'This Week' Transcript: Goolsbee, Brown & Corker

TUCKER: No, and the Democrats don't either, for good reason. We saw this tactic used with health care reform, when Max Baucus was given months to negotiate with Republicans. At the end of the day there wasn't a single Senate Republican voting for health care reform. So, you know, Mitch McConnell came out just a few weeks ago and said, let's start over with this financial reform bill. That was the very same tactic used with health care reform. So Democrats need to be leery of this idea of negotiate, negotiate, negotiate. It gives the lobbyists time to lobby more, give more campaign contributions, and it gives the Republicans time to foment opposition by mischaracterizing the bill. So I think Chris Dodd is very leery.


TAPPER: Can I interject for one second on the campaign contributions, and I'll come to you in a second, Paul. But the Center for Responsive Politics did a study of campaign contributions, and in this cycle, the finance, insurance and real estate sectors are giving much more to Democrats than to Republicans. $65 million to $51 million. Paul, do you think the Democratic Party is too close to Wall Street?

KRUGMAN: Well, it has been in the past for sure. No question that in the late '90s, the Clinton team -- some of whom are now in the administration -- were way too close to Wall Street. They believed that these were wise men who knew what they were doing. And no, at this point, it's the party in power, of course, is going to be getting a lot more contributions. It's kind of -- that's not too surprising.

Let me say a couple of things here. Anyone who says we need to be bipartisan should bear in mind that for the last several weeks, Mitch McConnell, the Senate minority leader, has been trying to stop reform with possibly the most dishonest argument ever made in the history of politics, which is the claim that having regulation of the banks is actually bailing out the banks. And basically, the argument boils down to saying that what we really need to do to deal with fires is abolish the fire department. Because then people will know that they can't let their buildings burn in the first place, right? It's incredible.

So anyone who says bipartisan, should say, you know, bipartisan doesn't include the Senate minority leader. But, you know, I agree with George, actually, believe it or not. Too big to fail per se is not the problem. The Great Depression was made possible by the failure of the Bank of the United States, which despite its name, was a Bronx-based institution that was the 28th largest financial institution in the United States at the time, and yet brought the whole system down.

But what we are getting now in this bill is a way to have graceful failure of big institutions, right? We know how to deal with small banks. The FDIC seized seven banks last week that were on the verge of failing and let them, you know, liquidated them gracefully, but we don't have a way of dealing with complex, you know, what we call shadow banking institutions like Lehman or Citigroup. And this bill would give you that. So it would give you the ability to do for big, complicated financial institutions what we've been doing routinely for small ones, and that does -- so it doesn't end the too big, but it may deal with the fail bit.

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