MSNBC Interview - Transcript

Interview

MSNBC Interview - Transcript

MSNBC INTERVIEW WITH SENATOR AMY KLOBUCHAR (D-MN)

SUBJECT: BANKING INDUSTRY

INTERVIEWER: CHRIS MATTHEWS

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MR. MATTHEWS: Just about eight and a half hours from now, President Obama will enter the House chamber to address a joint session of Congress. It's arguably his biggest speech since Inauguration Day and comes amid deepening concerns about the economy, which seems to get worse by the day. Even as the president outlines the way forward, many are calling for more transparency to make sure government bailouts don't amount to throwing good money after bad.

To do that, the Obama administration will begin so-called stress tests on major banks this week to see what they'll need to survive, what those banks will need to survive this recession. Officials have also cleared the way to take controlling stakes in troubled banks like Citigroup. An op-ed in The Washington Post today argues the administration must proceed carefully, quote, "The threat of nationalization, better described as temporary government receivership has cast a shadow over all banks. The sooner the federal government can decide which, if any, banks will be subject to either this extreme measure is simply more capital infusion, the sooner banks that are better off can escape the shadow of suspicion and go ahead with their business."

Joining me now is the author of that op-ed, Minnesota U.S. Senator, Democratic Senator Amy Klobuchar. She's a member of the Joint Economic Committee.

Senator, it's great to see you here and to have you write this article.

SEN. KLOBUCHAR: Thank you, Chris.

MR. MATTHEWS: What bothers me is this whole thing, and I am typical. I studied economics in college and graduate school for this very reason because I figured it would be the one thing I wouldn't actually read about like history or literature. I had to force-feed myself to understand economics because I didn't like it and I don't like this discussion. But let's talk about banking which bores the heck out of me except it now seems to be the stomach of the American economy, and if it doesn't work, we die and its never occurred to me before that the banking system is essential to our existence as an economic organism if you will as the stomach is to each one of us.

It must work or we die. Now, let's talk about in that context. The banking system --

SEN. KLOBUCHAR: Okay.

MR. MATTHEWS: Why can't a person of reasonable means and credit today borrow money to buy a new tractor, a new appliance, a new TV set, a home? Why isn't that working?

SEN. KLOBUCHAR: Well, first of all, as you know because of this entire crisis starting with the foreclosures, credit stopped flowing in this country. Now, one of the points that I made in this piece today was that this isn't about all banks, Chris, there were some banks, particularly on Wall Street that made some very bad decisions, risky deals and then there's some other banks, a lot in the heartland that made some smart meat and potato loans along the way. They haven't had quarters of red ink and the thing that concerns me while I agree that we have to do something and move along and help some of these banks and get the credit flowing again, there's no doubt about it, we don't want to paint such a broad brush that we're hurting some of the other banks that really don't need the government help, they don't need to be on the government dole, they weren't the ones sitting there with the tin cups in their hands when the pavement started buckling under Wall Street.

So it is very important that the administration make clear that there is a difference and look at this, not as a pass-fail, but a curve, even among the large banks that some of them are healthy, that some of them are not, that some of them need capital infusion and some of them may need temporary receivership. But that we want to allow the healthy banks, the good banks, the ones that are sitting there right now trying to keep their feet on the ground while a cyclone of debris is swirling around them, saying, Toto, we're not in Kansas anymore. We've got to bring them home and let them do their jobs.

MR. MATTHEWS: Why don't those good banks, as you describe them, put a big sign out front that says, we give loans to reasonable credit risks?

SEN. KLOBUCHAR: Well, some of them are starting to --

MR. MATTHEWS: Can they put that sign out? Can they put that sign out and defend it? Can they do that?

SEN. KLOBUCHAR: First of all, some of them are starting to get the credit moving again, but one of the things that I'm glad the administration is doing, Chris, is working on this foreclosure issue with that $75 billion plan, that they're pushing the banks more that have been holding on to some of the money to push it out there and, of course, as you mentioned earlier, a lot of this is that some of the larger banks are at such risk right now, not all of them, but some of them that that's created this fear in the market so that even these healthy banks, large, healthy banks have been seeing problems with their stock because people don't know what's happening.

So I believe that this is possible with the administration treading carefully, but immediately to make clear over the next few weeks which of these banks they think are going to need this help, which are the ones that are doing fine in the market on their own so that we can get the credit flowing again.

MR. MATTHEWS: Chris Dodd, the Chairman of the Banking Committee from Connecticut got in trouble the other day or caused a row by saying we might have to nationalize some of the banks. Was he telling the truth?

SEN. KLOBUCHAR: I think part of his words were taken out of context. He was not saying we're going to nationalize all the banks. He was saying that some banks, the government will be looking at for some extreme measures whether it happens or not, that we will see after they look at them. But a vast majority of the banks in this country, especially so many small banks in Minnesota, credit unions, some of our large banks, I said Minnesota is a place to use a word that Garrison Keillor -- where all the women are strong and all the men are good looking and all the bankers are above average. A number of our banks and banks all across the country haven't made these risky deals and as we go ahead with this, we have to remember that and I think the president has made very clear that he has faith in our private banking system, but we just have some extreme examples that they're working on right now.

MR. MATTHEWS: Okay. Thank you very much, Senator Amy Klobuchar of Minnesota.

END.

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