January 23rd, 2012
02:20 PM ET

GPS Panel: Republicans putting capitalism on trial?

A GPS all-star panel discussion on the GOP, the economy, Iran, and more with Arianna Huffington, Mort Zuckerman, David Frum, and Steve Rattner.

Arianna Huffington is the editor-in-chief and president of the Huffington Post Media Group.  David Frum is a contributing editor for the Daily Beast and Newsweek. Steve Rattner left a long career on Wall Street to be the Obama administration's car czar.  Now he's back in business.  And Mort Zuckerman never left the businessworld, for he is the chairman of Boston Property and the editor-in-chief of U.S. News and World Report.

Here's a transcript of our discussion:

FAREED ZAKARIA: One of the things I've been puzzling over is what happened to the Tea Party?  This was the party that, you know, this was meant to be the thing that was going to totally transform the Republican Party, and it doesn't quite seem to have had that effect.


DAVID FRUM, THE DAILY BEAST/ NEWSWEEK: Well, it's failed to generate an alternative to Mitt Romney, and it's taking a bad humiliation because I think a lot of the energy has gone out of it, and especially in South Carolina.  Here's something that I think is - may be relevant.

Senator Jim DeMint, a senator from South Carolina, has been a vocal advocate of the Tea Party.  He has also been the leading opponent of dredging the harbor of Charleston.  Charleston needs the deeper harbor if it is to compete with Savannah, which is being dredged, where dredging is beginning right now. And there are people in South Carolina who are saying, wait a minute, this is beginning to interfere with somebody's livelihood, that it's one thing to say we refuse all federal dollars for everybody else.  But when you're refusing federal dollars here in South Carolina, that's a very different story.

ZAKARIA:  But it's interesting that you have, within the Republican Party, it's almost as though each of these candidates represents one element of the Republican Party.  Santorum, the more religious, you know, socially conservative; Romney, the traditional business man.  Is there a sense that, even in the Republican Party, capitalism is on trial, that people are not convinced that being in private equity is such a great thing after all?

MORT ZUCKERMAN: Well, I don't know about that.  I must say I think that there is a sense that somehow or other this economy went south in a big way, and somehow or other the business world, particularly the financial world, had a larger role in that then than previous times, certainly since the end of World War II, and there's some real validity to that.

But I don't think that it's that general.  I mean, to my mind, what's going to happen no matter where these people go, ultimately they're going to choose between a Republican and a Democrat.  The Democrat happens to be Obama.  And one thing that will unite the Republican Party is their hostility to Obama.

So however the primaries play out, that will be the major residue for the general election.

ZAKARIA:  What about the economy?  I mean, one theory is that the Tea Party is beginning to wane in influence because it was part of what was fueling it was just this despair and that economic numbers are getting better.

STEVEN RATTNER:  Well, there's no question, although I think Mort might disagree with me a little bit, the economic numbers are getting better.  We just had, late last week, new claims for unemployment insurance down to 352,000, which is the lowest number, I think, since 19 - since 2008.  And every indicator is pointing to a continuation of this modest economic recovery.

But, remember, people's incomes haven't really gone up during this.  So there's still a lot of unhappiness.  The unemployment rate is still 8.5 percent, plus or minus at the moment.  So there's plenty to worry about in the economy.  I think the Tea Party just simply lost its mojo, so to speak.  I think it lost its sense of purpose and real direction.

ARIANNA HUFFINGTON: Do you know, the people on the ground do not feel that the economy is getting better.  I was speaking at the Mayor's Conference in D.C. on Thursday, and you have mayors, you know, who are Republicans and Democrats and they all feel that they're struggling, that their constituents are struggling, that services are being cut. And you know, all these 600,000 public sector jobs that have been cut under Obama have impacted communities in a disproportionate way.

So when we talk about things improving and the fact that the unemployment claims are down, part of the reason employment claims  are down is because about 200,000 people are too discouraged  now, most recently to look for work.

RATTNER:  That's not quite right.  New claims for unemployment insurance is for people who get laid off, who are then trying to get unemployment, so it's not a discourages - I don't disagree with any of you guys, in the sense that these cutbacks have been painful. People generally don't feel great about the economy.  They shouldn't. And I think if you do look at the polls, what's also - what struck me the other day in a poll is that Democrats, actually, by a pretty wide margin, think the economy is getting better.  Republicans by an equally wide margin think it's not getting better, and I think that will all play into the politics of November.

ZAKARIA:  Mort, just on the economy, housing is at the heart of it.  Do you think residential housing is bottoming out and beginning to rise?

MORT ZUCKERMAN, EDITOR-IN-CHIEF, US NEWS AND WORLD REPORT:  No, I don't think so.  Prices are still going down.  If you measure it by the Case-Schiller index or any of the other serious indices.

And what is more, given the unemployment numbers - and I'm going to disagree with the unemployment numbers here because what happens is the 8.5 percent really measures people who've actually sought a job in the last four weeks. But since the average period of unemployment is about 6 and a half months, that just doesn't apply when the average period - that's a record, by the way.  So if you measure it by people who have applied for a job in the last six months and people who are working part-time involuntarily, that is a couple days a week when they were working full-time, that number - this is the government numbers - 15.1 percent. And then if you add to that the people who've left the labor force, you have to add another 2.9 percent of that.  You're talking 18 percent.  We've never seen anything like that, certainly not in my lifetime.

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Topics: 2012 Election • Economy • Elections • Iran

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soundoff (5 Responses)
  1. Lewis Finley

    As a South Carolinian who has watched the debate over earmarks (pros and cons), I take exception to the statements made yesterday by David Frum regarding the position taken by our Senator, Jim Demint. David made the statement that Sen. Demint is opposed to the deepening of the Charleston harbor. That is a bald face lie, which was never corrected by any one of the supposed learned members of the press corp that chum around but do not know the fact or do not care to challenge one of their co-conspirators. Sen. Demint feels that the Federal Government has run amok with earmarks and that the best way to fund projects is through the budgeting process. The Army Corp of Engineers has sufficient funding and the port of Charleston should be deepened (dredged) to handle the new class of super cargo carriers that will soon be coming throught the Panama Canal. The ACE is the responsible party to prioritize all port improvement requirements. Earmarks had been the norm and Sen. Demint took a principaled approach to change the system. David Frum and the panel attempted to paint and taint the "tea party" and our Senator as negative anti-progressives and this is why the media is looked up with such disdain. We in SC understand the need to have Charleston's harbor deepened, but the item should be a budgeted item. It is time that President Obama and the Democrat controlled Senate actually pass a budget. Obama's last budget went down to defeat 99-0 by everyone!!

    January 23, 2012 at 3:45 pm | Reply
  2. ______________

    Okay, libtards. Listen up. Capitalism WORKS. Sure, it's not perfect.

    Socialism creates malaise. And if you don't believe that, look at Western Europe RIGHT NOW.

    I'd rather be in the good old capitalistic United States of America.

    Shove your free healthcare up your ass.

    January 23, 2012 at 9:04 pm | Reply
  3. j. von hettlingen

    Steve Rattner seemed to know what he was talking about. The interpretation of the economic data and polls is often politically tainted.
    Zuckerman should mention that in Europe companies tend to cut the amout of work hours of their employees instead of making them redundant. Some employees are ready to work longer for the same pay.

    January 24, 2012 at 5:39 am | Reply
  4. Analist

    S Rattner continues to say the obvious and put himself in the company of otherwise law abiding and sincere journalists. What a fluffy intro, and shame on you Zakaria. To what depths will you go to be "relevant". It just proves that Rattner's tactics are working-keep denying your guilt and soon the public will forget. Have you no respect for the thousands who disdain Rattner's illegal pandering for pension funds.? He did not "leave" finance–he was expelled from practice due to illegal pay to play. How dare you misrepresent his credentials and history, thus rendering the rest of your article suspect. Rattner did not leave to be the czar, he was kicked out of the position because he was under investigation. He should be in jail. Thus your little round table is null and void.

    January 24, 2012 at 8:16 pm | Reply

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