Republican senator is already causing some trouble. Senator Rand Paul of Kentucky told CNN that as part of the debate over her confirmation he's insisting on a vote on his bill to audit the Federal Reserve.

A source close to Senator Paul told CNN that it's too early for him to decide if he'll put a hold or block Yellen's nomination, drama. One man who knows the process well is Alan Greenspan. He chaired the Federal Reserve from 1987 to 2006 and has written a new book, "The Math and The Territory, Risk, Human Nature and The Future of Forecasting."

He joins me here in Washington, D.C. Welcome, sir. Thanks for being here. So Rand Paul is threatening to hold up Yellen's nomination unless he gets a vote on this audit the fed bill, detailing everything the Federal Reserve has done and is doing. I know you oppose it. You think the fed needs to remain independent. Why should people not know what the fed has been doing?

ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: First, let me just say on the issue of accounting, each of the 12 reserve banks are fully audited, the Federal Reserve board is fully audited by outside accountants. I've done a lot of accounting over my life. I'm telling you the books are as clean as you can imagine because there's very little that can go wrong there. The one issue that he is raising is auditing the actual deliberations of the Federal Reserve, which is a very bad mistake.


GREENSPAN: Basically because what history tells us is if you have that sort of audit by the political system, which is of course, what it is, you will get a bias towards inflationary monetary policy and that's the reason why the original founders of the fed made the terms of governors 14 years, for precisely to avoid that reason. So it is a terrible idea.

TAPPER: OK. Let's talk about your book. I know that's what you want to talk about. I want to get to what's inside in a second, but I read a very harsh review of it by the "New Republic," by a liberal progressive writer in the "New Republic." I want to get your response to it because he reflects a lot of feelings, negative feelings that many progressives have about your stewardship of the fed.

He writes anyone who has paid attention to the economy the past few years knows how ridiculous it is the fed Greenspan, the architect of the policies that led to the great recession. He suggests you share the blame with JPMorgan Chase for duping investors into purchasing mortgage-backed securities that were stuffed with garbage loans.

Because your quote, "allergy to regulation" and unshakable belief in the virtues of the free market led you to ignore the bubble and its risks, infusing investors and consumers with confidence that the run up in home prices was perfectly normal. How do you respond to that?

GREENSPAN: I respond in the book itself. I explain precisely what happened, what led to the global bubble. Remember, this is not an American bubble. The housing bubble looks the same whether you're going to Canada, Australia or any of 20 other countries. We're somewhere in the middle. So the bubble itself is neither an American issue nor something which we were unaware of.

The critical question that we all missed is when it would break and one of the things I demonstrate basically in the book is you cannot determine that. Now, essentially, to say what this individual said, all I can suggest is read the book and determine for yourself what you think.

TAPPER: Well, I don't want to focus entirely on the criticism. I think one of the things, this is an investigation, you go back and look at what you did -- what could have been done differently and one of the things you conclude is that spirits as you call them, exuberance, depression, anxiety, that those things played a bigger role. Do you think that they played a bigger role than, say, absence of regulation, sufficient regulation on Wall Street?

GREENSPAN: Absolutely. This is basically an endeavor to find out what makes the economy function and how best to understand it. What the issue of spirits is all about is a change in view on my part and I presume a number of the people who are forecasters, who make a living at that, is that it's not that we were unaware there was irrational actions that people acted crazily. Eyes were opened in the canyons of Wall Street.

So that's not the issue. The issue is fundamentally is it systematic enough to actually model it and be able to use it for forecasting purposes. The general presumption of most everybody was no, not really, because it's random and you can't get a fix on what is going on. The big surprise to me is I began to look at the reasons why we failed to get September 15th, 2008, on time --

TAPPER: The crash of Wall Street.

GREENSPAN: The huge -- people just disappeared and I would say that the major issue that confronted us is we hadn't a clue as to why that happened. The purpose of this book is to go back to square one and to see what essentially we did wrong and what it turns out we did wrong is that the fundamental premise that people act in their own rational self-interest all the time of course is wrong. We knew that, but far more importantly, you can model animal spirits and that matters.

TAPPER: That matters for the future predicting.

GREENSPAN: It is a huge issue because you're going from one type of system to look at the economy to a wholly different one. And that is basically what -- that's sort of a detective story in a way, how I proceed to try to find out why did we all make this terrible mistake.

TAPPER: It's getting great reviews. We wish you the best of luck with it. The book is "The Map and The Territory, Risk, Human Nature and The Future Of Forecasting." Alan Greenspan, thank you so much for being here. We really appreciate it.

Coming up in the "Sports Lead," he's a superstar in the U.S. but in China, there, he's a God. Next, we will talk to Lebron James about his unbelievable popularity a world away from home.


TAPPER: Welcome back to THE LEAD. Now for the Pop Culture Lead. You think you're the next Rachael Ray or Bobby Flay? Well, if you think you have what it takes to slice and dice in front of a camera, the Food Network is holding open casting calls for the upcoming 10th season of their hit show, "Food Network Star." They'll be in providence, Rhode Island tomorrow.

Today's lead read explores the success and scandals of the channel and its stars in "From Scratch, Inside The Food Network." Earlier I spoke with the author, Allen Salkin.


TAPPER: Allen, thanks so much. Congratulations on the book. I think a lot of people would be surprised to hear that the Food Network is 20 years old. You write in detail about how the wife of the first Food Network president called the idea for a 24-hour food channel the worst idea I ever heard. So what was food TV like 20 years ago and how did this network come about?

SALKIN: Well, it's funny because the first president of Food Network who you are talking about is Reese Shonfeld, who is actually also the first president of CNN. So Reese was a guy who thought of Food Network as CNN with stoves. So his idea was to tape many, many new cooking shows every day on an extremely low budget, which CNN, of course, also was in the early days, and it was -- no one was really watching back then. This was -- no one thought this was a good idea. It wasn't just his wife. It took about six or seven years before anybody actually started watching the network.

TAPPER: So what happened, 9/11 played a role, right, in the company's success?

SALKIN: People were looking for comfort food, something other than the big story, and what had been built on high end chefs and careful cooking technique became something where the network was now looking for personalities who could appeal to people like their comforting next door neighbor, maybe Paula Deen, back then a sort of wacky grandmother, Rachael Ray. So the network made a very conscious decision to provide comfort food and something that would soothe you and contribute to the national mood for cocooning.

TAPPER: Let's talk about Paula Deen who you just discussed. You wrote about the first scandal of hers when it was revealed she was hiding her diabetes and then signed a deal to shill for a diabetes drug, then admitted she used the "n" word that ended her deal with the Food Network. Why did they support her during the diabetes episode but not now?

SALKIN: Well, because her contract -- she was still under contract then and they weren't actually supporting her. A lot of journalists, myself included because I was working on the book then, were getting calls from the head of public relations at the network who was getting consulted by a crisis management guy. What they were telling reporters was we had nothing to do with this as a network. This was a surprise to us. She's greedy and we don't like it.

So when the "n" word controversy came about as a result of the lawsuit deposition that became public, and her contract was up, and the network was no longer getting great ratings for those traditional dump and stir cooking shows, the kind that we know from Julia child, it was kind of an imperfect storm for Paula and now that the network is a $6 billion to $10 billion business expanding internationally into Asia and Africa, it's not the kind of company that can be associated in any way with something as troubling as racism.

TAPPER: We only have time for one more anecdote. I will give you a choice. This way hopefully people who see this will want to hear the other one, will buy your book. Rachael Ray almost burning down a set or Bobby Flay having to reinvent himself, tell us whichever you prefer. SALKIN: Well, Bobby is the ultimate New York kid survivor who if you asked him what college he went to, he'll say UCLA, the University of the Corner of Lexington Avenue. Bobby has managed to survive for 20 years at this network and nobody else has, by quietly and coldly figuring out who's in charge, what they want and how he can deliver it. Ever since I wrote the book, I started saying to myself at times what would bobby flay do in this situation. He seems to be without neurosis. That Rachael story is great, too. Please buy the book.

TAPPER: Sounds like Bobby Flay's a great role model. I need to take that advice myself.

SALKIN: You're doing great, Jake. Don't worry.

TAPPER: Allen Salkin, thank you so much. The book is "From Scratch, Inside The Food Network." It's a great read. Good luck with the book.

SALKIN: An honor. Thank you very much.


TAPPER: Now it's time for the Sports Lead. Here, he's the king. There, he's the emperor. It's like beetle mania without the Moe Howard haircuts. Every year when Lebron James makes his annual trip to China, the NBA's MVP is there to spread the basketball brand and shill for Nike in the fastest growing market in the world. As our Rachel Nichols shows us, he is also there to spread the brand of LBJ.


RACHEL NICHOLS, CNN SPORTS CORRESPONDENT (voice-over): For one week a year, every year for nearly a decade, this is Lebron James' life.

LEBRON JAMES, FOUR-TIME NBA MVP: All the fans over here. When I first came here nine years ago, I was like wow.

NICHOLS (on camera): If I told a 10-year-old Lebron James that you would end up going to China more often than a place closer to Ohio like Nebraska and Kansas, what would you have thought?

JAMES: He probably would have told you I'm not leaving Akron, Ohio. I remember the first time I was known outside of my hometown, when I was 14. I was a freshman. We went to Columbus for a state tournament. It's like that's Lebron, that's the freshman everyone's talking about. I'm 120 miles away from home. I was like wow, this is pretty cool. It's 8,000 miles away from home, people love me and are passionate about seeing me. It's very surreal.

NICHOLS (voice-over): James is one of the richest and most famous athletes on the planet, but being a global phenomenon doesn't just happen by itself.

JAMES: When I became a professional athlete, I became a business as well. So I couldn't just worry about the game of basketball 24/7 without understanding the business side of it.

NICHOLS (on camera): How adventurous are you when you travel? As far as trying weird food or anything like that?

JAMES: I'm not adventurous at all. I'm not. I have never been, but I do use chopsticks, though.


TAPPER: Joining us now is Rachel Nichols. Rachel, Lebron James, one of the most documented athletes in the world. The U.S. didn't know much about these crazy trips to China until you got all access. How did this travel to china become such a huge part of Lebron's life?

NICHOLS: Yes. As he said, there's neighboring places to Akron, Ohio he hasn't been to nearly as much as China. He can speak a little bit of Chinese now, pretty crazy for a kid from the Midwest. As he said, it's his business now and it's interesting. We talk about how athletes these days aren't like the Larry Birds or Magics. The game has changed. There's this global following, the money is certainly a lot bigger and different.

But there is work that's involved in making all that happen. It doesn't happen by itself. Now, it's fun work, but it still means he's got to go over there. They go city to city, they promote the game, they promote himself, and the guys that do that the most and work the hardest at it tend to have the best jersey sale numbers, the best shoe sale numbers.

We have seen countries grow basketball and develop in the wake of these visits. Lebron James, it may surprise you, has never had the top jersey sale globally until this year. So these trips are paying off. They announced that just after he got back from China.

TAPPER: So your new show, brand new show, "Unguarded" premieres tonight at 10:30 p.m. Eastern right here on CNN. Lebron is the centrepiece of your big debut. What can we expect to see?

NICHOLS: We will have some great panel discussions, basically looking at sports from a larger perspective. You know, Jake, that sports extend so far beyond the playing field so many ways that it touches our lives. So we're going to be looking at those issues, we'll be looking at it from the angle of politics and finance and entertainment and how all of those worlds collide in sports, in the sports that we love. We're looking forward to having everyone. Come on over tonight, 10:30 Eastern and Pacific.

TAPPER: I'll be watching, Rachel. Thank you so much. Best of luck.

Again, do not miss the debut of "Unguarded" with Rachel Nichols tonight at 10:30 p.m. Eastern on CNN. That is it for THE LEAD. I'm Jake Tapper. I now turn you over to Wolf Blitzer in "THE SITUATION ROOM" -- Wolf.

WOLF BLITZER, CNN ANCHOR: Jake, thanks very much. Happening now, close allies are already upset over reports the U.S. has been monitoring their phone calls, but more leaks about U.S. spying may soon make them a lot angrier.

Also, a stunning new warning, Iran could be just a month away from having enough material for a nuclear weapon.

And a new move to decriminalize marijuana in a major American city. You won't believe where. I'm Wolf Blitzer. You're in THE SITUATION ROOM.