Transcripts For MSNBCW Morning Joe 20120806

can go to kincos, photo copy his tax returns, several hundred pages, hand them out to people like cnn, hand them out to reporters all over the country and we wouldn't talk about this tomorrow, is he paying taxes, what's he paying. the whole world would know exactly what loopholes he's taking advantage of. >> right. >> good morning, everyone. it's monday, august 6th. welcome to "morning joe." with us on set here in new york city, we have msnbc and "time" magazine senior political analyst mark halperin, national affairs editor for "new york" magazine and msnbc political analyst john heilemann and former treasury official and "morning joe" economic analyst steve rattner, and willie is in london still. look how cute he is, his little jacket. >> that fetching sort of, i don't know, what kind of jacket is that? i don't know. >> it's a bruce jenner look. >> a club -- >> bruce jenner at 76. >> very good. >> well -- >> willie, i know this is an especially difficult morning for you to be on the show and i want to just thank you this morning because a lot of people who saw the world record broken last night, would not have the strength to come on this morning and just wake up and do the job but you are now the second fastest man in the world. >> yeah. i know. i think i talked too much trash before the race. unbelievable what happened here last night. this is it time -- >> were you whispering to bolt going, you have weights on your shoulders? what were you doing to trash talk? >> you know, a lot of people were -- a lot of people were saying that to him before the race. he'd heard he maybe had lost a step, wasn't training hard enough, so he went out last night and ran a 9.63, which is an olympic record, with a bad start. he said i stumbled out of the blocks and had to make up some ground and ran a 9.63 olympic record, shy of his own world record which is 9.58. it was a crazy scene. 80,000 people. you could not get in. i had one member of the dream team, professional basketball player, say he had to pay some guy $2500 to get into the door to watch this race. it was a heavyweight fight with the whole world watching and he delivered. >> highlights later in the hour, everybody. might want to change the jacket. >> i like the jacket! >> i guess mika hates bruce jenner because she hates -- >> my daughter might wear that. >> hates americans. hates america. >> nice to have you back at the table. back from vacation. hi, rattner. >> hello. >> all right. >> i saw halperin, by the way. >> you did? >> nice to see joe in indiana. >> we were in indiana. >> central indiana at a -- a lot like nantucket -- >> thanks for telling everyone i was in france. >> i saw rattner in debut. >> oklahoma. >> oklahoma. >> all you rich folk enjoy your vacation. >> whatever. >> we know where you were. >> i was not in france. >> in france. >> i'm going to politics now. >> go ahead. >> republicans are -- >> it's such happy news. >> attacks against senate majority leader harry reid and his claim that mitt romney is withholding his tax returns -- that's not a claim. he is. he says he's doing it because he may not have paid taxes over a ten-year period. that's according to what the senate majority leader called a reliable source. on the sunday talk shows republicans responded. >> this is a reckless and slanderous charge by harry reid, a guy who hasn't released his own returns and for three years, can't get a budget passed in the united states senate. >> as far as harry reid is concerned, listen, you might want to go down that road, i'm not going to respond to a dirty liar who hasn't filed a single page of tax returns himself. >> wow. that's kind of -- i mean, dirty liar. heilemann, it's getting ugly out there. >> i know. talk about slander. >> does this matter? >> the harry reid thing or the taxes? >> harry reid? i mean are republicans doing what they need to do? you can't call the president like a, quote, dirty liar, so they are beating unharry reid? >> i'm with those people who think it's outrageous what harry reid has done. it's an unsubstantiated charge pulled out of the air and i think mitt romney should release his taxes and i also think that harry reid should not hurl baseless accusations without having actual evidence to back them up. >> and by the way, he wasn't doing this like ringside in vegas at a boxing match. he was doing it from the senate floor. >> two ways to look at what h r harry reid has done, one is if you want to be cynical, brilliant politics. run three or four or five days minimum of people talking about mitt romney's tax returns rather than the unemployment rate and he did it pegged to the release of the unemployment numbers. the other way to look at it, jon suggested is, a misuse of the office, something harry reid has done before and he doesn't care about the criticism. i think republicans have misplayed this because they're keeping it alive as reid wanted them to. he doesn't mind being called those names, couldn't care less, but keeps the story alive. >> why don't we talk about the unemployment numbers? >> well, okay. can i give you harry reid's response? >> i would love it. i was just wondering, what does harry reid think about this. >> his chief of staff responded saying, quote, they're a bunch of cowards and avoiding the issue. lindsey graham, ryans priebus, a bunch of henchmen for romney and reading off the same talking points. they can't hold a candle to reid. >> i think we have a bunch of henchmen on all sides. i think we do. by the way, is harry reid really not released his records? >> almost no members of congress do. >> but if i'm going to be knocking somebody for not releasing my tax returns, i better release ply tax returns. >> i think it's a different set of rule. i mean harry reid is obeying the senate rules, has financial disclosure forms, not obligated to release his tax returns. >> mitt romney's obeying the rules. >> mitt romney is obeying the rules but not the precedence. >> not obeying the rules placed upon him by the national media or the democrats. >> no. i think first as you know -- >> or himself. >> his father began this giving up 12 years of his tax returns. >> john worked for lockheed -- >> ultimately released -- >> mccain did two years. seriously, this is just one of these stories that -- >> what about the fact that he has ted kennedy to reveal his tax returns and demanded that the voters need to know. >> i don't think this is one of these stories opponents make up. he's released tax returns, showed an extraordinary use of every tax trick in the book for a guy with a luge amount of income, paying a tiny amount of taxes. >> did you go to your accountant and say let's not be aggressive here? i want to pay 30% taxes. >> i will tell you, i know something about this, this is a private equity tax approach, and the world of aggressive tax treatment, his is the most aggressive i have ever heard about just from what we -- >> really? >> that's a guy that -- >> i do not know -- >> a guy that knows money and how to be aggressive and turn america around. very good. >> taxes -- >> he knows how to serve himself. >> taxes are a gray area, not all black and white, and he has gotten as far to the dark side as i've ever heard of anybody -- >> the dark side? are you a staff member for harry reid now? >> i do not know. i'm not going to claim i know anything, that i have a secret source. that i thought was ridiculous. the fact is that i do not know anyone who has a $100 million ira, do you? >> well -- >> mika does, of course, but -- so he has a secret source and i have a secret plan to -- >> [ inaudible ]. >> he speaks crummy tub of money. >> he does. >> slander. >> what it will do for you. >> all right. the jobs report, both the romney and obama campaigns are looking to seize upon friday's monthly jobs report. it was weird, i heard terrible headlines and then incredible spin on this. rattner you should -- >> isn't that frustrating when -- like we were at the white house at your event with valerie for women and the numbers came out and the unemployment number went down. and we saw gene sperling and it looks like he just got the worst news ever. i said this is great news. they were both like we're not so sure these numbers are -- about three or four months ago. two or three months like that where the numbers etched down and then suddenly on friday we get a number, that's great news. and then the unemployment number goes up. >> right. >> and then wall street's -- i mean -- >> it's confusing. >> we have to find a more exact way to do this. this is frustrating for americans. >> here's what the monthly jobs report saw. >> and for people like me that aren't good in math. >> 163,000 jobs added in july, twice as many as last month and more than 100,000 than wall street analysts were expecting. however, still signs of weakness as the unemployment rate remains stubbornly high. take a listen to this. >> we've had 42 straight months with unemployment over 8%. and this was a president who said that if we passed his stimulus bill, we'd never go above 8%. that's 23 million americans out of work or under employed and those are real people. i'm very concerned about how we can get americans back in good-paying jobs with a bright and prosperous future. let me tell you, i know how to do it. >> we haven't had to come back from an economic crisis this deep or this painful since the 1930s. but we also knew that if we were persistent, if we kept at it, and kept working, that we'd gradually get to where we need to be. here's the thing, we are not going to get there, we're not going to get to where we need to be if we go back to the policies that helped to create this mess in the first place. >> all right. steve rattner, what's the real deal in terms of the numbers? >> first of all, the unemployment rate increase was actually truly a rounding, from 8.217% to 8.254%. >> those are -- >> and that gets rounded up to 8.3%. it didn't really change. >> okay. >> the fact is there were 163,000 new jobs created, happens to be almost exactly the average for the first six months of the year. it effectively absorbed people coming back into the labor force. it's good news. the market up strongly on friday on it. it's not great news. the unemployment rate is still above 8%. >> what can you read from those numbers, though? look at -- read the tea leaves, what can you tell us about what this means moving forward? >> what this means is that basically we are still in a slowly growing economy with modest employment growth that will keep the unemployment rate from going up and probably won't bring it down by a lec of a lot. >> are you one of the guys that believes that we're in the japanese equivalent of a lost decade? are we going to have stubbornly high unemployment for four, five, six, seven years? >> i don't personally believe that, but that's an argument. i believe that we're in this process of de-leveraging where we had too much debt at the household level, too much debt at the government level, everybody is retrenching, problems in europe dragging us down as well. >> right. >> and we have the uncertainty created in washington which is terrible for business, story on the front page of the "new york times" about people not hiring because of the uncertainty in washington. if we can sort out our problems in washington and provide certainty to the business community i think we can have reasonable growth. >> you have charts. >> job growth versus the election outcome. let's start with that one. >> there's five charts and we're going to take a look at five variables and how they can be used to predict elections based on past history. bear with me here, because it's a little bit -- >> oh, good lord. >> but good for you. >> okay. >> this is going to hurt. >> up on this left side here you've got the share, the predicted share of the popular vote going to the president. with me so far. >> you got about five seconds. >> the black line across the middle, the 50% line. all those little blue dots respect an election, every election since 1964 is blplotte here. >> okay. >> and the red line the predicted line using all these blue dots for what the outcome is likely to be. this dotted green dot here down the middle, is where we are today in the economy. so job growth under obama has been 0.3% for the last four months. >> okay. >> draw a line down there, get to where it crosses the red line and that's his predicted share of the popular vote just above 50%. >> okay. >> by this measure. if you want to look at a couple dots this is jimmy carter down here to the left. >> by job growth he's doing okay. >> job growth he's doing okay. go to the next one? >> might as well. >> unemployment rate. unemployment rate which everybody thinks is a big predictor of election outcomes if you look at the statistics, no effect. >> go ahead. >> it explains none of the outcomes. all the blue dots scattered all over the place. ronald reagan up here with the 7.2%. >> right. >> winning. you've got ford and carter and bush in '92 losing with almost the same unemployment rate. the democrats in 1952 losing with a 3% unemployment rate and we can go on. >> a lot of that also has to do with trend lines. obviously the top one with reagan from 10%, 11%. >> that's precisely the point. the previous chart, first chart on trends and it was a good predictor. second chart was level. >> okay. >> let's go to gdp growth. >> and by the way, that's difficult for the president because the unemployment rate exploded the first year or two under the president and then came down. >> that's difficult for the president? >> what i'm saying, i'm saying it's harder to predict about the trend lines for the president because when he came in, you know, we hadn't bottomed out yet. >> that's true. with reagan it went up and came back down. the problem with the president it's not coming down it's flatlining. the unemployment per se is flatlining and that's his problem. to gdp growth under obama has been 1.5% in the second quarter. and so that puts him just a little bit, again, above the 50% mark. slight edge to obama. this is jimmy carter over here on the left. this actually up here is richard nixon in 1972, if you care. >> that would be 49 states. >> this is reagan in '84. >> 49 states. >> gdp growth. johnson up here in '64. eisenhower in '56. >> where's clinton? >> clinton in '92 -- >> '96? >> is actually right there. >> so gdp growth is pretty darn accurate predictor. >> gdp growth -- >> you're looking at four of those are the most massive landslides in american history. >> gdp growth actually explains about 60% of the results and the rest explained by other things. >> sure are good with numbers, steve rattner. >> i have sheets, i have help, i have alex whispering in my ear and something else for us. >> do you something else for us? >> i have two more charts. >> it's sta ticks class, it's monday morning! >> we're getting to one you like. >> you need to immerse. >> you can join this. >> one more chart for you. >> it's good. >> you like it. good. let's keep going. >> won't see this on any other channel. >> they will not. >> they're not doing this on "fox and friends" right now i guarantee it. >> they're proud of it, by the way. >> i need one more chart. which one are we going to do? >> tom arnold. >> income growth or presidential approval? >> i like -- >> do income growth. >> i want to see presidential approval. >> here's income growth. this one -- >> he has 20 more. >> income growth is interesting. predicts 83% of the outcome. predicted correctly 10 of the last 13 winners. this is obama's weakest chart because income growth has been so weak, only up about 4.4%. he's all the way over here on income growth. >> okay. >> and again, up here you have johnson in '64 and reagan in '84, nixon in '72 and so on. >> yeah. >> can i say one thing? >> i would love for you. >> the theory of the case of the romney campaign it's not about the macro statistics that get reported, it's about how people are experiencing the economy in their real lives and that affects everybody, not just people unemployed and not some macro economic statistics. that one may be not just a great historical predictor but most applicable to the conditions we're in right now. >> let's just talk macro politics, what's the big picture? what have people taken away? what people will take away going into the election, a lot of people i believe is, that this president has thrown the kitchen sink at the economy, when he had congress for two years, you know, we had the huge stimulus plan, we had health care, all these, and the president -- the president will tell you this, he understood, he had to do a lot of things, bank bailouts, auto bailouts, where he used all of the power of the federal government that he could to throw at this problem and people are going to be saying, okay, what do we get for it? was it worth it? we're $4 trillion, $5 trillion in debt. that's painting with a very, very broad brush. >> it all comes down to the president's ability to prove counter factual. to prove that if he hadn't done this stuff it would have been so much worse. >> you could -- you could make it a compelling argument on that front. that is so hard to prove the counter factual. if i had not done this, unemployment would be at 12%. >> also comes down to something else which is as president clinton famously has said a million times, you know, presidential elections is about the future and so to some extent people are going to be judging the past and the president's performance but also asking, who -- what are the proposals, the vision of these candidates for what to do over the next four years? one of the things -- >> just -- >> well, one of the things that romney keeps saying, we saw him in a bite earlier saying i know how to fix this, i think for some number of voters, the stubborn 6% or 7% undecided, they're not satisfied with the president's performance but want to know what the vision and ideas and strategies are that mitt romney has and the fact is that romney has not put forward a pretty -- very compelling case. conservatives agree about that. keeps saying i know how to fix the problem but all he says because i was in the private sector for those voters they want to hear what are you actually going to do that's different from president obama and why should we make it more effective? >> and so -- >> on both sides you're just not hearing the big idea moving forward. >> well, but, for example, last week, we heard one of his big ideas explored, which is cutting all the tax rates by 20% and the tax policy center came out with a study basically saying you have to eliminate 65% of not all loopholes but deductions, home interest mortgage, health care and everybody making less than $200,000 would end up with a tax increase. >> and then you have the president, out there talking about raising taxes on people making $250,000 or more and that's one of the things that right now, is scaring business owners. i mean i'm not talking about tax justice, just talking about what's your plan -- >> also 70% approval from the rest of the country. >> sure. but i mean -- >> popular proposal. >> come on -- >> lot more popular than what steve just outlined. >> and the question is, the question is, is that going to get the economy moving and do people believe that that's going to get -- i mean, my point just is right now, is that none of us have anything that we can, you know, put our arms around and say man, that is -- >> this is it. >> this is it. this is a way forward. >> haven't seen this before. >> this is a bold plan that just might work. >> all right. coming up -- thank you very much. >> good lord. >> chart palooza. >> that was good. >> in chicago this week. >> this weekend. >> how do you like it? >> he's a big at guy. >> a lot of -- >> a lot. but you know who he said killed it? >> who? >> black sabbath. >> wow. >> and he's not a metal fan. >> is that like kiss? >> they were great. it was black sabbath versus the black keys. >> osbourne like? >> he decided to go with sabbath. >> wow. >> said ozzy still had it. >> we're still on the air, this is what you do in the commercial break. >> i would have gone black keys in a second man. >> while you were gone, this is the whole show. >> really? >> like an episode of "spin magazi magazine". >> al sharpton will be joining the table when we come back, mike allen has an early look at politico's latest ebook on the 2012 race including new insight -- >> he doesn't like him. >> you see this. >> mitt romney -- what? no. >> i can't wait to see it. what happened? >> this new ebook, the president just loathes mitt romney. >> well -- no. >> doesn't like him at all. >> that's not true. >> he has a -- it's a dartboard up with his picture on it in the oval office. >> no, he does not. >> nasa landed a $2.5 billion robot on mars. that story and more. >> i'm very excited. >> in the morning papers. first, bill karins with a check on the forecast. bill? >> welcome back to you, mika. good morning, joe. the forecast, a little bitter today than what we dealt with this weekend. that humidity was off the chart throughout much of new england and the mid-atlantic and the thunderstorms were pretty nasty that rolled through yesterday afternoon and evening. in all 100 reports of wind damage from outside of washington, d.c., philadelphia, new york and up into new england. most of that wet weather is gone. a little exiting extreme portions of southern jersey. so your morning commute will be dry. it will be a nice afternoon. the morning still a little humid but the dry air will move in during the day. mid 80s compared to how hot it's been this summer. should be a beautiful monday summer day. the southeast we're still dealing with showers and storms. be prepared charlotte, raleigh from atlanta to florida. middle of the country, we had a little rain this past weekend. now we're going into a very dry period through much of this week. still going to be hot, not as bad as last week. still above 100 from dallas to oklahoma city. and it still looks like we're going to see a slight chance of storms around new orleans and birmingham. the worst of the drought is arkansas, kansas and now the drought is worse in oklahoma, too, and no rain in sight this week for all of those areas. by the way, the ernesto storm, no problem whatsoever for the united states. you're watching "morning joe" brewed by starbucks. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. ♪ three, six, nine ♪ the goose drank wine ♪ the monkey chew tobacco on the streetcar line ♪ ♪ ♪ clap, pat, clap your hand ♪ pat it on your partner's hand ♪ ♪ right hand ♪ clap, pat, clap your hand ♪ cross it with your left arm ♪ pat your partner's left palm ♪ clap, pat, clap your hand, pat your partner's right palm ♪ [ male announcer ] it's back. the volkswagen beetle. that's the power of german engineering. [ male announcer ] it's back. the volkswagen beetle. ♪ [ acou[ barks ]ar: slow ] ♪ [ upbeat ] [ barks ] beneful playful life is made with energy-packed wholesome grains... and real beef and egg. to help you put more play in your day. - one serving of cheese is the size of four dice. one serving of cereal, a baseball. and one serving of fruit, a tennis ball. - you know, both parties agree. our kids can be healthier... the more you know. 27 past the hour. this morning the fbi is leading an investigation into what police call a case of domestic terrorism. after a gunman opened fire at a sikh temple in wisconsin. it happened yesterday morning in the town of oak creek, south of milwaukee. seven people are dead including the suspected gunman killed in a shoot-out with police. one officer is among three people who were shot and injured. investigators are not releasing the name of the suspect or a possible motive. they do say the gunman was a white male in his early 40s. meanwhile, the investigation has moved to a nearby neighborhood where the suspect was living. let's turn now to the morning papers. "the wall street journal," there are reports of another midflight near miss on the east coast between an american airlines 777 and a military cargo plane. >> yeah. >> last year two planes were both flying at 22,000 feet towards each other at night when their wing tips missed by 2,000 feet. on board collision avoidance systems prompted the crew to make basic maneuvers avoiding disaster. the report blames tower miscommunication. >> steve rattner, you've been a pilot for 25 years, how common are the near misses? ? they're not that common. a few a year. >> okay. >> have you ever been involved flying for -- >> nothing like this. >> top gun thing where a guy is on top of you and like -- >> suddenly right there in your screen, no nothing like this. they are pure human error but having said that, if we had invested the money we should have in the infrastructure of our air system we would have a safer air system, a much more efficient air system, people would get where they're going a lot quicker, antiquated equipment. >> and -- but like everything is run by computers now. you wonder how this could happen. >> everything is run by computers except the controllers literally talk to each other on land lines still. if one controller is talking to another on a land line to say i'm going to hand you off such and such a plane, may miss this blip approaching the other one. >> to the los angeles times, roughly 1:31 a.m. eastern time last night, the mars rover curiosity landed safely on the surface of the red planet. >> wow. >> nasa's $2.5 billion science project will spend the next two years searching for signs of life on mars. >> and the "usa today," new study reveals honesty may improve your health. a professor at notre dame gave participants lie detector tests for ten weeks and found participants told fewer lies, they complained less about feeling tense or sad and complained less about sore throats and head aches. >> makes sense. >> "washington post," a white house photo of president obama holding a baseball bat with turkey's prime minister has created a stir. members of the turkish opposition were angered by the image. one lawmaker called it, quote, implicit insult and another suggested the president was giving orders to turkey's leaders. the prime minister's office said president obama has always been respectful to him. the white house says its shows how close the two leaders are. how close. >> i once had -- >> he could just like -- are you -- >> i remember talking to a boss -- >> certain type of caviar. >> that was hitting in a baseball hand looking at me laughing and told me no. >> told you you had no future in tv. >> we're not going to give his name, though. >> no. >> with us now, we have chief white house correspondent from politico mike allen, he's here with this morning's playbook that i'm telling you, all the kids, kids across america, like are up because they heard this story was coming. >> yeah. >> this ebook was coming. and they're in front of the tv sets. >> and want to see mike. >> what mike allen has to say about this shocking revelation from your e-book. mitt romney, barack obama, not going to be having thanksgiving dinner together. >> no. so true. we know how much the president dislikes the number two house republican eric cantor. he hates him, least favorite republican. turns out he hates mitt romney even more. this is great new stuff in e-book obama's last stand, by politico's glen tlush, part of the series that jon meacham edits and conceived, evan thomas wrote the introduction and aides around obama say that this real scorn that he has for romney has helped get his head in the game, fire him back up, for obama's last stand. >> why does he hate him? >> he says eric cantor at least stands for something. he said john mccain was a genuine war hero. he said even in the heat of hillary clinton, he didn't have this sort of personal dislike for his opponent. >> so what's driving it? why does he hate -- why does president obama hate mitt romney? >> now stop it. >> it's partly his way of getting up for the game and the book has this great explanation of the president's competitive fire and it starts with small things. he'll try and beat his former body guy reggie love that will fire him up. we're told he gets genuine anger if he suspects that either golf or hoops, someone is letting him win. on air force one, like president clinton before him, he's multitasking. president clinton famously played hearts all the time while president obama's game is spades. but he plays it in a foursome all the time with his photographer, pete suza, jay carney, and we're told that the president often will make phone calls while he's playing cards. >> wow. so this guy -- did you know this guy was so competitive? like hates people that he's like -- that's surprising to me. >> doesn't like to lose. >> thought he was sort of zen, like you know -- >> he plays cards. so what? >> laid back, cool and detached but he's a hater? >> i wouldn't put it that way. the will to win -- >> that's what you're telling us, mike allen. that's a shock to me. he always seems so kind of detached and cool. >> mitt romney's managed to poke through that and his aides say that's really helped. they were worried that earlier in the process, the president was a little zen, little cool about it, but that they say this is really gotten the fires going and shows why we're going to have the kind of fall we expect. >> it's whatever works for you. i personally for me i'm zen. i just kind of lay back. >> you're a lover, joe. you're a lover. >> i am. >> you're sort of gandhi-like. >> you know. i don't like to -- you know -- >> you don't like to be compared to gandhi. >> blago will make those comparison i don't like to compare myself to gandhi but yeah i am. >> a little gandhi-like quality about you. >> there is a little bit. >> i don't see you saying that mitt romney really got to me. i'm sorry. >> he got my goat or whatever. no. >> joe? >> yes. >> plea order the book now, it's only $2.99, cheaper than that fancy coffee you guys drink. >> oh. >> and obama's last stand by glen thrush, edited by jon meacham. >> $2.99? >> i've already preordered it. he sounds like crazy eddie. he's going to be selling like radios from the back of -- >> "obama's last stand". >> thank you for getting the plug in. thank you politico's mike allen. >> welcome back. >> yeah. >> thanks. >> that is mike. >> they got to go. everything's got to go today! >> prices so low there, crazy! >> they're insane. didn't he end up in jail? >> yeah. >> crazy eddie in jail. >> technicality. >> make money selling that book for $2.99. >> i don't think you do. they're creating a new way. >> giving it away. >> a new form. >> all right. let's go to willie geist. he's in london. >> i love willie. >> his jacket. >> do you miss willie? i miss willie so much. when will we get him back in the studio? >> next monday. i'm flying home sunday night, getting up 3:30 in the morning monday morning. >> we can't wait. we miss you. >> can't wait to get back. >> smooth on the air on the nbc sports network. >> yes. >> you can watch me again there today as long as we're doing plugs. let's talk more olympics. missed the top of the show we talked about usain bolt. they said he was out of shape. said he didn't train hard enough. they said he was too caught up in being a celebrity, his time had passed and then last night, he went out and dusted everyone in the world. highlights from that and more from the olympics when we come back. mom: ready to go to work? 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[ female announcer ] get the travelocity guarantee any way you book, including our new app. you'll never roam alone. welcome back to "morning joe." i'm willie geist here in london where it's 11:39 in the morning. mercifully not 6:39 like it usually is for the crew back home. at the top of the show, a little bit about usain bolt, did it last night, 9.63 was his time, olympic record, off his record of 9.58, broke his own world record from beijing. he said i sat in the block a little too long, didn't have the best reaction saying he didn't get a good start but really he said, i'm a good finisher. he was. 9.63. his countryman johan blake took the silver, thought to be the guy who could maybe beat bolt here. american justin gatlin takes the bronze. in the 400 meter final, an american gold for sanya richards-ross. she won with a time of 49.55, beat the defending british champion from 2008, richards-ross becomes the second u.s. gold medalist in this event joining 1984 winner valerie briscoe hooks. richards-ross is married to super bowl champion aaron ross, with the giants when they just won the super bowl. he's now with the jags. a super bowl ring and a gold medal for that couple this year. not too bad. oscar pistorius, known as the blade runner, one of the great stories of this game, running with two prosthetic legs, qualified for the semifinals the other day, ran but finished last in the semis. he said he was happy just to get to the semifinals. the whole experience, he said, is mind blowing, a dream come true. the man who won the heat turned immediately, jones, to pistorius, gave him a hug, said it was an honor to be in the same race as this great man. in gymnastics mckayla maroney, she was favored to win gold but fell on her second vault. you can see the picture right there. so she settled for silver. she said i didn't deserve anything more than a silver medal after falling. little disappointment for her but a silver medal. great day for the brits and great games for the brits. andy murray finally winning a gold medal beating roger federer in the final at wimbledon in straight sets 6-2, 6-1, 6-4. you'll remember about four weeks ago, federer beat andy murray in the wimbledon final so murray gets his revenge there and a gold medal. serena williams on saturday won the women's gold medal and yesterday, that was in singles, yesterday in doubles, with her sister venus, another gold medal. serena and venus take the gold. they won 6-4, 6-4, their second consecutive women's double gold medal. china and the u.s., pulled away from the rest of the field here in the medal count at the end of the weekend. china 61 medals, 60 for the united states. great britain has pulled into third, 37 medals including 16 golds. they're really happy with their performance here. here's what you're going to watch today, tonight on prime time, nbc, gabby douglas goes for her third gold medal of the games and competes in the even final for the uneven bars, an event she dominated en route to an all-around title. on nbc sports network, live coverage of the two women's soccer semifinals including the united states and canada. that's at 2:30 eastern time. winner gets to play for gold. and a little later on the nbc sports network, the dream team, plays argentina, led by man knew ginobili of the san antonio spurs. team usa edged argentina by only six points in an exhibition game last month. that's it for today from london. up next, mika's must-read opinion pages back in new york. keep it on "morning joe." 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[ explosion ] [ alarm buzzing ] [ rumbling ] [ people screaming ] it was such epic stain fighting, even chuck norris could respect it. twice the stain fighting power as the next leading liquid value brand. era, the only detergent that's chuck norris approved. i want to hear what rattner has to say about that. >> given lots of money to elizabeth warren. >> maxing out. >> she's fantastic. we want her to win. >> her convention speech. >> oh, my god. it's going to be so good. >> i know. >> she's amazing. >> going to be like the scene in "the dark knight." start going after all the rich people and breaking into their houses and -- >> elizabeth warren's piece in politico. first, joe has a really great piece from "the new york times" over the weekend. frankenstein takes over the market. this week yet another wall street firm most people have never heard of relying on a computerized trading program that they can't possibly understand, shook investors' faith in the market, trying to stay a step ahead of its competitors knight capital rolled out some new trading software. the software wasn't ready. instead of fulfilling customers' orders knight's computers went on an out-of-control spree of rapid fire buying and selling. even putting aside the havoc wreaked on customers you would think that preservation would be enough for knight to ensure its software worked but apparently not. wall street is as blindly reliant on computers on algorithms on high frequency trading as it was once blindly relying on the risk models that allowed toxic bonds to be rated triple a. wall street has created its own frankenstein. the machines are in charge. >> out of "the dark knight" and bruce wayne is broke this morning because of it. what's joe talking about it? >> >> slightly hyperventilating but the fact is there is a lot -- computers like we were talking about with air traffic control, play a big role on wall street. the problem is it's a little like appliance strobs certified before you can plug them into an electrical system. we don't really have procedures to certify software program like this before it plugs itself in to a global trading system and if it doesn't work it causes a big brownout like what happens with an appliance. >> how about more safeguards. look at what happened with facebook and that ipo, how do these guys botch this? >> too much reliance on technology and a faith. facebook was an usual event. i think what this highlights is the fact that we do need a regulatory system that gets more into the people who are, as i said, plugging into the financial system. >> what's facebook sitting at now? >> around 22. >> i said it would settle in at 26. i was wrong. >> you were wrong. >> 22. >> little too bullish. >> little too bullish. they've lost how much money have they lost since they started? >> $40 billion of market value. >> $40 billion of market value. >> yeah. >> that poor wife of zuckerbe zuckerberg's is never going to see a dime. >> i'm going to elizabeth warren this is in politico, entitled" stop rigging the system against small business." washington politicians line up ten deep to claim they support small businesses but avoid talking about a harsh reality. the system is rigged against small business. these owners can't afford armies of lobbyists in d.c., but the big corporations can. we've got to close the loopholes and end the special breaks so small businesses have a level playing field and a fair chance to succeed. if a business takes its profits to the cayman islands ships its jobs overseas, or finds a loop hope hole to avoid paying its fair share of taxes then that business now has a leg up over every small business and start up that can't take advantage of those loopholes. sometimes the big can get bigger, not because they are better, but because they can work the system better. that is bad for every small business in america. >> that makes a lot of sense, mika. i guess she's probably against the tax on small business owners to raise taxes on people making $250,000. >> you don't think this makes perfect sense? >> i'm glad she's fighting for small business so i'm sure she's against the president's plan to raise taxes on small business owners making $250,000. >> is the president's plan to raise -- >> made a good point. >> i have made a good point for once. steve marks it down. >> do you agree with elizabeth warren's must-read opinion page, steve rattner? you have to agree with it. >> how can you not agree with something so general -- >> it's not jenle. >> go to bloomberg's fund-raiser for scott brown? >> no, you're not. >> when is that? >> no, you are not. >> i won't even be here. >> middle of august. >> you have guests coming. >> all right. >> will your check be there? >> i'll let you know. i'll get back to you on that. >> how's that race going up there by the way? >> it is close. >> really? >> brown is a little bit ahead and both sides are pretty confident. it's -- it is a -- like the presidential race hasn't moved very much. >> and boy, she is advertising. >> raised so much money. >> she is advertising nonstop. when i was in indiana, you would see her ads like every -- in the every olympic break. okay. i was in massachusetts. every olympic break she's running ads. they're all over the place. >> mark said, it really is, really looks like the presidential race, both spending a ton of money, race is getting nifs and the numbers aren't moving very much. you wouldn't have thought both sides spending tons of money the race would be this close in a state so overwhelming democratic. >> is she great in those ads? >> she's pretty good. it's very interesting -- i remember, we were living in d.c. in 2008, and the second i heard terry mcauliffe's ads across the room, i said, the guy's going to lose. doesn't sound like a virginian. wasn't like i wasn't focused on it. i was in the kitchen, fixing a sandwich or something and heard that voice and it cut through, very instance with elizabeth warren. love the oklahoma accent but hear the car dealers and everybody else talking and that massachusetts accent and then you hear her, and it's a little -- it's a little jarring. >> is that -- >> sounds more oklahoma than massachusetts. again, i love that accent, i love that schtick, it works very well, but it's -- i don't know that guys in south boston are going to relate to that. >> brown's counting on that. the other thing that's distinctive about the races unlike the competitive senate races, this deal, no outside ads. you don't see the super pac ads there and independent groups. it's one on one and brown likes his chances. >> why do you think it's so close given it's a democratic state? because of what joe said or another sfln. >> because of what joe said and also the perception of the state as being as democratic as it is, has been counter factualized, whatever the word, by reality, which is republicans can win if they're a certain kind of republican. >> you say -- i always say there ain't no win a republican is going to win massachusetts when president obama's on the ticket. and then you listen to scott brown's commercials and then you look at him, this guy -- forget ideology, everything else, he is such a massachusetts guy. >> i bet most people want them both. she's one of the more credible candidates i've ever seen. sorry. >> and again, i'm not -- they're both great candidates but this guy is the guy i sit next to at boston red sox games. >> she's the guy i sit next to at boston red sox games. >> would you agree? he fits the state. >> and he has a lot of democrats doing ads for him. >> reverend al sharpton joins us next. >> that said, he has an uphill battle. >> we'll be right back. with the spark miles card from capital one, thor's couture gets the most rewards of any small business credit card. your boa! 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[ male announcer ] every day we help students earn their bachelor's or master's degree for tomorrow's careers. this is your moment. let nothing stand in your way. devry university, proud to support the education of our u.s. olympic team. devry university, proud to support the education well hello, welcome to hotels.com. summer road trip, huh? uhuh yep uch let's find you a room. at hotels.com, you'll always find the perfect hotel. because we only do hotels. wow. i like that. nice no. laugh... awe uch ooh, yeah hmm nice huh book it! oh boy call me... this summer, we're finding you the perfect place - plus giving you up to $100 at hotels.com coming up is social security still a good deal for workers? >> no. >> a report shows for the first time retirees have paid into the system more than they will get back. we'll talk to the author of an explosive new article just ahead. first, the reverend al sharpton. >> this is big. >> joins us here on set. good morning. 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>> i'm not. >> and for what was that second? >> more take home pay. >> that is not true. >> more chickens and more pots. >> and getting rid of chicken wheat in the backyard. >> and paying taxes. >> and christmas every day of the year. >> right. >> who could be against that. >> hooray for the 1%. >> ice cream for breakfast every day. >> i'm voting for this guy. >> oh, my gosh. >> welcome back to "morning joe." mark halperin and john heilemann with us, joining the table the host of msnbc's "politics nation requested and president of the national action network reverend al sharpton. good morning. >> good morning. >> all the blueberry pie you can eat. >> yeah. >> who can be against that? >> with ice cream for breakfast. >> for breakfast. breakfast of champions. >> was that ad not accurate or just me? >> what are you talking about? it's probably just you. >> uh-huh. >> and me. >> and you. what a surprise? i'm shocked you both didn't like the romney ad. let's get to the news. what do you say? >> both romney and obama campaigns are looking to seize on friday's monthly jobs report which saw 163,000 jobs added in july. twice as many as last month and more than 100,000 than wall street annualysts were expectin >> that's good news, right? >> signs of weakness as the unemployment rate remains stubbornly high. >> we've had 42 straight months with unemployment over 8% and this was a president who said that if we passed his stimulus bill, we'd never go above 8%. that's 23 million americans out of work or under employed and those are real people. i'm very concerned about how we can get americans back in good paying jobs with a bright and prosperous future. let me tell you, i know how to do it. >> we haven't had to come back from an economic crisis this deep or this painful since the 1930s. but we also knew that if we were persistent, if we kept at it, and kept working, that we'd gradually get to where we need to be. here's the thing. we are not going to get there, we're not going to get to where we need to be if we go back to the policies that helped to create this mess in the first place. >> you know, mika, that's pretty bad. >> it's a very hard argument to make. >> 42 weeks of unemployment over 8%. that's kind of bad. >> it's a very difficult argument to make, to say this is what would have happened and what could have happened. >> yeah. that is. and therein, mark halperin, is the president's biggest problem. if you're mitt romney, you slice a clip you say pass our stimulus plan we'll have unemployment below 8%, and then you -- which is a stupid thing -- just stupid. a stupid thing to predict. and then you've got 42 weeks of unemployment over -- or 42 months of unemployment over 8%. so the president's stuck making the counterfactual argument if i didn't do this, unemployment would have been at 11, 12, 13% and that's harder to make in the heat of a presidential campaign, isn't it? >> i spent a couple days out in the battlegrod state in las vegas and watched a lot of tv ads and the ones that break through, the most negative ones against the president, use the clips of him saying stuff like that. there's a lot of material like that. republicans have already used some and will use more. it's the -- as you're suggesting the toughest thing for the president to fight back against. >> do you know that the ad that talking about just watching all of these ads run nonstop, during the olympics, john heilemann, i think the ad that cuts through is president obama -- sort of makes you stop -- between all these negative -- he promised this and that, and there's just the president talking. >> yes. >> and so relaxed, it just sort of -- it's one of those things you walk through the house and stop, even though i've seen it five or six times, you stop and look, it's the president of the united states. >> this president, look, he has as we know, from the polling and anecdotal experience one of the great assets they have, one of the greatest assets is him, extent to which people like him, feel invested in him, trust him, in every personal attribute he leads romney by a large margin. that ad codifies the argument they want to make and features him in a personally compelling way. that ad is effective and compelling. to your point earlier, one of the huge mistakes they made was they should never have talked up the economy before it was not -- before -- they can't predict the 8% thing, in 2010 they declared it recovery summer. you can't brand a summer recovery summer, and then not deliver a recovery. because people feel like their expectations are raised and that is as big a problem as anything else. the president had been more -- talked the economy down more in that first year and a half, the improvement would now seem like greater than what we have, which is a tepid recovery after having had some very big promises made. >> you can win, al, as a president, a sitting president, with a bad economy, if people think that you're trying and it's getting better. you look at 1936 and you look at fdr. things weren't any better in 1936 really than they were in 1932, but he just absolutely destroyed al flandan and we're always talking about the '36 election, you and me. >> of course. >> because people believed that things were getting better. but they did say some things early on in '09, '10, unemployment will be below 8% and the summer of recovery and now they have to prove that counterfactual. >> you're right. this was said and this happened you're got a good commercial against them. i think the counterargument is that for 29 consecutive months private sector jobs have been added, not at the level that we want, but they've been added, and the question becomes, i'm president obama, i've added private sector jobs every month for 29 months, even though unemployment has not gone where i wanted, my opponent would do what with those jobs increased or decreased, where's his plan? his plan is the bush plan. >> let me ask you as a man who has been a public speaker for what, 30 years, 40 years, however long, i know you -- >> not back to '36 but for a long time. >> so would you rather put together a -- let's call it a sermon, would you rather put together a sermon making the argument you just made, which, you know, would put your parishioners to sleep in about five minutes, or would you rather say, hey, things aren't perfect but guess what, if i hadn't done what i did, your atm machines would have stopped working, detroit would have gone bankrupt, like you could put together a sermon like that and have people on their feet. i'm just surprised the president's people and the president hasn't gone after that more aggressively. >> i think that's the sermon if you want to call it a sermon. i think that is what's going to rally the troops and i think that's what he and others will do at the democratic convention. >> the president delivers the sermon. >> if he delivers it, because i agree with them about likability, but what i'm also surprised, is that romney has not been able to come with a sermon that has really resonated anyw anyway. >> that ain't happening. >> when the preacher can't preach to his own choir it's time to get a new preacher. >> that's not good. >> and again that is like somewhere in the most cutting critique of what romney -- of romney's failure to outline a vision for the future comes from conservatives. you hear it all the time, from conservatives that romney has not either made a compelling policy argument about what he would do or done the pivotal thing of marrying up how his business experience translates into a successful presidency conservatives say that as you know, joe, over and over again. >> as reverend al said, those are his people, should be singing in the song book with him. >> i say it, a lot of conservatives, most conservatives behind closed doors say they aren't stupid like me, they don't say it on tv so they don't get killed by the party, but you hear it all the time. if i were running mitt romney's campaign i would lock him inside a room for five days and make him watch speeches of margaret thatcher in 1975 and '76 and ronald reagan in '79 and '80 because you can't help watching those speeches and go, oh, my god, yeah. i mean even liberals watching margaret thatcher in 1975 when great britain was -- i mean it was a socialist country. and she said, we're going to get video individuals the power and talking about free markets and all these things that mitt romney just doesn't feel in his gut. he doesn't feel it. maybe he believes it. but i watch him, and what i think, and what other conservatives think -- real conservatives not people that call themselves conservatives or label themselves republicans, but real conservatives small government people who understand friedman and buckley, they know romney doesn't get it. >> we live in an era of hype where we make a lot of events seem bigger than they are or should be. his convention speech is huge because he must argue conservative principles to the center of the country. that is what effective republican presidents like ronald reagan and george w. bush as a convention speaker did and for bush '41 did in his convention speech in '88. he has to go out and make a conservative case to the country in a personal way. it's going to be a huge, huge opportunity with great peril for him because he's never given a speech like that. >> what's so frustrating is, he has -- we're talking about sermons, i know the sermon i would give if i were president obama. >> right. >> i would give it, it would be a fiery sermon and mock and ridicule republicans as a do nothing congress, but if i were mitt romney, holy cow, i could go on for two hours. he promised us unemployment below 8%. he passed the largest spending bill in the history of the united states. his own congressmen and senators admit they didn't read the bill. then he tried to pass cap and trade. then he passed obama -- on and on and on and where has it landed us? it has landed us in a great recession with 40 -- with 42 months, on and on. ronald reagan could kill on this speech. he could give this speech a sleep. true conservatives that really understood milton friedman and frederick hayek could go to town all day. and he seems incapable. >> there still are three major opportunities for him to make a mark. i don't think he will, but maybe he will. that would be the convention, the debates which would be fascinating. >> i think he'll do bell in debates. i think he's going to do well in debates because they're very controlled and you can -- you can read your lines. >> i can't wait to see those. the vice presidential pick. >> i think the convention, though, i think you're exactly right, i think the convention speech -- >> it could be huge. >> because the morning after that convention speech, if they do it right, i'll be on the air going, maybe he does get it. >> this is it. >> mark's last point is to me the pivotal one. you think about reagan in 1980, clinton in 1992, you think about george w. bush in 2000, you think about barack obama in 2008, they had been giving good speeches for months, for a year beforehand where you could see, by the time they got on stage and gave great convention speeches it was not a surprise to anyone. people knew those guys had the ability. they've been working towards that speech, little by little. for a year. >> they'd saw reagan four years before do it. >> the question with romney, can he rise to this occasion with such high stakes, having never given a speech really like that. he has not been building towards it, not done it effective in his candidacy so far. >> the problem he has, and you make an excellent point, by having never given this kind of speech before, having never shown he can connect with an audience before, you don't make a connection with people, you don't have this kind of identity with people and people feel your gut, in one speech. you either do that or you don't. i disagree with ronald reagan on most things but you would be captivated by it and felt he meant what he was saying. the problem with romney is not only is he not a good yor ra tore, you don't feel like he believes it. how can we believe it if you don't believe it? >> for the great speakers, i remember watching mario cuomo, i didn't believe anything he said, he gets halfway through his speech and you go -- maybe he has a point. just like when you watch ronald reagan, i disagree with him and i go that's a pretty good point. >> one for romney, bush '88, out of nowhere, none of us thought he could do a speech like that, peggy noonan wrote him a great speech. they're very smart people working on romney's speech. bush '41 stepped up and changed everybody's impression of him. he was down 17 points and gave a speech made a big deal. romney has to do the same thing out of the blue. >> got to do it. >> his best speech, his announcement speech in new hampshire, when he announced for president, on the night of the new hampshire primary, his speech at the naacp. >> you are exactly -- i think we were all watching, we were all together the night of the new hampshire primary. >> that was a great speech. >> and we turned it off and we were like wow, okay, maybe this guy, maybe this guy gets it. but -- >> this will be out of the blue if he pulls it off. >> you saw him after that. thought about the opportunities, the way that obama and hillary clinton just to go back only one cycle, on successive election primary nights each one topped the other one and rose -- raised their game. week after week after week. romney gave a good speech on that night in new hampshire and then didn't do it in florida and didn't do it in michigan and in illinois and didn't do it on super tuesday. didn't progressively get better and that i think is why -- again, why the stakes are so much higher. you didn't see him make that progress. >> right. >> it's not that far away. it's a couple -- it's a couple weeks. >> wonder. >> it's just a couple weeks away. >> oh, my god. >> some speech in north las vegas last week he was okay but wasn't building towards captivating the nation. >> not getting better. >> we're a couple weeks away and this is just out of nowhere, but i'm just curious, vp sweep takes. >> there's some word it could come earlier. >> might come earlier. what do you guys hearing or what are you guessing? do you have any gut? >> rob portman next week. >> what do you think, john? >> ditto. >> you know, we had the move to pawlenty and i like the guy an awful lot, but i think it's rob portman. because you know what, i really like tim pawlenty and i hate saying this on the air, but it's the reality f i'm in the romney camp i like this guy so much, he was great, a great governor as far as a republican in a swing state, but he had a pretty disastrous campaign. >> and specifically to mika's point about how important the vice presidential debates will be, what did tim pawlenty do in the two debates he debated in, got beat by michelle bachmann. i'm not confident if i'm romney he's going to be able to go toe to toe with joe biden. >> and by the way, i mean, reverend al, you remember 2000, we all remember 2000, in ohio, we remember 2004, in ohio, and it's -- it's hand-to-hand combat, cleveland versus cincinnati versus whatever, and man, having a senator who's pretty popular -- >> portman is very popular in ohio, makes political sense, and i agree pawlenty did not perform well during the primaries. talking about where is he going to come from with his speech, romney, where would pawlenty come after his run and show some kind of ability now? if i were on be that side, i would think portman is probably the safer choice. but who knows. every time i predict romney will do something logical he surprises me. >> it's a safe choice and it seems to me to be a smart choice. >> is there anyone else? >> talk about strickland from the page, what strickland said yesterday. >> what did he say? >> you know -- >> ted strickland, former governor of ohio. >> democratic governor, as partisan as you'll find, was asked on shows yesterday, what do you think of portman as a pick, had mild criticism but said he's a really nice guy, be a strong pick. democrats will have trouble criticizing the portman pick. i don't think romney wants a pick where there's a big national debate. a pick where people said you made a smart choice, competent choice, responsible choice, and now let's go back to talking about the economy. >> one thing i would always say to people that would come to me and say what do you -- what's your argument -- how do i win my campaign? i'm like, dude, it's all about contrast. how are you different from the other guy and for me i was very young, guys i was -- i was running against in the '50s and '60s i was all the youth and maybe sure everybody knew i was 20 years younger. in this case with romney, don't go for this exciting pick. and i'm dead serious. rob portman is not the most exciting guy in the world, but what a great contrast to say, listen, we tried the rock star thing four years ago and it didn't work. we're not the most exciting guys in the world, but we'll get under the hood and we'll get this country running slowly but surely. i think it's actually -- you can turn a negative into a positive and say that's -- >> and work across the aisles. he is as popular with democrats in washington as anybody. >> and the press likes rob portman too. >> he has been the guy who played barack obama in debate prep with mccain, played debate prep with george w. bush. he's been practicing to do a vice presidential debate effectively for the last three cycles in a row. a guy you have -- if you're romney you have confidence he's at least can draw with biden. >> by the way, just -- >> i got to say the other side, people say he did this for george w. bush, did that. who cares. nobody's going to care. voters aren't going to care in ohio what positions he held for bush and deficit. they're just not. >> on twitter liberals say people will care. >> good. hey, by the way, i just want to say this, i really, really like tim pawlenty and i'll be very excited if tim pawlenty is selected and it would be a good selection. i just think portman and ohio makes too much sense. >> is there anyone else? no. >> there is a paul ryan boomlet over the weekend. >> they're not going to pick paul ryan. i love paul ryan. >> the conservatives, bill crystal at the weekly standard are pushing a conviction pick, pushing rubio or ryan. you know, there's some chatter about that. >> there's chatter. ideologically i would be thrilled if they picked paul ryan. they're not going to pick paul ryan. i would be thrilled. >> i would be thrilled. it would energize our base to come out and vote. >> if they picked paul ryan we would have a great debate. >> i could preach that one. >> i would be thrilled about paul ryan and preach it until the cows come. that would be a choice. >> it would be exciting. >> al would like to see rick santorum on the ticket. that would be a winner. >> that would be bliss. >> that would be great for you. >> if they pick paul ryan you'll do a week of shows on paul ryan. rob portman, barely an hour. >> pick paul ryan -- >> you would have to come on at 5:00. >> let me come on and debate it for an hour. i would love it. >> we should do that. >> stick with us, al sharpton. >> i will defend paul ryan all day. >> up next, campaign sloganearring, on how president obama and mitt romney are each desperately trying to prove they're the one that can save the economy, but first, bill karins with a check on the forecast. bill? >> good morning to you, mika. when i left you on friday we had our incredible heat wave we were dealing with and tropical storm ernesto. we weren't sure if it had a chance to head for the u.s. or not. over the weekend two good things happened. the storm remained weak and went further to the south. the odds of this coming up into the gulf to anywhere near texas is very slim to remote right now. but it looks like it's beginning to intensify and heading for honduras and belize over the next two days. the forecast track of this storm. again, has a very slight chance of becoming a hurricane right before landfall as we go into wednesday and then it should travel over the ukattan affecting mexico primarily. the odds of heading to south texas very remote at this point. a nice, quiet day around the country after all the heat and humidity and thunderstorms in the northeast, a nice afternoon as the humidity levels begin to go down. no airport delays, unlike yesterday. the southeast, you have the best chance for airport delays from atlanta to charlotte and raleigh, through florida. middle of the country, after a little bit of wet weather this weekend you're going to dry out with hot conditions returning and we were very hot on the west coast, portland, oregon hit 100 degrees yesterday. looks like you're going cool off for a beautiful monday yourselves. 30 rock, new york city. that's the plaza. beautiful spot there. the "today" show is at the olympics where they're having a nice day. you're watching "morning joe" brewed by starbucks. 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[ male announcer ] the capital one cash rewards card. with a 50% annual cash bonus it's the card for people who like more cash. what's in your wallet? i usually say that. if you got a business, that -- you didn't build that. somebody else made that happen. the internet didn't get invented on its own. government research created the internet so all the companies could make money off the internet. the point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. >> to say that steve jobs didn't build apple, that henry ford didn't build ford motor, that papa john didn't build papa john pizza, ray crock didn't build mcdonald's, that bill gates didn't build microsoft, you go down the list, that joe and his colleagues didn't build this enterprise, to say something like that is not just foolishness, it's insulting to every entrepreneur, every innovator in america and it's wrong. >> 28 past the hour. joining us now, staff writer for "the new yorker," ka least, who writes about what's behind the political back and forth that occurred after president obama's speech in virginia last month. writes in part, both candidates tend to wax nostalgic when they talk about the economy while romney enthus about his visits to factories and lumber yards obama yerns for the era of grand railroads and dominant american car companies. they share the conviction that fixing the economy returns to an older, better version of america and partly a matter of reconnecting with whatever spirit once made us great. romney views his task mainly in negative terms, if elected he promises to prevent the federal government from stifling private enterprise so that the innovators and capitalists can go on innovating and capitalizing. obama must make an even trickier argument having presided over a disappointing recovery, he must nonetheless convince voters that they should stay the course. the idea is that despite some contrary indicators, america's revival has already begun. now all voters have to do, as a not so small business man once said, is believe. >> of course, i am in the minority here, once again, on this argument that keeps coming up. i wouldn't say that it's a negative argument. i would say it's -- personally i believe it's a positive argument that romney and conservatives are making which is, let's give the power back to you. let's not have the federal government -- but your point is a great point, this, this silly little debate, does more than anything else to explain the ideological divide between small government conservatives and interventionists progressives. >> i think the argument is negative in this sense, when romney talks about scary tax hikes, that choke big business, he's talking about tax hikes in the future. and so one of his most powerful arguments is, if you leave this guy in office he's going to raise income tax rates on people who make more than $250,000 a year, it's going to be terrible. as opposed to saying, he did something really bad with tax rates in the last four years, and i'm going to fix that. in a weird way they're both running to say the other guy is going to make things even worse. that's the sense in which i meant that it's a negative argument. >> talk about your overall argument and talk about the ideological divide here, which i say, goes back to george washington's first cabinet, you know, alexander hamilton versus thomas jefferson. >> you always have a similar ideological divide. i think the difference here is that both candidates feel a little bit hemmed in, right. obviously obama has to make this argument that he'd be more natural maybe making the argument i'm going to help the middle class, help people that don't have much money, but having been in office already he has to make sort of the opposite argument, things aren't that bad he has to say. things are sort of getting better. that's an argument that kind of cuts against who he is a little bit as a politician. >> right. >> but okay, go ahead, john heilemann. >> i just want to think about -- i mean, to go back to this, the question joe was getting at a second ago, do you think that -- this debate we had over you didn't build that and whether it was in context or not in context, does seem joe's right, it does illustrate something deeper. does that seem right now? >> sure. it certainly -- there's a sense that the two emphasize different things. they're both saying what i consider to be truisms, yes, of course, enterprise and individual innovation is important and, of course, no one does it alone. these are both kind of impossible to debate. it's true that the parties emphasize different things and this emphasis comes out in what's a debate about whether then to tax rate should be 39% or 35% or a little lower. always these grand philosophical debates that are these relatively narrow policy differences. as jon meacham says, the narcissism of small differences, 35% or going to -- not back to 95% in the 50s, but 39% in the '90s under clinton. it really was. what's fascinating to me as i watched our show, i was off, of course, which i just -- it's just what i do, i'm off most of the time -- >> i didn't watch when i was off on vacation. >> i was going to say. >> i was watching and everybody thought this is the craziest thing in the world and i didn't hear the clip until later on and when i heard the clip, i insinktively had a visceral reaction, what's he talking about. he's crazy. what's he talking about. >> i did not. >> of course these guys built their own business. that's what makes america great. i'm not saying that to attack the president. i'm saying, i was fascinated by my own response, not by what he said but the tone he used while saying it, going -- i'm not saying he doesn't get it. my gut as a conservative was, this guy doesn't get it. >> and it lets romney pivot to doing these we did build it video clips with owners of other small businesses. romney is a guy who built a successful business. >> good. he can put that in an ad then. >> he doesn't want to talk about this. >> right. >> and lets him pivot to talk about other businesses. >> isn't that the point of your article that really both of them are arguing an america past that resonates to their crowd. >> yep. >> i think this is what this election may come down to. is defining what america we want. >> right. >> and they're really sincerely two opposite opinions of that. >> the america that votes tends to be the factory, industrial jobs. >> how do we get there? >> right. >> of course, what would be the revolutionary idea is if you had somebody actually in the middle. saying listen, we have to take care of the long-term debt, but in the short-term rebuild our infrastructure, aviation, internet, do this, that, make short-term investments, take care of the long-term debt, grow the economy, assure the world markets we've taken care of ourselves over the next 30, 40 years but nobody can say that because if you say that the liberals are mad at the president for talking about entitlements and conservatives are mad at romney for talking about investment. >> how much voter care about the debt deficit issues. what drove the conversation so much during the four years and now that the presidential election rolls around it's not clear that's top of voters' minds or that either candidate wants to run on debt/deficit iss issues. >> or raise the argument. >> party always wants to talk about -- >> if you raise the argument, say joe made "morning joe," but god made the morning. >> there you go. >> oh! >> i bet. >> that's a slogan. >> look at that. >> look at that. that's sloganearring there. >> you did not do it alone. >> mika built snooj the article in the latest issue -- >> "morning mika." >> thank you so much. >> can we call it "morning mika" over the next five years. >> you built it. >> still ahead, the social security shift. we'll look at sobering analysis on what retiring baby boomers can expect to receive in benefits or what they won't receive. more "morning joe," in just a moment. ♪ [ male announcer ] it started long ago. the joy of giving something everything you've got. it takes passion. and it's not letting up anytime soon. at unitedhealthcare insurance company, we understand that commitment. and always have. so does aarp, an organization serving the needs of americans 50 and over for generations. so it's no surprise millions have chosen an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, they help cover some of the expenses medicare doesn't pay. and save you up to thousands in out-of-pocket costs. to find out more, request your free decision guide. call or go online today. after all, when you're going the distance, it's nice to have the experience and commitment to go along with you. keep dreaming. keep doing. go long. to go along with you. it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter. all right. there are big developments in syria this morning where the country's prime minister has defected to jordan with his family. >> is that bad? i'm just curious, is that bad for assad, that the prime minister's defected? >> another three cabinet members -- >> i'm not richard haass but thinking that's probably pretty bad. >> have done the same. the violence in damascus rages on with a bomb rocking syrian state television earlier today. meanwhile, there is growing concern about al qaeda's influence in the 17-month long conflict. it's something our chief foreign correspondent richard engel learned about firsthand traveling with a rebel group through the war zone. >> rebels from the justice brigade meet at one of their headquarters and head out on a scouting mission for an attack on a syrian military checkpoint. they move to a hill top hidden among olive trees they can see syrian troops on a road below and discuss how best to ambush them with bombs and machine guns. from here they can see the syrian military positions that they plan to attack and there appear to be five, maybe six armored vehicles. but the brigade commander tells us, the mission must be called off. ali and his men are deeply frustrated. it's the second attack they've had to cancel for lack of weapons in two weeks. ali's men don't have enough weapons to fight and they're dying. we've been with ali's unit on two trips for nearly a month. his fighters are secular, welcoming to foreigners, not religious extremists. so we were shocked by what ali told us. al qaeda, he says, has offered his unit money and weapons, and he's willing to take it. >> translator: we will accept arms and money from anyone, even al qaeda. >> reporter: ali's brother and top lieutenant ahmed, who has no interest either in al qaeda, was even more insistent they take al qaeda's offer. >> translator: i will go to them and raise their flag if they give me support. >> reporter: ali and ahmed say they'd rather have support from the united states, the u.n. or europe, but it hasn't come. without support, al qaeda could make major inroads in syria among rebels so desperate for help they'll take it from anywhere. >> nbc chief foreign correspondent richard engel reporting. up next "esquire" goes inside the debate over the politically infamous keystone pipeline. a look at the environmental and political implications of pumping oil from canada to the texas gulf coast. we'll be right back. ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? 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[ male announcer ] one pill each morning. 24 hours. zero heartburn. joining us now, writer for "esquire" magazine, john richardson who writes about the much debated keystone xl pipeline designed to carry tar sands oil from western canada to the texas gulf coast. he writes in part, when you arrive at night in fort mcmurray, the little canadian town that might just destroy the world, the tiny airport looks smaller because of the snow and ambitious ramp enters a highway so wide the shoulders must be in different time zones and trucks the size of dinosaurs roar by belching clouds of steam and snow. largest of all are the hauler trucks that pull articulated hoppers piled with tons of black sand. here they gouge and siphon that black sand from deep in the earth through a process turning it into something resembling crude oil. nearby lie the beginnings of a 1900 mile international pipeline the keystone xl, it's called that, it will carry millions of barrels of stuff every day down through the bread basket of america through the gulf coast of texas where it will be refined and shipped to the emerging economic powers of the world. this little berg is the greatest source of imported oil into the united states and now it also finds itself central to the fight over global warming and the future hab by tallty of planet earth. >> you call fort mcmurray the little canadian town that just might destroy the world. >> >> wow. >> by the way, i always knew we had to keep our eyes on the canadians. that's why i said we should have invaded them years ago and take than oil. >> they invaded us once. we owe them. >> talk about why you say this little town might destroy the world? >> james hanson, the government's scientist that said if we exploit all of that resource, which is a lot of -- which is going to take a long time, that it will put a carbon burden on the earth that will drive us above the two degrees, which is the target, significantly, as far as six degrees or who knows how high. so, it sort of -- it's -- you know, the thing about this is that people will throw statistics at you in different scenarios until you're dizzy, but basically if they exploit all of that it will be really bad. >> you say really bad, people that see that -- some people see that as a positive, but it always seems like the argument if you're talking about the arctic refuge or you talk about the gulf coast, everybody always has the argument, well, there's not enough oil there to justify going into alaska or into the gulf coast but here you say actually there is a massive source of energy up there that really could have a huge impact either in a positive way if you're talking about oil here or a very negative way if you're talking about global warming. >> it's big and not just canada because other countries have them, madagascar has got them, they have them in venezuela, big fund which they're starting to develop now. it's a little bit -- the canadians feel very put out we're saying this is going to destroy the world or going to cause those kind of problems, although they're very aware, much more aware than we are down here, of the extent of the problem as described by scientists. but -- it's just -- it's more of a cumulative problem rather than that one specific. it's like if we're cumulative problem more than that one specific. if we're targeting this and we're going to keep developing this, there's so many other things. everybody's pointing fingers saying, it's not as bad as coal. it's not as bad as coal, but everybody, in this argument, as i've studied it over the last couple of years, everybody's sort of trying to push it out and say, we're not the bad ones, or other people are worse. >> somebody else. >> but cumulatively, according to the scientists that study this stuff, the numbers keep going up, up, up, up. >> mark? >> how does the political debate in canada between environmentalists and people interested in the job situation differ from the debate here? >> it's gotten incredibly toxic. i was shocked. it's a lot like the debate down here, only with real money involved. when we talk about alaska, as you point out, it's a small amount. >> right. >> but this is the economy of canada we're talking about, so it's a bitter argument. and what's really interesting is that, you know, they're canadians. >> they're not supposed to do that! >> but also, you know, they have a carbon tax in alberta, which is exploiting this. they have the one in british columbia. they've got a strong environmental movement. and, so, i think they're not -- they're in a really complicated situation, because not that many of them are saying, this is just a big joke and evolution doesn't exist and we can't trust scientists. they're not saying that. what they're saying is, we don't want to think about it, because this is our economy. it's funny, i talked to a kid in a hippie store, and i was like, what do you think about this. because she was denouncing the conservative government of stephen harper, and she said, well, it paid for my college. >> you were in the store to get a t-shirt -- >> no, i went in to do journalism, like, what does the left say? >> a good place to go. canada is estimating, though, this could be $45 billion a year to the united states and a half a million jobs over the next couple of decades. so this is big money for the u.s. as well. >> you know, the left says it's 10,000 jobs or 20,000 jobs, which is really a misnomer. it's a lot of money, a lot of oil, a lot of pumping stations, a lot of truckers. it's going to be direct jobs, 10,000 or 20,000 over the next couple of years. but when you get natural resources out, money follows and flows. there's no denying that. and the political problems of wrestling with it seem overwhelming. >> reverend, you know back in 2000 -- you ran in '04. >> right. >> in '05, i think it was, especially, al gore came out with "inconvenient truth." it seemed like everybody really was focusing '05, '06 on global warming. and if you asked any questions about it, you were a heretic and almost burned at the stake. but something's happened the past couple of years. you look at the poll numbers, there's been almost a backlash to that. >> there's been a global shift. >> global warming is just not -- or climate change, a term i like better, is not just -- doesn't have that oomph and the impact, even inside the democratic party, that it did just five, six years ago. why is that? >> i think because a lot of people on -- in the middle began accepting it as not extreme, so i don't think you have the polarization and the argument that you used to have. you don't get people as fired up, because i think some aspects of it have been more accepted. but i think this, the keystone project certainly has some polar opposites and some fire in the debate. >> do you have an answer to that, john, what's happened over the past five or six years, why there's been more skepticism, let's say? >> well, there was definitely a campaign, you know, funded by oil companies and encouraged by their supporters and mostly in the republican party, i think, but beyond that, i think everybody has the same problem, which is a mental shutdown. we don't -- because we're implicated in it, because there's some truth to the idea that we all drive cars and we all heat our houses, it's like something we don't want to think about. >> right. >> all right. the article's in the latest issue of "esquire." john richardson, thank you so much. >> thank you, john! >> more "morning joe," next. >> watch out for the kapdians! this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. reverend al sharpton, thank you. we'll see you at 6:00 eastern time. >> thank you, reverend. >> for "politics nation". >> you were too nice to me today. they're going to kill you on twitter. >> insult joe a little bit more. ahead, murder and the mob. in the city of los angeles, how the lapd waged war on organized crime after world war ii. and up next, the head of the rnc calls harry reid, quote, a dirty liar. we'll tell you why when we're back in a moment. i actually like kerry, but what he did on the floor of the senate is so out of bounds. i think he's lying about his statement, of knowing something about romney. so this is what's wrong -- >> that's pretty stiff. you think the leader of the senate is lying? >> yeah, i really do. i think he's created an issue here. i think he's making things up. and at a time when the country is just about to fall apart. >> we can put all this stuff to rest tomorrow. mitt romney can go to kinkos, he can photocopy his tax returns, there's several hundred pages, he can hand them out to people like cnn, hand them out the reporters all over the country, and we wouldn't talk about this tomorrow, we wouldn't say, is he paying taxes? what's he paying? the whole world would know exactly what loopholes he's taking advantage of. >> good morning. it's 8:00 a.m. on the east coast, 5:00 on the west coast. time to wake up as you take a live look at new york city. back with us on set we have mike halperin, and willie geist at the london olympics. >> willie, i know this is an especially difficult morning for you to be on the show, and i want to just thank you this morning, because a lot of people who saw the world record broken last night would not have the strength to come on this morning and just wake up and do the job. but you are now the second fastest man in the world. >> reporter: yeah, i know. i think i talked too much trash before the race. unbelievable what happened here last night. >> were you whispering to bolt last night? going, going, you have weights on your shoulders. what were you doing to trash talk him? >> and you know, a lot of people were saying that to him, before the race. he'd heard that he was maybe lost a step, he wasn't training hard enough. so he went out last night and ran a 9.63, which is an olympic record. which, by the way, was with a bad start. he said, i stumbled out of the blocks and had to make up some ground and still ran a 9.63, an olympic record, just shy of his own world record, which is a 9.58. it was a crazy scene. there were 80,000 people. you could not get in. i had one member of the dream team, a professional basketball player, say he had to pay some guy 2,500 bucks just to get into the door to watch this race. it was a heavyweight fight with the whole world watching and he delivered. >> i'm going to politics now. >> go ahead! >> republicans are ramping up their attacks against senate majority leader harry reid and his claim that mitt romney is withholding his tax returns. well, that's not a claim. he is. he says he's doing it because he may not have paid taxes over a ten-year period. that's according to what the senate majority leader called a reliable source. on the sunday talk shows, republicans responded. >> this is a reckless and slanderous charge by harry reid. this is a guy who hadn't released his own returns, and for three years can't get a budget passed in the united states senate. >> as far as harry reid is concerned, listen, i know you might want to go down that road. i'm not going to respond to a dirty liar who hasn't filed a single page of tax returns himself. >> wow! that's kind of -- i mean, "dirty liar." heilemann, it's getting ugly out there. >> i know! talk about slander. >> does this matter? >> the harry reid thing or the tax -- >> yeah, harry reid. are republicans doing what they need to do? you can't call the president, like a "dirty liar." so are they just beating up harry reid? >> i'm with those people who think that it's kind of outrageous what harry reid's done. i mean, it's an unsubstantiated charge that's pulled out of the air. and you know, it's -- i think mitt romney should release his taxes and i also think that harry reid should not hurl baseless accusations without having actual evidence to back them up. >> and by the way, he wasn't doing this like ring-side in vegas at a boxing match. he was doing it from the senate floor. >> the senate floor. there's two ways to look at what harry reid has done. one is, if you want to be cynical and clinical, brilliant politics. because he's now basically run three or four or five days, minimum, people talking about mitt romney's tax returns rather than the unemployment rate. and he did it pegged to the release of the unemployment numbers. the other way the look at it, as john suggested is really a misuse of the office, something harry reid's done before and he doesn't care about the criticism. i think republicans have kind of misplayed this, because they're keeping it alive, just as reid wants them to. he doesn't care about being called those names, couldn't careless, but it keeps this story alive. >> why don't we talk about the unemployment numbers? >> okay. can i just give you harry reid's response? >> i would love it. in fact, i was just wondering. >> his chief of staff did respond, saying, they're a bunch of cowards and they're avoiding the issue. lindsey graham and reince priebus, they're a bunch of hencemen for romney and they're all reading off the same talking points. they can't hold a candle to reid. >> i think we get a bunch of henchmen. has harry reid really not released his records? >> well, they don't -- >> but if i'm knocking somebody for not releasing my tax returns, i better release my tax returns. >> i think it's a different set of rules. harry reid is obeying the senate rules. he has financial disclosure forms, not obligated to release his tax returns. >> well, mitt romney's obeying the ruling. >> but not the precedents. >> he's not obeying the rules that have been placed upon him by the national media. >> no, but as you know, his father -- >> mccain released two years. >> but this is just one of these stories that -- >> what about the fact that he demanded that the voters need to know. >> i don't think this is one of those stories that opponents make up. he released some tax returns. they showed an extraordinary use of every tax loophole, every tax trick in the book, for a guy with a huge amount of income and a tiny amount of tax. >> and what did you do? do you go to your tax accountant and say, let's not be aggressive here. i want to pay 30% taxes. >> this is a private equity kind of tax approach, and in the world of aggressive tax treatment, his is the most aggressive i've ever heard about. >> really? >> yes. >> so that's a guy who knows money and knows how to be aggressive and knows how to turn -- >> no, he knows how to serve himself. >> taxes are a grey area. it's not all black and white, and he's gone as far to the dark side as anybody -- >> the dark side?! are you a staff member for harry reid. >> i'm not going to claim that i know anything. i'm not going to claim i have a secret source. that i thought was ridiculous. but i do not know anyone who has a $100 million i.r.a., do you? >> well, mika does, of course. all right. so he's got a secret source and i've got a secret -- i've got a secret plan -- >> he knows a thing or two about these things. he speaks from a tub of money, okay? slander! okay. all right, the jobs report. both romney and obama campaigns are looking to seize upon friday's monthly jobs report. it was weird, i heard terrible headlines and then i heard incredible spins on this, so ratner, you should -- >> isn't that frustrating, mika? >> right. >> like, we were at the white house at your event with valerie, for women. and the numbers came out and the unemployment number went down. and we saw gene sperling, and it looks like he just got the worst news ever. and i was like, this is great news! and they're both like, we're not quite so sure these numbers are weak. that was about two or three months ago. we had two or three months like when the numbers edged down. and suddenly on friday we get a number, and i say, hey, that's great news, and then the unemployment number goes up. and wall street -- we've got to find a more exact way to do this. this is so frustrating for americans. >> here's what the monthly jobs report saw -- >> and for people like me who aren't good in math. >> same here. 163,000 jobs added in july, twice as many as last month, and more than 100,000 -- >> that's good news, right? >> however, still science of weakness as the unemployment rate remains stubbornly high. take a listen to this. >> we've had 42 straight months with unemployment over 8%. and this was the president who said that if we passed his stimulus bill, we'd never go above 8%. and that's 23 million americans out of work, or underemployed. and those are real people. i'm very concerned about how we can get americans back in good-paying jobs with a bright and prosperous future. and let me the tell you, i know how to do it. >> we haven't had to come back from an economic crisis this deep or this painful since the 1930s. but we also knew that if we were persistent, if we kept at it, and kept working, that we'd gradually get to where we need to be. here's the thing. we are not going to get there. we're not going to get to where we need to be, if we go back to the policies that helped to create this mess in the first place. >> all right. steve rattner, what's the real deal in terms of the numbers? >> first of all, the unemployment rate increase was actually truly a rounding. it went from 8.217% to 8.2154%. and that gets rounded up to 8.3. so it didn't really change. the fact is, there were 163,000 new jobs created. that happens to be exactly the average for the first six months of the year. it effectively absorbed people coming back into the labor force. it's good news. the market was up strongly on friday on it. it's not great news. the unemployment rate is still above 8%. >> well, what can you read from those numbers, though? read the tea leaves. what can you tell us about what this means, moving forward? >> what this means is that basically, we are still in a slowly growing economy with modest employment growth that will keep the unemployment rate from going up and probably won't bring it down by a whole lot. >> are you one of these guys who believes that we're in the japanese equivalent of a lost decade? are we going to have stubbornly high unemployment for, say, four, five, six, seven years? >> i don't personally belief that, but that's an argument. i believe we're in this process of deleveraging, where we have too much household debt at the government level, where everybody's retrenching. we have problems in europe that's dragging us down as well. and we have the uncertainty in washington that's terrible for businesses. there's a story on "the new york times" front page talking about people not hiring because of all the trouble in washington. if we can sort out our problems in washington and provide some certainty to the business community, i think we can expect some reasonable growth. >> you have charts. job growth versus the election outcome. >> there's five charts and we're going to take a look at five variables and how they can be used to the predict elections based on past history. you're going to have to bear with me here, because it's a little bit complicated. >> but it's good for you. so go for it. >> my teeth hurt. >> no, this is the important, joe. >> up on this left side here, you've got the predicted share of the popular vote going to the president. with me so far? to the incumbent party. >> you've got about five seconds. >> the black line across the middle is the 50% line. all those little blue dots represent an election. every election since 1964 is plotted here. >> okay. >> and the red line is basically the predictive line using all these blue dots for what the outcome is likely to be. this dotted green dot here, a line down the middle, is where we are today in the economy. so job growth under obama has been 0.3% for the last four months. so you draw a line down there. you get to where it crosses the red line, and that's his predicted share of the popular vote, just above 50%. >> okay. >> okay, by this measure. if you want to look at a couple of the dots, this is jimmy carter -- >> so by job growth, he's doing okay. >> my job growth, he's doing okay. want to go to the next one? >> yeah. >> so unemployment rate, which everybody thinks is a big predictor of election outcomes. if you look at the statistics, no effect. >> mark tells me it's the biggest, but go ahead. >> it explains none of the outcomes. the blue dots are scattered all over the place. you've got ronald reagan up here with a famous 7.2% winning. you've got ford and carter and bush in '92 down there losing with almost the same unemployment rate. you've got the democrats in 1952 losing with 3% unemployment rate and we can go on. >> and a lot of that has to do with trend lines. reagan from 10% to 11%. >> that's exactly the point. the first chart was on trends and it was a good predictor, the second chart really didn't predict very much. >> okay. >> let's go to gdp growth -- >> and by the way, that's difficult for the president, because the unemployment rate exploded the the first year or two under the president and then it came down. >> that's difficult for the president? >> no, i'm saying it's harder to predict about the trend lines for the president, because when he came in, you know, we hadn't bottomed out yet. >> that's true. and of course with reagan, it went up and came back down. the problem with the president right now, it's not coming down. it's kind of flatlining. if you look at the unemployment rate per se, it's kind of flatlining. let's go to gdp growth. gdp growth under obama has been 1.5% in the second quarter. and so that puts him just a little bit, again, above the 50% mark. a slight edge to obama. this is jimmy carter over here on the lower left. this, actually, up here is richard nixon in 1972, if you care. >> that would be 49 states. >> this is reagan in '84. >> 49 states. >> johnson up here in '64. eisenhower in '56. >> where's clinton? >> clinton in '92? >> '96. >> clinton in '96 is right there. >> so gdp growth is a pretty darned accurate predictor. >> gdp growth is -- >> four of those are the most massive landslides in american history. >> gdp growth actually explains about 60% of the results and the rest is explained by other things. >> you sure are good with numbers, rattner. >> i have prove sheets. >> do you have something else for us? >> i have two more charts. >> good lord! is this statistics class? it's monday morning! >> it's good for you. you need to immerse. >> are you guys enjoying this? >> it's good. >> you like it? okay. good, let's keep going. >> love it! >> you won't see this on any other channel. >> no, you will not. they're not doing this on "fox & friends" right now, i guarantee you. >> one more chart. >> and they're proud of it. >> i need one more chart. which one are we going to do. income growth or presidential approval. >> why don't we do income growth. >> i want to see presidential approval. we have to do that next. >> here's income growth. >> he's got 20 the more. >> income growth is interesting. this one predicts 83% of the outcome, it's predicted correctly 10 of the last 13 winners. and this is obama's weakest chart because income growth has been so weak, only up about 4.4%. so he's all the way over here on income growth. >> okay. >> and again up here you have johnson in '64 and reagan in '84. you have nixon in '72 and so on. >> yeah. >> can i say one thing about -- >> i would love that. >> the theory of the case on the romney campaign is it's not about the macroeconomics that are getting reported, but how it affects people in their real lives. and that affects everyone. that one may be, not just a great historical predictor, but the one most applicable to the conditions we are in right now. >> okay. coming up, planning on retiring soon? congratulations, baby boomers. you are now the first generation to have paid more in social security taxes than you will get in benefits. that's a great wake-up. the associated press crunched the numbers. their sobering analysis is next. also, gangster squad. we'll look at the book inspiring a new hollywood film about undercover cops, the mob, and the bottle for los angeles after world war ii. but first, bill karins with a check on the forecast. bill? >> good morning to you, mika. good to see you back. over the weekend, we had a lot of nasty thunderstorms and the heat continued. what has changed is that the heat is sliding a little further to the west. our friends in the pacific northwest had their hottest weekend yet. all of the hot air is bottled up here. a cold front went through this weekend, the great lakes, notice, it was only 76 degrees yesterday in minneapolis. that beautiful air mass is over the great lakes right now. the drought continues so far this august. we've had some rain out there, but not a lot. indianapolis and st. louis got a little rain, but we've had zero in the bucket so far. much of oklahoma and texas, and it doesn't look like any rain is heading there today. we continue to see the worst of the drought conditions in arkansas, kansas, missouri, oklahoma, and now we're starting to get really dry in northern portions of texas. we've been having these daily brushfires in those areas too, because it's so dry. forecast for the northeast, the humidity is up this morning, drier air will move in during the day. a beautiful, perfect day from chicago to detroit to indianapolis. the southeast is probably your travel trouble spot. that's where thunderstorms will be plentiful this afternoon, from atlanta all the way down to jacksonville, orlando, tampa, and right through much of alabama and mississippi. you're watching "morning joe." olympics, oh, big crowd as we go throughout the middle of the day there in london. looks like a pretty nice day. starts at 9:00 here on msnbc. you're watching "morning joe," brewed by starbucks. 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[ meow ] it's quality you can hear and feel. that's the power of german engineering. right now during the autobahn for all event get great deals on a 2012 jetta. get great deals last season was the gulf's best tourism season in years. in florida we had more suntans... in alabama we had more beautiful blooms... in mississippi we had more good times... in louisiana we had more fun on the water. last season we broke all kinds of records on the gulf. this year we are out to do even better... and now is a great time to start. our beatches are even more relaxing... the fishing's great. so pick your favorite spot on the gulf... and come on down. brought to you by bp and all of us who call the gulf home. medicare and social security are also very easy to demagogue. and i expect the president to continue doing that throughout the campaign. but americans are on to that game. and i'm not going to insult the voters by pretending that we can just keep putting off entitlement reform. >> the president and i believe that every american, after a lifetime of hard work, should be able to look forward to the security and dignity that social security and medicare provide. and, you know, folks -- [ applause ] folks, it's about dignity. it's not just about health. it's about dignity. it's about our dignity. >> 24 past the hour. right now. about 56 million people collect social security benefits. and according to the associated press, that number will balloon to 91 million by 2035. this morning, the associated press's steven ollimacher writes in part, "people retiring today are part of the first generation of workers who have paid more in social security taxes during their careers than they will receive in benefits after they retire. it's an historic shift that will only get worse for future retirees, according to an analysis by the associated press. previous generations got a much better bargain, mainly because payroll taxes were very low when social security was enacted in the 1930s and remained so for decades. as recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in social security taxes. though they didn't do quite as well as their parents and grandparents. not anymore." and steven joins us now from washington. >> and a grim forecast, stephen. social security funds are running dry and even 75% of the benefits, over the next 10, 20 years, social security recipients only get 75% of the benefits. >> well, you know, what's happened is, you know, since they did the last reforms on social security back in the 1980s, social security has built up trust funds with surplus payroll taxes. and yes, the trustees who oversee social security project that those trust funds will be exhausted in 2033. and at that point, the program will only collect enough taxes each year to pay about 75% of the benefits. >> 75% of the benefits. is this just -- this just has to do with basic demographics, right? that we have more retirees and fewer workers? >> that is correct. in fact, that's why we're seeing this shift that's happening right now. america's getting older, and we're having fewer children, which means fewer workers to pay into the system for each retiree. for example, back in 1960, there are almost five workers paying into social security for each person getting benefits. today, that's fewer than three. and in 25 years, it's expected to be fewer than two. so what's happened over time, to compensate for that is payroll taxes have been gradually increased, so that we'd have enough money to pay beneficiaries. so if you're retiring -- >> so fewer -- so less than two people working for every one person on social security over the next 20 years? >> that's correct. >> i mean, that's unbelievable. you know, when fdr started this the program, life expectancy was 62. you get social security when you turn 65. >> mm-hmm. >> it's a ponzi scheme even a republican could like. >> but the numbers just don't add up now. i mean, again, less than two workers for every one social security recipient. i mean, mark halperin, we sound like italy. >> well, it's dire in those terms. but if you make changes in the program now, it's relatively -- >> but we're not going to do it. you heard joe biden. we love joe, so i don't say joe's been demagoguing social security, but if another person had done it, they'd say, they're demagoguing social security. >> paul ryan left it out of his budget, republicans don't want to take this fight on and the president isn't really going to take it on. i still think if you do a grand bargain, you have to address this. and the social security changes are about the easiest ones to make. >> and you agree with that? >> not only do i think that it's true that in a grand bargain, you have to take it on, but a grand bargain is the only place you can take it on. the political risks in dealing with medicare and social security. medicare is a much bigger problem, social security is a small problem. you can get that fixed pretty easily. but they have real political risk for any party, so everyone's going to have to jump off the cliff together. that's the only way either one of those are going to get fixed. >> which is exactly what happened, stephen, when ronald reagan and tip o'neill and dan roskincowski joined hands and did this '63. but i still remember the pictures of them putting his car back and forth. thought they were going to tip it. >> you're absolutely correct. back in the '80s when they raised taxes, they raised the payroll tax. they also raised the retirement age gradually. and so when that has meant for people retiring today, they have paid payroll taxes over the course of their career at a higher rate than their parents and grandparents did, yet they're retiring into a very similar program. a program that has just a little bit fewer benefits because of the raising of the retirement age that they did back in the '80s. >> look at that. and of course, the taxes keep going up, and the pay back is less. so, it's so interesting, mark. i remember back in 2009, february 2009, president obama said, we can't kick this can down the road. social security's a huge problem. it was in february of 2009. >> everybody says it. >> i remember it, because this is -- i've been sort of obsessed about this and medicare for some time. and yet he kicked the can down the road for three years. we had the debate back and forth. when's he going to do it? when's he going to do it? this president has shown absolutely no appetite for tackling social security. >> there are a lot of conditions that need to be in place to do this. and one of them is a really strong president with trust and respect with people from the other party. you need that on tax reform, you need that on social security reform, you need that on dealing with obama care. i think one of the big questions for this president is, can he convince the country that he can be, in january of next year, a strong president with good relations with people in the other party. >> and john, that's the big question. how do things change in january of 2013, whether mitt romney's elected or whether barack obama's re-elected. it's not like democrats are going to say, oh, hey, now let's go along with mitt romney to cut benefits in the long run for social security. they won't do it. so where do we go? >> let's remember, the only thing that's -- there's both an optimistic and pessimistic thing to say about congress. the pessimistic thing is that they only act when they have a gun to their head. and the optimistic thing is they almost always do act when they have a gun to their head. so this is a problem that needs to get solved both in terms of, ultimately, the international credit markets. we've been lucky and blessed so far that interest rates have not skyrocketed. that will not go on forever if we don't deal with the long-term structural problems with entitlements. and from the progressive side, there is a very powerful progressive case for reforming entitlements, both medicare and social security, because they're going to crowd out all their spending. if you're a liberal or progressive and you want to spend, you need that money to get free. i think that in the end, under threat, it's the only time it's going to happen, but we're getting to the point that it becomes necessary that this happens so congress will have to act. >> fascinating you say that. mika, i've always been intrigued by the fact that m tdemocrats h been the champions of these middle class entitlements with, to the detriment now of working class benefits and entitlements for the truly disadvantaged. because medicare and social security crowds out early education spending, crowds out medicaid, crowds out some of these other programs. and it only gets worse. >> it only gets worse. and mitt romney's selling himself as a guy who's a dealmaker. i think this president has very little time to do that as well. to try and get something done. the ap's stephen ohlemacher, thank you very much. >> the first part of the associated press's four-part series on social security. it's online. up next, "gangster squad." a new book tells the true story of the battle for los angeles during the 1940s and '50s, when a group of l.a. cops faced down some of the city's most ruthless mobsters. we'll talk to the author whose book inspired the new hollywood blockbuster, next on "morning joe." humans -- even when we cross our t's and dot our i's, we still run into problems. namely, other humans. which is why, at liberty mutual insurance, auto policies come with new car replacement and accident forgiveness if you qualify. see what else comes standard at libertymutual.com. liberty mutual insurance. responsibility. what's your policy? you have a plan? first we're gonna check our bags for free, thanks to our explorer card. then, the united club. my mother was so wrong about you. next, we get priority boarding on our flight i booked with miles. all because of the card. and me. okay, what's the plan? plan? mm-hmm. we're on vacation. this is no plan. really? [ male announcer ] the united mileageplus explorer card. the mileage card with special perks on united. get it and you're in. 36 past the hour. here with us now, former editor and writer of the "los angeles times," paul lieberman. he's the author of "gangster squad: covert cops, the mob, and the battle for los angeles." and in the opening pages of the book, lapd lieutenant willie burns lays out the mission of the gangster quad to 18 select police officers. saying, "they would have cash at their disposal, a secret service fund to pay informants who might help them gather intelligence on the likes of bugsy siegel, jack dragna, and mickey cohen. but they would have no office, they'd meet on street corners, in parking lots, and up in the hills. in effect, they would not exist." good to have you on board this morning. >> thank you very much. >> sounds like a real-life version of "l.a. confidential." >> it is. that was set a little bit earlier, but this is a true story from the underworld of los angeles. >> right. which l.a., post-war, was such a fascinating place, because it was -- it hadn't exploded yet. so you had all of these guys trying to seize turf. and big body counts started piling up. >> well, what happened, during the war, the city grew tremendously. you had the defense plants there. the city provided a huge chunk of our war effort. and so all of a sudden, los angeles was the third largest city. hollywood was selling war bonds. there was this great optimism and city leaders said, we're a modern, great city. and all of a sudden the bodies start showing up on the streets. and the headlines said, "gangsters in gambling war." and as the city official said, something has to be done. >> john, you're a native of l.a. i mean, the history's just -- it's so rich. especially, again, '30s, '40s, '50s, as it started to grow. >> i have one word for that -- chinatown. >> i was going to say, chinatown! >> you think about that, and california is a state, it's a country unto itself. and the battle over water rights, the battles over the development of that state. it's as interesting as the history of any foreign country. >> well, what happened was, all -- nobody was from los angeles. >> right. >> los angeles was paranoid about evil outsiders. the mobsters were evil outsiders. and yet none of them, none of the cops were from los angeles. they all came from the midwest, a few from the pacific northwest. they emigrated in. they were children of the depression. they fought in the war. they were classic greatest generation sort. and these lowly cops got back from the war, police chief calls them in and said, i have a job for you. but, in effect, you will not exist. i mean, they operated out of two rusted old cars. the feet would go through the floorboard. and they'd meet up in the hills. they got their paychecks at their old station houses. so it looked like they were doing their old jobs. they were not. >> but what a fascinating start to this book and to your story. 1992, you're doing your job at the "l.a. times". >> right. >> and you get a phone call from an old guy. >> well, i got a call from a little quivering voice, high-pitched, clearly an older man. and he complained about something that was in the newspaper. and there had been a little controversy about political intelligence that was in the police department files. they had some dirt on celebrities, on politicians. and the story had said that this went back to the intelligence division, under a very famous police chief, william parker. well, the caller says, you know, you got it wrong. this went back further to world war ii and the gangster squad. and i said, okay, how do you know? and he paused and said, well, i was on it. and the next day, i was in the living room of former sergeant john j. o'mara, his wife, connie, would lurk in the kitchen, cooking chili. and she would be listening in and say, you know, oh, dear, you don't want to go into that, do you? and he'd say, don't worry, boss, because she felt that he was talking about things that might still get him thrown in prison. because he used to take the gangsters up in the hills and convince them that los angeles was not a welcoming place for them. and i said, well, how would you do it? >> i was going to say, how did he convince them that perhaps they should move? >> he said, well, maybe you put a gun in their ear. and i said, well, what would you say? and he started, he started, well, maybe you would say, do you feel a sneeze coming on? a real loud sneeze? so that's what they did. it was a little rough time. and what was interesting was, in later life, i mean, you heard about these stories, and the guys became incredibly successful. i mean, they really did a job, there was no glory in this job. which is a line that's also in the movie. there's no glory in it, because you did the dirty work, the bosses got the credit, the head of their unit later became the head of security for the and the police chief became a famous character. and the grunts, they want you to do this job, you're supposed to stay invisible, and then you're supposed to go on with it and stay invisible. >> but they did an incredible job. >> they did. one of the things i love, i mean, talk about l.a. at that time, the servicemen were coming back from war. and they would pour into the boats in ports, ready to go home. so they'd spend one night in los angeles before taking trains and buses to the heartland. and many of them went to these movie theaters, and they watched kind of second-run movies for a dime. except they'd also sleep. they had one night and they'd snooze. so pickpockets were victimizing these service men. they'd sit next to them, they'd slit them open or -- they were really very trained. and city officials, can you imagine how enraged they were? returning heroes getting pickpocketed. here's the problem, even if you caught the pickpockets, none of the service men want to stay away to testify. they want to get home. they've been away at war for three years, four years. what do you do? call in the gangster quad. we know this isn't a gangster, how about taking care of these pickpockets. the same john o'mara, would be up in the projection booth, looking around for suspicious civilians. they'd find -- you know, you could tell they took some money and another guy would go up the aisle. what do you do with them? winston alley. they would pull in in the middle of the night to winston alley. there was a squad member named douglas "jumbo" kanard from texas, and he'd been an oil field rough house. 6'4", 200 pounds, he would be waiting in the alley with his six-inch gun and he'd bring these punks up here and he'd start waving the gun, i'm going to take care of them now, just let me at them, they're getting our heroes, and he'd get real riled up and these guys were shaking. and o'mara would finally say to jumbo, listen, quiet down, they're still investigating the body they found last week. we can't do another one. the kid would be shaking, and jumbo says, i'm going to get him! and o'mara would whisper, listen, kid, you better get out of here quick. and the kid would run down the alley, it's dark, i've been there, he would go left, and then there would be the crash, because they had a chain 18 inches long the alley, boom! one after another, the pickpockets went crashing through the alley. so that was the gangster squad. >> the book is the "gangster squad." thank you so much. >> fantastic. >> coming up, cnbc's brian sullivan with this morning's business headlines. "morning joe" will be right back. [ male announcer ] count the number of buttons in your car. now count the number of buttons on your tablet. isn't it time the automobile advanced? introducing cue in the all-new cadillac xts. the simplicity of a tablet has come to your car. ♪ the all-new cadillac xts has arrived. and it's bringing the future forward. and i thought "i can't do this, it's just too hard." then there was a moment. when i decided to find a way to keep going. go for olympic gold and go to college too. [ male announcer ] every day we help students earn their bachelor's or master's degree for tomorrow's careers. this is your moment. let nothing stand in your way. devry university, proud to support the education of our u.s. olympic team. ♪ [music plays] ♪ [music plays] how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. welcome back to "morning joe." it's time for business before the bell with cnbc's ryan sullivan. hey, ryan, talk about night capital and this computer glitch. there are a lot of glitches these days in the markets. >> expensive ones. >> really expensive ones. >> bruce wayne lost his entire fortune because of a computer malfunction. >> yeah, this night story has been one that has been sort of roiling the market for the last week or so. you referenced it, a trading glitch, bad software installed or whatever, basically sent millions of orders in ten minutes that were supposed to be spread out over a matter of weeks or months. knight capital, while the firm is not a household name, but a very important market maker, buying and selling of stocks and etfs, a lot of concerns last week that they could go out of business over this. but last weekend they got a savior, they're going to get financing from a couple of other wall street firms. they're going to issue some new convertible debt, which means you can change it into stock. bad news for current investors, this is going to dilute them still. looks like knight capital, guys, will go on. >> let's talk about best buy, a company that was roaring ten years ago, has had some problems. they're in the news again. >> they are in the news, news that just broke moments ago. best buy stock's been tumbling. a lot of concerns about what they call showrooming. people go in, then go to amazon.com. the guy who started the company, left the company a few years ago, but still owns billions of dollars worth of stock, has made an offer to buy best buy between $24 and $26 per share. he says he still believes in the company, doesn't like the direction that it's going in. he'll need about $7 billion in debt financing. in other words, private equity. i know private equity has been in the news a little bit. >> little bit. >> yeah, just kind of whatever. so this is sort of a very consumer-type-focused story for your viewers who maybe aren't that familiar with private equity can watch and see what happens. and by the way, in that last interview, you know, i liked that interview, i liked the book, except he called that thug jumbo, but jumbo was actually smaller than me. >> really? >> he was on the 6'4", 200. tiny. >> a tiny guy. >> oh, god. >> he's such a massive mountain of a man. >> all right, thank you so much. >> mountain of something. >> yeah. >> greatly appreciate it. but best buy, man, swimming against the tide. >> yeah. >> you hate to say that. it's like the great bookstores. he's not even paying attention to us. he's doing -- >> i'm communicating about important matters. >> we'll be right back. >> we shall return. down here, folks measure commitment by what's getting done. the twenty billion dollars bp committed has helped fund economic and environmental recovery. long-term, bp's made a five hundred million dollar commitment to support scientists studying the environment. and the gulf is open for business - the beaches are beautiful, the seafood is delicious. last year, many areas even reported record tourism seasons. the progress continues... but that doesn't mean our job is done. we're still committed to seeing this through. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. ooo no. the hotel lost our reservation. nonsense! you book at travelocity, your reservation's guaranteed. well, i did not book with travelocity, okay?!? 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