the fed is looking at reinflating the economy. they're more willing to wrestle the demons of inflammation than deflation. it is not a united fed by any means. there are clear risks out there. if the economy doesn't pick up enough to support the asset prices, you could fall off another cliff down the road. something to worry about. >> susie: mike, you mentioned how well the markets did in august. but what about today? there wasn't much enthusiasm whether you're talking about the stock market or the bond market. >> very interesting reaction to the elections and the quantitative comments. you would comect buy on the rumor and sell. and it certainly wasn't. the market actually priced in these moves in the elections, and most importantly with bernanke did. and to that extent, my guess is diane may be right. as we move forward, if this thing starts to work, we get some employment numbers later this week, and people think maybe employment will be looking a little better because we have uncertainty out of the way with both of these. if th

in the economy. why are we experiencing this now? why has the economy slowed? in the first year, at this recovery benefited from firms replenishing their inventories. during the recession, inventories were drawn down sharply. but unfortunately, this effect has run its course. the benefits of that are now petering out. the u.s. and off that we have seen from inventory -- inventory growth to private demand growth has not been fully established. we have ongoing sluggishness in two key sectors that typically have led to recoveries. consumer spending and housing. the slow recovery of consumer spending and housing reflect the painful unwinding of the dynamics at work that happened during the expansion that preceded the great recession. beginning around 2003, underwriting standards were significantly relaxed. that led to a sharp rise in household borrowing. the rise in home prices helped support more borrowing as household used second mortgages and lines of credit. this also fuelled a response in home const

europe industrialized larger economies over the last thirty years compare them to the economy in the us with the major difference being a larger socialist spending agenda in europe do you realize that the us. g.d.p. on an annual basis has been thirty percent greater for thirty years than that of europe so to segregate policy in the economy is really a very large mistake they go hand in hand in the economy but you still get. grand marnier you calculate product and the way you calculate productivity is that the united states is more productive in europe than we thought because americans walketh longer if you control for the most productive economy in the world is simply the swedes you actually hear about one being said much but it's true as the whole notion of a big social auto europe the running in debt and having terrible or growth most of that was a self-inflicted wound from the seattle monetarist treaties of maastricht after this you then have a situation whereby we're going to take even more growth of the economy i don't deny that is there and it's there that's a problem what i wo

the worry list is long: concerns about the global economy; the fed's plans to boost the u.s. economy and now china's overheating economy. the dow traded higher in just one session this week ending with a net weekly loss of 251 points or more than 2%. the nasdaq was down in three out of five sessions this week for a net loss of 60 points or almost 2.5%. and the s&p 500 also down 2% losing almost 27 points on the week. material and energy stocks led the way down. investors fear weak demand as china considers raising its interest rates. among the decliners in materials: copper producer freeport mac-moran and fertilizer company c.f. industries in the energy sector anadarko representing the selling there. it could have been worse, but intel helped to stem the selling. shares of the dow component rose 2%. the chip giant is boosting its dividend by 15%, that means the quarterly payout climbs to 18 cents a share, up from 16 and that starts in early 2011. also posting gains: dillards-- the big department store. quarterly profits surged 80% on better inventory management. that meant fe

unemployment insurance extensions don't expand the economy at all. they hurt the economy. people don't start looking for a job until benefits run out. >> we were talking about this just the other day. >> normal times economists say there's a percentage of people that don't look for a job. these aren't normal times. there aren't any jobs. we don't have enough jobs. the issue is not whether we should keep extending unemployment benefits. i agree you can't do that for forever. the question is when are the jobs going to so people have a job to go to. that is the question and concern. >> here is my problem with the kind of compromise that was laid out. i think it's essential that we extend these tax cuts, quote, for the rich, because those are the employers in the country. if you take money out of the hands of the employers, they don't have money for hiring people. we know from the statistics most of the people would get hit with the tax increase are people that are employers. let's face it, without employers you don't have jobs. maybe, ali, i like your idea. i'd go for a deal

the economy was not designed to weaken the economy. his comments last 45 minutes. [applause] >> good afternoon, everybody. before i discuss the g-20, i want to comment on the agreement in iraq that has taken place on a framework for a new government. there are still challenges to overcome, but all indications are that government will be representative, inclusive, and reflect the will of the iraqi people who cast their ballots in the last election. this agreement marks a milestone in the history of modern iraq. once again, iraqis are showing their determination to unify iraq and build its future and that those impulses are far stronger than those who want iraq to descend into war and terror. the last several months, the united states has worked closely with our partners to promote a broad-based government, one whose leaders share a commitment to consider all iraqis equal citizens. now the leaders must finish the job of foreign their government so they can meet the challenges that the coalition will face. going forward we will support th

problem and the economy. this emergency, is it over? >> obama: not for the people who are out of work. i think that the way to think about it is, the dangers of a second big recession are now much reduced. the danger of us tipping into a great depression-- i think most economists would say-- is not there on the horizon. what is a danger is that we stay stuck in a new normal where unemployment rates stay high. people who have jobs see their incomes go up, businesses make big profits, but they've learned to do more with less, and so they don't hire. and as a consequence, we keep on seeing growth that is just too slow to bring back the eight million jobs that were lost. that is a danger. so that's something that i've spent a lot of time thinking about. >> kroft: do you get discouraged? are you discouraged now? >> obama: i do get discouraged. i mean, there are times where i thought the economy would've gotten better by now. one of the things i think you understand as president is, you're held responsible for ever

so that's the real challenge we face in the economy. once that gets going, then that momentum begins to build for the confidence, and that obviously leads to housing sector but it leads to other parts of the economy as well. >> you say that jobs are the key. so obviously for companies they're kind of scared to make that big leap and start hiring and investing because they're uncertain about the economy even though the markets are going through the roof at the moment, very volatile. so how do people like you, who've got money, encourage businesses to go forward and to make these investments in people so these people can then start making investments in other parts of the economy? >> part of it is whether you're an individual or a company, we're all being trapped in this cycle of fear, right? individual investors are rushing to the sidelines and putting money -- socking money away. companies are as well. and getting over that fear. right now the average money market accounts yields 1/8 of 1%. at that rate you're on line to double your mon

in the economy. >> it's a tough economy. how is it immigrants can come into this country from mexico and central america and within weeks of being here they have two or three jobs. there are jobs for people who want to work. a lot of people -- >> picking lettuce and citrus and things like that. >> here is the point. people really working hard to make ends meet, working two or three jobs, why should they pay more taxes for people two years who aren't going out to mcdonald's and getting a job. >> two things. first of all, stephen, you contracted yourself. you talked about the rich folks with more money, they aren't working two or three jobs. they are forcing people below them to work two or three jobs. secondly, cnn has showed, based on previous data, where you had immigrants from mexico who actually, some 4 million who went back because of the economy last year. so don't simply assume they are coming here and taking jobs. when you talk about those very people. christine mention 4 million. the 4 million also have children. the

toy the economy. so it's better than hitting the economy for a tax increase right now. but we want to work to reduce the urn certainty out there for investors, entrepreneurs, planners and the economy. >> rose: will there be 14 votes around? >> i don't see 14 votes in anything i've seen come up yet. >> rose: what does that mean? >> that means this is a commission that moves the debate forward. i'm hoping that we'll bring some more ideas to the table in the commission and see if we can get 14 votes for some things but this current plan was not designed to get 14 votes and pass it into law. it was designed to get the conversation going and flowing. alice and i-- democrat and republican-- are going to try to bring a contribution to that debate. hopefully others will be bringing some ideas to the table and we start moving this debate forward. >> rose: when you look at that social security for a moment, do you think it's necessary to reform social security with private accounts? >> no, it's not necessary. i

the republicans have said, we should not take any money out of the economy right now while the economy is still in recession. that makes some sense as well. there has been a political compromise. maybe we should extend the top 2% for two years. it seems to me that every time that congress has a chance to punt on a hard issue, it will punt. delaying this issue for two years will not make a lot of sense. the economists have said that if you give the folks at the top, it may not be your best bang for the buck. i would say, let the top 2% to expire. the next two years, the money that the government would have taken in, let's use that for targeted business tax cuts so that we can get the private sector rehiring again. one thing that has been absent from a lot of the news, a large american companies, since this recession has began, are actually financially better today than they were in 2007. they are sitting on the $2 trillion in cash. we are saying, how can we get that cash offer of the sideline? we try to make the choice between investing here and investing abroad. tavis: what kind of hea

stocks hit a three-week low on fresh criticism of the federal reserve's plan to pump up the economy by buying billions of dollars worth of treasury bonds. >> susie: tom, the latest opposition comes from two dozen leading economists, investment strategists and academics. they took out a full page ad in today's "wall street journal" under the banner "economic policies for the 21st century." they're urging ben bernanke to re-think the fed's $600 billion bond buying plan. >> tom: in an open letter to the fed chairman, they write, "the planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the fed's objective of promoting employment." instead of further action by the fed, the authors want improvements in tax, spending and regulatory policies. >> susie: so is the fed's plan flawed? we get two points of view. signers of that letter to bernanke. also joining us, alan blinder, professor of economics at princeton university and former vice chair of the federal reserve. welcome to the program. >> thank you, good to be here. >> susie: you believe with

i think it reflects the loss of momentum in the economy over the summer. and the fed has been forecasting this all along. they're seeing that the economy is not getting;fn better fast enough to make quick progress in bringing down unemployment. and that's the reason that they feel they needed to give the economy an extra shot in the arm with the most recent easing. >> susie: -- >> susie, i agree with josh. i might just add we have this improvement in the u÷ what the first estimate was for the third quarter. frankly, i don't think anybody really believed the fed's numbers, and they were marking back to what most people were thinking, and most people are a little below the fed in terms of growth next year. >> susie: and bob, we learned how sharply divided the!+e fed is on how to fix the economy. what is this doing to investor anxiety? >> this is not new. it has been going on for months. it is certainly not a great confidence builder. we would like to see them say let's have our disagreements in the meeting, and when we're done, let's all move in the right

to improve the economy. we no longer have 70% marginal tax rates. the ability to change that dynamic of the economy -- it is almost like he has bn -- he has to pray that the economy does better. if it does not, he is lost. >> if this is japan -- there is a whole new set of rules to the game. >> one of your colleagues in the republican polling fraternity told me a couple months ago, you know what? if the economy were in even slightly better shape, we would not be talking about the role of government, government takeover, all that stuff. the tone of the election is set by what matthew just said. do you agree? >> i think the bad economy explains a 30-seat loss in the house, not a 60-plus seat loss in the house. the additional explanatory power comes from the actions taken by the democratic leadership in washington. it was a stimulus that people do not think worked. it was a $1.30 trillion deficit -- and of the bailout. >> the 30-seat loss it happens every midterm. >> certainly not. >> a consistent pattern. >> y

to the banks who are then expected to somehow stimulate the economy the fed shouldn't be doing it the u.s. government should be investing in the creation of jobs to fit the fed help the banks with that but they didn't help main street that there's no jobs there's no direct relationship between the fed printing six hundred billion dollars giving it to banks and jobs being created the federal reserve not accountable congress can't even find out about its internal workings well speaking of that both you and congressman ron paul have been calling on more oversight of the federal reserve even an audit of the fact that this isn't this has been a long drawn out effort by you to i mean is it going anywhere or will it go anywhere why are more people sort of concerned about what happens behind closed doors and one of the most powerful institutions here in america well for almost one hundred years now for ninety eight years the federal reserve has been a law unto itself it's been a black box which directs monetary policy in america for the benefit of a few at the expense of the many. we could ha

people aren't happy about the economy. they aren't happy about the jobless situation, there is little prospect the economy is going to turn around at least in any big way any time soon. and that's always the main issue that people vote on. they ask how are things in their lives. and for tens of millions of people, they are out of work. some of their family is out of work. they are worried about losing their job. no one is seeing pay increases. i think the debt is overwhelming. a lot of people did answer the deficit, i should point out almost no one answered that as your first answer so if you pressed them they would say the deficit. but the reality is very few people, those of us sitting in washington have our nose in books but frankly for the vast majority of the people if the deficit were twice as high or half as high they would still say they are worried about the deficit. it is a really big number. almost no one has a sense of how big that is. so when things are going bad, the idea that the government is running too bi

time horizons of corporations, the way ceo's think -- not in the financial economy but the real economy. i think you can trace back a lot of our problems -- the hollowing out of the middle class -- to the way which wall street in its very short time horizons and the compulsion to speculate led it to a lack of concern about any other aspect of the economy. we got to the point over this three decade or so period where the help of the economy even today -- where is the dow? it is not really true. it the health of the economy has a lot more to do with social equity and other concerns that were simply thrown overboard. host: what we take for granted when you talk about financial -- a gradual change about the way we think about money market and regulation, we just take for granted. guest: that is one of the things i tried to explain is how regulation, and oversight, not only was outpaced by where the markets were going but became kind of a fool's by occupation, and lost art. a very character driven there and tell a story of all of these individuals and one of these is a guy named jerry corrig

seems to address the fact that part of the housing boom was the economy, i mean not the economy, the money devaluating. >> host: let's hear response from our guest. >> guest: there's a great deal to what he says. these are all important factors. there's no one factor. the caller brings up a really important point. which is that during this period when we were sort of deferring to wall street and wall street's view of the economy, short term quarterly type gains over longer term strategic thinking, the phenomenon where by ceos of all of the major companies, fortune 500 companies became caught up in the idea that every time market capital and companies took a leap, they became obsessed with the stocks and options as the compensation packages. we were kind of ignoring who was happening to the job base. who was happening to our middle class. and it's not that free trade is bad. free trade is generally good. where there's nafta or the agreement with china. we weren't noticing that our middle class, industrial class was just being completely hollowed out. sustaining itself with the illusio

that would shrink the economy by 770 billion dollars instead of increasing, raising the economy by 2.1 trillion dollars. look, she might hate billionaires and millionaires and all that, but fact is that 98%, those are people, individuals selling $5,000 worth of stuff on ebay, for crying out loud. toby is right, the great job generators are those, unfortunately, million nars and billionaires that are creating the wealth in this country and as i just pointed out the checks are behind extending the tax cuts, regardless of how you feel about class warfare or not. >> let me point out one other thing, you're throwing around the 700 million dollars. >> that's 7.8 on-- you know that's less than 2%, you cut back the budget less than 2% and you can extend the bush tax credits across the board, go forward and create jobs. >> the other thing we're missing is when you all say it's only 2%, you make it sound like those 2% only hire 2%, but the harvard studies and other economic studies have shown that those really bad 2% account for 28% of all of the hiring. that's a fact. >> we've got to let her ha

economy, then that would be a good thing for the world economy. but what people worry about is that it may not be that effective and it does have a negative effect on some other cries -- countries or they perceive it to. >> woodruff: are they going to do something about this at the meeting? what's going to happen? >> they're going to vent. the reality is that having the u.s. economy grow strongly is a good thing for everybody. but the problem is that in the short term, even in the u.s. it obvious the benefits will be much greater than the risk. but as far as the rest of the world is concerned the benefits are very tenuous. but the risks are very immediate. because the dollar's value is falling, plus you're getting all this money flowing to specialties like the emerging marketss so they're going to try to figure out a way to resolve this. ultimately people want the u.s. economy growing and they understand that the u.s. is doing this basically because it's going to help the u.s. and the rest of the world. but it going to require action by other coun

the economy. i see commodity prices skyrocketing. a feeling that commodities such as cotton and sugar -- you look at commodities such as cotton and sugar, it seems like producers are eating most of the price increase. i think that could be trickling down to the consumer next year. do you see any possibilities to that threat for low inflation? do you think there is a possibility of higher inflation next year? >> er right. the one exception to the general observation that is coming down is that globally traded commodities like energy and food have been going up pretty sharply. the supply and demand is determined on a global level. a emerging-market occurring quite quickly. the demand is pretty strong. that will be a contributor to inflation in the year west it will affect -- inflation for the year in the u.s. it will affect it. there is a lot of slack in the economy and excess supply. it is very difficult for producers to push through those costs to the consumer. most of the costs the producers have

ball the economy. that's again these suicide banker i'm going i'm jealous of enough being in that they're not. well the reality is max as we've been talking about for the previous few minutes is that this guy's leverage is he has a fake judge and a fake sheriff who has held up the population who has convinced the population of ireland that they're the ones that have to hand over their assets to pay off these other guy's debts he has a fake sheriff right there on his side that's right they have no authority and sheriff has no authority whatsoever to impose these austerity measures that alarmed irish people submitting to a fake authority question authority to any question authority for the acute quantitative easing think about q. and a question authority they've got no authority to impose austerity measures on you irish people don't you understand potatoes through my friends one of course the difference between. this national situation for ireland and what happened in erie pennsylvania is midterm electio

the economy is changing shape. we are at the margins gettinging a little more from things like energy,çç from agriculture, a little bit more from manufacturing, from exports than we were a couple of years ago and a little bit less from consumer spending but it's not a dramatic change. in other words, maybe instead of 70% it's only 69 or 68 percent. it would take many years of this type of activity, of consumers kind of holding back and of other sectors rising to the foreto get a substantial change in the shape of our economy. >> brown: daniel gross, thanks for joining us. enjoy the rest of the holiday. >> thank you. >> we turn from on-line >> woodruff: coming up, we turn from online shopping to online security, and the case of a cyber hijacking. plus haiti's upcoming elections; shields and brooks; and the winner of the world food prize. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: new rounds of artillery fire rang out inside north korea today, but none reached t

not surprisingly, the economy was the top issue. what is significant about what voters said on tuesday was that if you add up all the other issues and take them all together, still, almost twice as many voters said the economy and not health care, immigration, or afghanistan combined. just 14% of voters said their family financial situation was better than it had been two years ago. that question is not always ask, it appears to be the most pessimistic reading on its 1984. three in 10 voters said someone in their household had lost a job in the past two years. when asked their opinions about government, 38% said the government should do more to solve the country's problems. 56% said it should do less. in only four of the 26 states for which we have data did a majority want government to do more. those states were connecticut, delaware, hawaii, and new york. speaking of immigration, 2/3 of arizona voters favored the immigration law in that state. they did not want to punish illegal immigrants already here. 55% said that most illegal

>> i would like the stimulus to be used to stimulate the economy. if you are going to use it in a keynesian way, spend it now, one of the problems with just spending for stimulus it never gets done on time or do it whatever, a tax cut. i will say this, i don't think the average guy should be paying for the failures of obama mick -- obamanomics. unemployment is really bad now. 2% gdp tkpwhraoet is nothing. we've real unemployment of 17% in this -- in this country and it hurts working-class. >> nancy pelosi said she believes unemployment benefits stimulated the economy. do you agree? >> i think they do. if you have stimulus money why not use it. it all comes out of the same bucket any way. i don't know why they are making this distinction. unemployment one place and stimulus money somewhere else. go ahead and use it. otherwise don't use it at all. extending it, you might say, going from 26 state of state unemployment 99 weeks that's two years. if people can't get jobs in two years there's something really wrong with the economy. maybe what we should b

the economy. and we could employ people who are worthy of employment. instead of these people who are extorting money. insurance is extortion. it is legal extortion. and now that we have scrooge in the house controlling things and we have a supreme court that has caved in through the interest of the corporations, we need somebody that will support obama's efforts to take care of the people. host: jonathan cowan. guest: i happen to be not have the same point of view that you do about insurance companies. i think a lot of insurance companies take very good care of their -- the people that they insure. there are clearly some abuses as there are in any industry. but if you look at the health care bill, what we did was huge and it ended up -- so for someone like you, cheryl, you got significantly more protections from the health care bill vis-a-vis your insurance company. you have reforms in place, for example, that you can't be denied if you have a pre-existing condition, that you can keep someone who

do for the economy. we need to strengthen the middle class and get the engine of the middle class calling for economic growth. in that context, voters who have been hearing this message that democrats are big spenders when they are not, because we know when the deficits have been rising, or people who think the best thing we can do is to cut the deficit are voting against their interests. somehow that message was getting out and getting a fair amount of play last time. >> you mentioned it messaging. i will give you example about doing a critique of the democrats on messaging. we have the best messenger in the world. his name is barack obama. if he wanted to get down analytically to messaging, one thing that occurs to me, everyone sees a stimulus as pumping money into the economy. our stimulus was very well crafted. one-third of it went into tax cuts. the american people did not hear that part of the message. they don't think yet that that was the case. we are very clever. we did the right way. we saw tha

the economy and the jobs problem? >> i think it's a really paradoxical moment, isn't it. because on the one hand you have a lot of economic analysts, people on wall street saying hurrah with the election results and one of the reasons they're cheering is they say this means there will be gridlock in washington, the politicians aren't going to be able to do anything. >> reporter: explain that, why is gridlock considered a good thing for some people? >> well, the point of view of a lot of business people, and i'm not saying whether i agree with this, but the point of view is as long as washington doesn't mess around with them, that that will create a nice stable environment, it will be possible to make good decisions. but at the same time, and i do think that it is quite likely that we will now have gridlock in washington. you have this really big nonelected actor coming in actually a really big measure, you know, the size of this oneity tateive easing is nearly as big as the tarp was, nearly as big as the first stimulu

people it is against the middle class well speaking of the economy the federal reserve initiating round two of quantitative easing and basically the argument here is that the federal reserve had to do what the federal government could have done and should have done but could you guys couldn't do that because of the gridlock because of the partisanship in washington d.c. would you agree with this assertion first of all we need to explain to people that the federal reserve creates money out of nothing it's a phenomenon called quantitative easing that's the lingo. they create money out of nothing they created they printed six hundred billion dollars and they gave it to the banks who are then expected to somehow stimulate the economy the fed shouldn't be doing it the u.s. government should be investing in the creation of jobs to fit the fed help the banks with that but they didn't help main street that there's no jobs there's no direct relationship between the fed printing six hundred billion dollars giving it to banks and jobs being created the federal reserve is not accountable congress c

at western europe industrialized larger economies over the last thirty years compare that to the economy in the u.s. with that major difference being a larger socialist spending agenda in europe do you realize that the us. g.d.p. an annual basis has been thirty percent greater for thirty years than that of europe so to segregate policy in the economy is really a very large mistake they go hand in hand in the way that you can. get good morning where you calculate product and the way you calculate productivity is that the united states is more productive than europe. because americans walk a thought longer if you control for the most productive economy in the world is simply the swedes you largely hear about one being said much but it's true as the whole notion of a europe deriving in debt and having terrible little growth most of that was a self-inflicted wound from the seydel monetarist treaties of maastricht after all of this you then have a situation whereby we're going to take even more growth of the economy i don't deny that is there and it's there that's a problem what i worry about

the economy. >> i do not want to spend all the time talking at each. i bet i've talked to -- i thought i would talk for a few minutes and then i will be happy to take questions after that. the federal reserve has two brunn functions. the first one is to promote financial stability. that is what the federal reserve was founded four. there is a crisis in 19 07. -- 1907. leaders got together to figure how to structure this instability. there is another crisis in 1914. it the fedders is being created at that time -- there was another crisis in 1914. the fed was just being created at that time. -- there was another crisis in 1914. the fed was just being created at that time. the fed did not do is stop during the great depression. i will talk more about that. one of the major features of the great depression was a near collapse of the banking system which led to a collapse of the money supply. the federal reserve has basically two tied it kills the we can use to maintain stability. -- two types of skill

. >>> this sunday the politics of the economy at home and abroad. the president is dealt a setback at the economic summit in asia over trade and rebuke over his approach to economic recovery. at home the debate over the bush era tax cuts and the cochairs of the president's debt commission propose taking the knife to social security, medicare, and the defense budget. after the election will the white house and republicans be capable of finding common ground? my guest this morning the president's senior adviser david axelrod in his first sunday interview since the democratic loss aets the polls. then the view from the republicans. just back from afghanistan ranking member of the senate armed services committee senator john mccain. plus a special focus on the future of the economy, whether washington will take meaningful action on the debt. with us the former chairman of the federal reserve alan greenspan, former speaker of the house, republican newt gingrich. author of the new book "all the devils are here" about the financial crisis journalist bethan

western europe the industrialized larger economies over the last thirty years compare them to the economy in the u.s. with the major difference being a larger socialist spending agenda in europe do you realize that the us. g.d.p. on an annual basis has been thirty percent greater for thirty years than that of europe so to segregate policy in the economy is really a very large mistake they go hand in hand in the kind of the digital debt. grand marnier you calculate product and the way you calculate productivity is that the united states is more productive in europe. because americans walketh longer if you control for the most productive economy in the world is simply the swedes you actually hear about one being said much but it's true as the whole notion of a big europe droning in debt and having terrible or growth most of that was a self-inflicted wound from the seydel monetarist treaties of maastricht after this you then have a situation whereby we're going to take even more growth of the economy i don't deny that is there and it's there that's a problem what i worry about is the asymmet