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paul volcker is then i devising obama now he's around why not simply remember the solution back then and use it again well obviously there are some different forces at play right now our financial system is in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying desperately to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experiencing today represents the ultimate failure of central planning as it's applied to our monetary system and people

and it worked you could say and a lot and a lot of different ways why not sampling since paul volcker is then i advise and obama now is around why not simply remember the solution back then and use it again well obviously there are some different forces at play right now our financial system is caught in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying to. to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further is it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate that volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so not that we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experiencing tod

and it works you could say in a lot and a lot of different ways why not sam playing since paul volcker is then i advise and obama now is around why not simply remember the solution back then and use it again well obviously there are some different forces at play right now our financial system is caught up in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying desperately to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further is it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate that volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so not that's we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're exp

and it works you could say in a lot and a lot of different ways why not sampling since paul volcker is then i advise and obama now is around why not simply remember the solution back then and use it again well obviously there are some different forces at play right now our financial system is caught in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying desperately to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further is it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so not that we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experiencing

and it works you could say in a lot and a lot of different ways why not sampling since paul volcker isn't advise and obama now is around why not simply remember the solution back then and use of the wealth . obviously there are some different forces at play right now our financial system is caught in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying desperately to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further is it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate that volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so not that we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experienci

and it worked you could say and a lot and a lot of different ways why not simply since paul volcker is then advise ing obama now is around why not simply remember the solution back then and use it again well obviously there are some different forces at play right now our financial system is caught in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying to. to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further is it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate that volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so not that's we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experiencing tod

and it worked you could say in a lot and a lot of different ways why not sampling since paul volcker is then advise and obama now is around why not simply remember the solution back then and use it again well obviously there are some different forces at play right now our financial system is caught in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying desk. to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further is it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate that volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so not that's we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experiencing t

paul volcker, an economic advisor addressed this the other day, he said, this, quote, he's not a wild-eyed leftist radical, it's ridiculous since he has been in office. he has been a thee fedefender t leftist markets. then you hear obama has not cornered them or listened to them. they will appoint someone from wall street, with wall street experience in to larry somer's old job. >> it's really important. if you press business people on this question, it's hard to come up with specific instances of the things that the white house did that's hurting their business outlook outside of the few specific cases like some of the banks and health insurance companies. in the business world, body language and rhetoric matter a lot. you know, george bush did a lot of anti-business thing. he's under his administration that arthur anderson was put in to bankruptcy by the justice department. but people kind of trusted bush because he seemed to be one of them. i think obama realizes they don't trust him the same way and that's why they're hunting around for someone with the ceo mystique to them that can he

volcker, he might as well be 40 years old. in some ways, there's an argument for that. if we change the constitution, it shouldn't apply to me. it shouldn't apply to anybody served. it should all be forward looking. that's what i think it should be. >> politico editor chief john harris spoke with president clinton yesterday. john, an interesting clip. we chose it for you because you heard clinton's mind churning there whether he could do a third term and maybe not for me but maybe for somebody else it might be a good idea. you spent some time with him. how do you sense that president clinton was? >> i found him in very good form, relaxed. very, very busy. he had something like 40 heads of state visiting him in the clinton global initiative. but he's at the start of the conversation. once we started talking about politics, you can feel him unwind. he loves talking about this. he says eache loex each electi like a mozart symphony. he's worried about the democrats. he believes that the party has not done enough to address the con

because of paul volcker we ended up getting sound money, inflation out of the system. because of my political mentor jack kemp and ronald reagan we brought tax rates down which unleashed, until then unprecedented economic growth. spending was too high at that time. so while we-- while we got the re6 news and economics right we had a cold war to fight. we had a big spending problem. what bill clinton got right in my opinion was in 19978 budget agreement which was a budget agreement with the republicans this congress and the president with erskine bowles negotiating this, lower spending, lower capital gains taxes, that budget agreement was the press i business or the precursor to the surplus we ended up getting. >> rose: didn't they install, didn't bill clinton-- make decisions in '93. >> so rubin omics is what we would refer to that as. >> rose: which is being a deficit hawk. >> yes, that's right. being a deficit hawk and sort of splitting revenues and expenditures. here is the problem with the day we are in right now. number one, tax rates matter a lot in this internat

because of paul volcker we ended up getting sound money, inflation out of the system. because of my political mentor jack kemp and ronald reagan we brought tax rates down which unleashed, until then unprecedented economic growth. spending was too high at that time. so while we-- while we got the re6 news and economics right we had a cold war to fight. we had a big spending problem. what bill clinton got right in my opinion was in 19978 budget agreement which was a budget agreement with the republicans this congress and the president with erskine bowles negotiating this, lower spending, lower capital gains taxes, that budget agreement was the press i business or the precursor to the surplus we ended up getting. >> rose: didn't they install, didn't bill clinton-- make decisions in '93. >> so rubin omics is what we would refer to that as. >> rose: which is being a deficit hawk. >> yes, that's right. being a deficit hawk and sort of splitting revenues and expenditures. here is the problem with the day we are in right now. number one, tax rates matter a loin this internatio

it added little or no value to the economy as paul volcker said. it diverted some of our best minds and talents away from real professions, real sciences, engineers, physics, on to wall street, so they could make huge amounts of money. very little of what's been done in the nearly two years of the obama administration has changed that pathology in our economy. >> pretty amazing to watch. i won't marvel about it now, but two years on, the fact that the entire system down to the ratings agencies working for the banks is still in tact. it's impressive to see how much control money has over our politicians. >> it is beyond belief. >> yes. a pleasure to see you. author of "capital offense." thank you for joining us. >>> up next, outreach to e.t. we'll tell you who's being appointed as ambassador to the aliens. tdd# 1-800-345-2550 absolutely. i mean, these financial services companies tdd# 1-800-345-2550 are still talking about retirement tdd# 1-800-345-2550 like it's some kind of dream. tdd# 1-800-345-2550 it's either this magic number i'm supposed to r

here we have a man named paul volcker who headed the federal reserve in 1979 to 87. you join the council on foreign relations in 1970 and made himself available to the insiders who are running what i call it conspiracy. he said at one time during his testimony for appointment, asked to go before the senate for approval and said the standard of living of the average american has declined, i don't thank you can escape that. well, thank you very much mr. volcker. but i don't want my standard of living to decline and obviously you intend to do that. he certainly did. i should mention here that he was reappointed after his first term for another term on the federal reserve by ronald reagan. i know a lot of people have a lot of big high aspirations -- admiration of ronald reagan. i'm afraid i don't sherrif to. for that and for many other reasons. then we go to after volcker to alan greenspan. alan greenspan is a classic example of a man who knew the truth and then sold out in order to move up the line. because in 1967 he wrote the article called capitalism, the on on my de

volcker to raise interest rates dramatically and break the back of inflation. in the second half of his term, when interest rates began to ease, he had something to come back with. that is not the case today with obama. >> you mentioned bill clinton in new hampshire in 1992. i was there the day you're referring to, in dunckin donuts getting a fritter. >> no more of those. >> one woman began to tell him an economic tale of woe. she had lost her job and he went over and hugged her and started talking to her, things are going to get better. it struck me last week, the first questioner to president obama said, you know, i'm exhausted from having to defend you, you could have seen bill clinton leaving the the podium and walking over and hugging her. there's a distance between the president and the public. hates to do with his personality, early in the presidency, two years. >> it's early. >> he's also uncomfortable with the theater of politics in a way bill clinton wasn't, ronald reagan wasn't. you have to actually do things to let people know you care and connect.

look at paul volcker, mid-80s. you know, he might as well be 40 years old in some ways. i think there's an argument for that. and if we change the constitution, it shouldn't apply to me. that is, it shouldn't apply to anybody who served, it should be all forward-looking. but that's kind of what i think it should be. >> i'll let you ask about jimmy carter. >> not going to do that, are you? >> i'm curious, your answer on the economy, it was not short. and it's very, very difficult to sort of wrap your arms around and explain. you did a great job, i understood it, and you analyzed back in terms of how we could've done better. i'd love the short answer, but i'd like to more know if you can understand how this white house might have a very difficult communicating a clear message on this very convoluted issue and what they can do better. >> well, first of all, the republicans have now given us their plan. and they've been pretty straightforward all along. they said if you vote for us, we want to repeal health care, we want to repeal financial oversight, we want to repeal the s

volcker, has suggested that the united states should impose a brand new, the value-added tax on goods and services at every level of production. most countries that have such a tax have it functioned as a hidden tax bill to the final retail price, so consumers have no idea how much tax they are paying. this lack of transparency means that it is politically easy to raise that rate to pay for new spending the initiatives. in opposing it, especially on top of existing income tax, which would represent a huge tax increase on american manufacturers. in addition, much of the cost would be passed along to consumers, with a burden falling most heavily on senior citizens and middle-class families. president obama has repeatedly pledged not to raise taxes on families making less than two and a $50,000 per year. mr. secretary, can you give us any sort of assurance that the administration will not support, or propose a value-added tax? .. . we'd like to give the american economy and people today certainty that those, that will be the law of the lan going forward. if we ask them to live with uncer

volcker, has suggested that the united states should impose a brand new value-added tax on goods and services at every level of production. in most countries that have it, it functions as a hidden tax with the cost built into the final retail price so consumers have no idea how much tax they are paying. this lack of transparency means that it is politically easy for the government to raise the vat rate to pay for new spending initiatives. imposing one, especially on top of existing income-tax, would represent a huge tax increase on american manufacturers. in addition, much of the cost would be passed along to consumers with the burden falling mostly on senior citizens and middle-class families. president obama has repeatedly pledged not to raise taxes on families making less than two hundred $50,000 per year -- less than $250,000 per year. >> no member of the president's economic team has proposed that we established a vat. but me just say something about what we believe is a policy for the country and i will explain where we disagree. you are right to point out that, by far and away

paul vehicle kerr delivering -- volcker delivering asexment and changes in the off the cuff speech in chicago. peter barnes joins us. he criticized a number of the parts of the financial system, huh? >> that's right, jon. he threw out his prepared remarks and went on a tear. he trashed the banks and their ceos. he is worried that all of these new rules from washington will not work. and in an interview with fox business, he told regulators to get some backbone. >> i think this is going to take a lot of attention because there is a lot of pressure, as you know, from the industry, from the lobbyists, let us do what we want to do. >> he also warned that regulators can be pressured by politicians, too jon. >> jon: but we got some good news today, peter, which sent stocks on a rally. >> that's right. first some good economic news out of germany and then from the u.s., and that helped to take the dow up nearly 200 points today about a 2% pop along with all the other indexes. the dow is now on track to close out its best september in 71 years. >> jon: peter are barnes, fox business. thank yo