Rattner: Cyprus backlash shows Europe’s still a mess

>>> good morning. it's monday, march 18th . bus on set here on " morning joe ," msnbc and "time" magazine senior political analyst mark halpern.

>> hi, mika.

>> you like my cryptic tweets?

>> i do.

>> i didn't know they were cryptic. new york magazine and msnbc political analyst , jon heilman is back. former treasury official and " morning joe " economic analyst steve ratner. in washington editorial director of the national journal group , ron fornia.

>> we are halpern, heilman every sunday night late to get ready for the show and we go to the hippest place there and where is that?

>> i don't know. i've never been there.

>> we go to brooklyn.

>> there is a quizino's there.

>> we don't want that to happen, we don't want people like me to go to these places but we do. we go last night, right?

>> yeah.

>> what is wrong with my sweater?

>> i'm sorry. it's just --

>> i'd make him take the sweater off first.

>> a little too connecticut?

>> a little too connecticut.

>> so we go in. last night, we are in there and usually we are watching wrestling or something like that.

>> dutch wrestling.

>> right. right.

>> midget wrestling .

>> bring it in for a landing.

>> jon says to me, wait, wait, wait! doing the whole thing on the bible. we ask the bartender to switch the channel. we are sitting there drinking and doing shots and watching the history channel 's "jesus." we get about three minutes in and look, look. they got barack obama on there, right? except it's not barack obama ! like this history channel thing.

>> what is this?

>> he is also not playing is satan to the left and buzz feed reported last night that satan looks a little bit too much like barack obama .

>> that's the complaint, i hope? that is the complaint.

>> well, that's an incredible story.

>> classic news lead.

>> can i actually do a real story ?

>> i'm watching "way too early" with thomas roberts . i guess hbo did something with george bush 's head on the spike.

>> i think people have too much time on their hands. could we start with the markets? are you kidding me?

>> there is george bush .

>> what is going on here? alex! put that down!

>> they had to apologize for that.

>> do you want people to watch this show? seriously. stupid.

>> that's not juiceesus, it's satan . people were into that in the bar.

>> i'm going to move on.

>> they were the only ones like in high school cheering for the devil.

>> i'm going to try to move on and save you all from yourself. we begin with the markets. big repercussions this morning to a controversial plan by european leaders to partially fund a bailout of cyprus . today, cyprus parliament will hold an emergency vote to review the terms of a rescue package that targets individual savings accounts in exchange for billions of dollars of emergency crash and creditors impose onetime tax of 3% on all bank deposits under $130,000.

>> going deep here.

>> the tax could be closer to 10% on people who have over $640,000 in the bank. that's according to the "the wall street journal " this morning. people stood in long lines over the weekend to withdraw money before the policy went into effect and now russian president vladimir putin is calling the move, quote, unfair, unprofessional and dangerous. russian citizens make up the majority of billions of euros held in cypress bank. this is important.

>> cypress.

>> who cares about cyprus ?

>> come on, cyprus . are you telling me if somebody sneezes in cyprus we get a cold than on the nasdaq ?

>> tell us why.

>> we have a cold on the nasdaq . the nasdaq is going down today. not too many people care about cyprus but a way the europeans have screwed up the bailout by getting the people to pay a part of the cost. you could have a run on the bank and europeans say why do i have my money in this bank? might be a tax on me next. it shows that europe is still a mess, that they have a whole bunch of problems and cyprus may be tiny but affect mavbehavior. it's a case where the europeans are trying to punish a bunch of russians who have money in the cyprus banks and it backfired on them.

>> the markets can all go down because russians are angry what cyprus is doing?

>> it shows that the europeans do not know what they are doing.

>> they really don't know what they are doing.

>> when people realize that, they lose confidence and market go down and people get scared.

>> you see osborn is still in trouble and looked like his own conservatives are telling him to back off on the austerity.

>> i was in london last week.

>> of course, you were.

>> mika goes to south of france so i should be able to go to south of london .

>> what did you hear while in london ?

>> are you making fun of me?

>> oh, no. we are not making fun of you at all.

>> i learned that osborn is in a tough position. the uk is not growing and may go into a quadruple recession and the austerity he is putting in place has caused the economy to be really slow.

>> a lot of tax increases over there in europe. we look at this austerity bit. i want to talk about this for a second.

>> i want to get back to the budget then.

>> talk about what is happening in washington . you know, economics discussed on tv or on the internet or on twitter, it's so depressing, because people really don't know what they are talking about and they just sort of boil it down and there is this belief through the years, that tax cuts are not a tool used. of course, tax cuts are a tool used and tax increases something that traditional are against in bad times . we hear about austerity across great britain and we never hear about the tax increases. when you talk about the fact they cut and slash spending at the same time they hike taxes, it really was a formula made to fail.

>> spending cuts and tax increases both take money out of the economy and slow the economy and, yes, they create this idea of austerity. but, look. it's a balancing problem. on the one hand you need to deal with it budgets and deficits and you need to keep growth going. here is what i saw over the weekend. recession in greece which is a actually a depression if you line it up against the u.s. great depression in 1929 it looks a lot a like in terms of how much unemployment there send a how much the economy was contracted. greece is having our great depression of the late 1920s .

>> wow.

>>> moving on to washington now. president obama 's renewed push for a grand bargain may be showing some early signs of paying off, at least with one top republican. senator bob corker of tennessee says he could envision raising tax revenue if democrats embrace big changes to medicare and social security . he is at odds with other members of his party including house speaker john boehner who is ruling out the prospect of any new taxes.

>> i think, by the way, there is a chance on a deal. i know the president is saying the right things and we have an opportunity over the next four to five months. i think republicans, if they saw true entitlement reform would be glad to look at tax reform that generates additional rveevenues. that means closing loopholes and arranging our tax system so that we have economic growth .

>> i don't know whether we can come to a big agreement. if we do, it will be between the two parties on capitol hill . the president got his tax hikes on january the 1st. the talk about raising revenue is over. it's time to deal with the spending problem.

>> of course, the speaker is going to say that, but speaker has to say, as he is the leader of the republican house. this weekend confirmed what i said last week. a lot of people are saying no deal is in the works. they are moving closer together. the key point out of the john boehner interview was he was asked whether he could trust the president and his answer was, mark? absolutely.

>> yes. i think it's close to true enough.

>> it's close to true that he can absolutely --

>> enough trust, i think, between the parties this can happen. it's about sequencing. we all could describe the deal pretty clearly. it's how you sequence in what the so-called regular order that the speaker and others are looking for and that the white house sort of favors to some extent which is make this a congressional process and then get the senate to agree on something and then, if i may speak in indelicately, jam the house and basically say the house, this is the deal.

>> ron fornia, you have been doing some great reporting on this issue the past couple of months.

>> thank you.

>> where are you right now from everything you've seen up close? the white house , of course, responded strongly to your article suggesting that this was all just sort of a charm offensive. the house now is saying only certain things we can do. behind the scenes are you hearing a little bit more movement?

>> yeah. i'm like mark. i'm getting a little bit optimistic that maybe both sides might have the courage and the foresight to accept up and lead. i don't believe speaker boehner when he says no more tax cuts . i think that is positioning and i think he has to do that right now. i don't believe liberal democrats they will not touch entitlements. they have to realize if they don't attack entitlements in a serious way it squeezes out the next generation. i got to hope at the end of the day that both sides use this next couple of months to care of their bases and step up and get it done.