in the late 1990s, the economy was booming. unemployment was at a 30-year low and inflation was also at a 30-year low. did that mean inflation was dead? during the 1970s the american dream threatened to become the american nightmare. for the first time, we were faced with skyrocketing prices and exploding unemployment. stagflation -- why couldn't we beat it? with economic analyst richard gill we'll explore that question on this edition of "economics usa." i'm david schoumacher. schoumacher: since the passage of the employment act in 1946, it has been accepted policy for the government to fight unemployment by stimulating total demand. often, inflation resulted. when that happened the government shifted gears and clamped down on demand in order to decrease inflation. for five administrations the government more or less successfully practiced the delicate art of balancing off unemployment and inflation. the experience of the 1950s and 1960s indicated that when unemployment went up, inflation would, correspondingly, fall. by the t

the chair has a tremendous amount of influence on the economy, on the path of the economy. we certainly have seen in my opinion is that the monetary policy we had a decade ago contributed to inflating the housing bubble. so when you get monetary policy wrong, lots of bad things can happen that affect all of us, that affect labor mark and our wallet, so i think it's important that you get someone there. i say someone who is a former staffer on the bank committee who worked on fed nominees, there has been a shocking lack of due diligence on the part of congress in terms of actually kind of looking at these nominees in a serious way. most of the time they're just really run through without very little questioning in a serious manner. i hope in the future we spend a fair amount of time on this. i think it's important for the public to understand monetary policy and i don't think that education has happened. >> we have ten days to hammer out a budget, how does that go into the mix? >> the nomination of the fed chair will go to the committee and be accompanied by some other nomin

make the economy work for us. why shouldn't we have a minimum wage that is at least as high as, adjusted for inflation, the minimum wage was in 1968? i mean, that would be $10.40 today. but the society is so much more productive. if we figured productivity into that, it would be at least $15 an hour. we ought to have glass -- you know, the glass-steagall act ought to be resurrected, so that there is that wall between commercial and investment banking, so we don't have too big to fail banks that wreak havoc on the economy and on the middle class and the poor. we ought to cap the size of the banks. and we ought to make sure that the banks are not as large and as powerful as they are right now. we've got to make sure that the earned income tax credit is larger. that's a wage subsidy. it was a conservative idea. but it's very important to people. we've got to have a tax code that is equitable. and i'm not just talking about income tax. i'm talking about social security taxes. exempt the first $15,000 of income from so

progress in the economy. we are tied to the data. we don't have a fixed calendar or schedule but we have the same basic framework that i described in june. for ending the asset purchases program is a substantial improvement for the outlook of the labor market. last time, i give a seven percent as an indicative number to give you some sense of where that might be. as my first answer suggested, the on implement rate is not necessarily a great measure in all circumstances of the state of the labor market overall. example, last month, the decline in the on a raking about more -- came about more about the participation not about the increased jobs. what we will be looking at is the overall labor market situation including the unemployment rate but including other factors as well. in particular, there is not any magic number that we are shooting for. we are looking for overall improvement in the labor market. >> mr. chairman, one question with three parts -- have you indicated to president obama you did want to ser

to revive the economy. he considered deficit spending a dangerous measure. fdr spent the 1932 campaign declaring his faith in a balanced budget and blasting hoover as a big spender. roosevelt combined his criticism of republican deficits with an appeal to "the forgotten man." in november, "the forgotten man" spoke. millions voted for roosevelt and hoped. but in the four months before inauguration, the depression grew deeper. in march 1933, roosevelt was the leader of a nation with 1/4 of its work force unemployed. something had to be done. so first of all, let me assert my firm belief that the only thing we have to fear is fear itself. nameless, unreasoning, unjustified terror which paralyzes the... rosina tucker remembers the hope returning. uh, you remember his saying, "there's nothing to fear but fear itself." he had his fireside talks... and, uh... uh, the people listened to them all over the united states. they made it a point to have nothing to do during those fireside talks. they sort of... it seemed

for the economy. the federal reserve policy is to do whatever we can to keep the economy on course. so if these actions let the economy to slow, we would have to take that into account, shirley. this is one of the risks we are looking at when we think about policy. that being said, again our ability to offset these shocks is very limited particularly a debt limit shock and it is incredibly important that congress and the administration work together to find a way to make sure the government is funded, having services are provided. the government pays his bills and avoid an event like 2011 which had at least for a time in noticeable adverse effect on confidence and the economy. >> cnn money. this year marks five years since the financial crisis began. hank paulson, who you've worked very closely with, says his biggest regret was he was unable to convince the american people that was was done were not from wall street, they were from main street. what is your biggest regret as reflect on the five year a

economy for the u.s. and global financial systems would be large and lasting and very damaging. >> thank you dr. elmendorf and i noticed that you said default on any application because some of our colleagues have this debt prayer decision bill bill would call it the pay china first bill which says you don't have to pay our troops in the field. you don't have to pay doctors on medicare that you paid on holders including the government of china but what you are saying is default on any application would send a very bad signal. >> yes congressman. it's hard for congress to know exactly what happened and in my few defaulting on some application would be different than defaulting on others but we don't have a basis for analyzing that is fortunately we have not had a lot of experience with the government defaulting. given how much money the federal government owes to stop paying what is owed is a very risky strategy. >> thank you. i will reclaim the balance of my remaining time. trying to just put this all in

used to control the economy. our story begins in 1944. americans had vivid memories of the great depression. they remembered 1/4 of the work force without jobs factories closed families hungry. and they remembered an inspirational leader who showed them that the government cared. it was the war not the new deal that ended the depression. by 1944, 12 million people were in uniform. 66 million more had jobs supporting the mightiest war machine ever known. amidst this world conflict senator harry truman said, "war is hell but peace might be worse." working with truman was senate staff aide bertram gross. the big upturn during world war ii was based on government spending for more production. when those contracts were withdrawn we said things could topple to pieces. everyone felt that way. ed. it could have top people feared a return of hard times. the man leading the nation out of the depression made bold promises. a second bill of rights under which a new basis of security and prosperity can be established for all

does the fed see something in the economy that others don't? with the widely executed cut in stimulus on the proverbial back burner, is it time to rethink the way you invest? >> whale of a fine. jpmorgan will pay almost $1 billion more than expected and admit wrong doing as part of its london whale trading debacle. and that want its only big legal payout today. what the fines and settlements mean to the firm, its business and shareholders. >> and buying in the sky. we don't like it but we do it, shell out money for stuff when we fly and it's becoming a big profit center for the airlines all that and more tonight on "nightly business tonight," thursday, september 19th. >> welcome, everybody. i'm tyler mathisen. yesterday stock investors were caught by surprise. today they caught their breath. stocks exhaled modestly one day after the rally on the unexpected news the fed would continuing buying bonds every month to keep the economy on track. most figured the fed would take its foot off the gas pedal, if only slightly. yesterday record highs for t

the economy is still slack, so if republicans want the economy to grow faster, create more jobs faster, they should want to get rid of it. it's irresponsible to keep it in place. if congress is serious about wanting to grow the economy faster and creating jobs faster, the first order of business must be to pass a sensible budget that replaces the sequester with a balanced plan that is both fiscally sound and funds the investments like education and basic research and infrastructure that we need to grow. this is not asking too much. congress' most fundamental job is passing a budget. congress needs to get it done without triggering another crisis. without shutting down our government or worse threatening not to pay this country's bills. after all the progress that we've made over the last four and a half years, the idea of reversing that progress because of an unwillingness to compromise or because of some idea logical agenda is the height of irresponsibility. it's not what the american people need right now. these folks standing behind me are people who are small business owners, peopl

restraining the economy. clearly the federal reserve is concerned about these higher rates. they want them lower before they're ready to reduce their asset purchases at this point and they're concerned about what a 2.8 or $2.85 ten-year yield means for the housing market and the rest of the economy. >> russ, what does this mean? >> absolutely. >> what does this mean for the investor on the back of this? >> i think look, a couple things. certainly a cautious decision but to steve's point, you've got mortgage rates at 4.8%. again, that's low by historical standards but for a housing market that really has been the driver of the recovery you have to be concerned about what impact would higher rates have on housing. generally this is a dovish decision supportive of risky assets in the near term. i think this may be a fairly short lived rally. we're going to go from excitement about the fed's decision quickly to worrying about what's happening with the continuing resolution and the debt ceiling, so still likely to

what we are going to do is the right thing for the economy. and our assessment of the data since june is that taken collectively that it didn't quite meet the standard of satisfying our -- or of ratifying or confirming our basic outlook for, again, increasing growth, improving labor markets and inflation moving back towards target. we tried our best to communicate to markets. we'll continue to do that. but we can't let market expectations dictate our policy actions. our policy actions have to be determined by our best assessment of what's needed for the economy. >> reporter: peter barnes, fox business. you mentioned fiscal business in the statement today. are you concerned about a government shutdown? we're hearing more about that possibility. did that come up in your discussions at this meeting? what do you think will be the impact of a government shutdown on the economy? and what could the feds -- or would the fed be prepared to respond to that and help the economy with additional accommodation? for example, additional asset purchases. thank

effects the economy. the fed has injected $2.8 trillion in the financial system. the moves have boosted the stock mark into bull market territories and interest rates are low and boost the housing market, the very market that brought this country into recession. there are fears that the fed could fuel inflation, but the fed sees no harm of that right now and can see no harm to a fragile economic recovery. and to everybody's surprise the fed will not change its bond purchasing program at least for now. that's the perspective from the fed. as for business leaders, they also remain cautious about the economy and say they're hiring as a result will remain flat. according to results of a business round table survey just 32% of ceos say they expect to hire more workers in the next six months. the dysfunction in washington over the budget and the debt ceiling also adds economic uncertainty. president obama met with members around the roun round table and addressed that concern. >> i think this is the time for us

the economy hurt the banks and the banks hurt the economy. historian eugene white explains. banks' problems began to feed the fires of the depression through a multiple credit contraction. once a bank ceased to make a lot of loans when it began increasing its reserves, not making new loans to new customers an increasing number of businesses began to fail. businesses couldn't pay back their loans. many banks found their loans weaker and they contracted even further. so it was a slow unwinding of the financial system. what was the federal reserve doing? the fed was supposed to engage in a countercyclical policy to counteract trends in the economy. but instead, it, at the beginning began to play a very neutral role. it just let the banking system slide very slowly into chaos. once again panic took hold. in 1930, 1,000 banks failed. in 1931, more than 2,000. in 1932, the american people looked to new leadership to lift the country out of its economic crisis. i propose to show that this leadership misunderstood the forces that were involved in the economic life of the country. it

we are -- >> that's the president's message on the economy said he had a policy to help fortify the economy. and make it stronger for the future but the two other big headlines. president saying that several people have been wounded, some killed in what he called a mass shooting at the navy yard in washington, d.c. now, this appears to be an ongoing matter, for the police chief until washington said moments ago there could be potentially two other shooters at large. stressed the word potentially on that. now with regard to syria, one headline there said the agreement with the russians that arrived over the weekend could end the threat of chemical weapons in syria more on that throughout the day as that continues to take shame in the coming weeks ahead. first to elizabeth mcdonald for the message on the economy which is why the president is out today. elizabeth. >> good to be with you bill. the president talked initially about what the white house did to stop the financial crisis, talked about the bailouts ab talked about rescuing the autoindustry. just want caveat here no mention that the t

the economy performs. the bottom line here is that, and i think this is where the fed tied itself in a knot, the economy didn't live up to their expectations and you know what? in june it shouldn't have been too hard to figure out that the economy wasn't going to live up to the expectations because we already saw very slow growth in the first half of the year. if anything the fed should have seen ahead to the september forecast to say, you know what? we may be revising these forecasts down. david: jon, there was also a question whether it was freaked by the market reaction to this. >> yes, it was. david: and a question whether or not they bowed to the market doing what they did yesterday or not doing what they didn't do yesterday? >> there is this weird shadow boxing game going on. the answer is yes, they were freaked by the markets. they didn't like how much long-term interest rates went up and they wanted to pull it down. you could argue there are other ways to do that. but you know, they chose their, th

in the economy. i want to talk to a guy who invented one of the most important rules, that being john taylor, who is a professor -- he was undersecretary of the treasury during the bush administration. he's currently a professor of economics at stanford university. he's the author of famous taylor rule, which, by the way, used to a fed guideline until the central bank went all helter skelter in the last several years. all right, john taylor, tell us about the taylor rule and why the fed should readopt it? >> first of all, it's a rule. i like what you said at the beginning, we have to get back to a rules-based policy and get away from the fine tuning and tinkering. there's been a lot of experience with this one. we had a terrific performance. economists call it the great moderation. the economy was strong, inflation came down, unemployment came down and growth was strong. i say get back to a rules-based policy. that's one we've had a lot of experience with. there's new proposals out there, you're hear

about to the economy. other studies go even beyond that, and they say even the net contribution without taking into account the contribution to the economy, just the fiscal impact, is going to be positive in terms of more -- generating revenue for the government than taking art, and alex wrote about this forcefully. my message is this. we are in an age of globalization. we have won the intellectual case for free trade. we can't say at this point we have ideal free trade conditions across the word, but we won the pace for free trade, and nobody speaks girns free trade on an intellectual level saying i'm against free trade, but for free trade, but -- and then they talk about the level playing field and that, but intellectually we won the case for free trade. we are far from winning the case for free immigration. i think it's simply not reasonable to expect that a world that's moving gradually towards free trade continues to contemplate immigration in the way it is, but trade and goods is equivalent of 45% of

save the u.s. economy? let's bring in the former senior economist at bear stearns, douglas holtz-ecan and forbes opinions editor john tammany. let's start with t.a.r.p. take it piece by piece. hank paulson said t.a.r.p. was a great success and not only was it paid back it made $32 billion. what's your take on t.a.r.p.? >> well, larry, as you know at the time i thought something like t.a.r.p. was very important. john mccain stopped mccacampaig and i came back to get a successful vote on the t.a.r.p. program. i think, however, with benefit of hindsight it turned out less important than hank paulson thinks. >> what do you mean? >> well, i think in the end it was a liquidity problem. >> all right, you have t.a.r.p. on the table and doug put on bernanke's liquidity. so the liquidity problem solved the financial problem, do you see it that way? >> no, i don't think so. when you look at t.a.r.p. it robbed us of the recovery. look at japan and germany after world war ii they were reduced to rubble, but over a few y

the economy. we really -- after we got through that one day of euphoria, the market had trouble getting out of its own way. >> i think part of the issue, scott, when you think about a weak economy, the next thought is, what does that mean for earnings? we're approaching the end of the third quarter, just a few days away. that's going to be really the opening in terms of what is to come for this economy. if we see corporate earnings take a hit, that, of course, is going to directly impact the stock market. in addition we've got washington and the clock ticking there a little louder now. now a week away from a possible government shutdown over the budget, the potentially far more serious debt ceiling battle also closing in. your money in the crosshairs of a dysfunctional washington with the very latest on how far apart the two sides are. two key lawmakers are here live with us to talk about that as well. >> just when it seemed blackberry was in its darkest hour, fairfax financial offering $9 a share

top lying growth if the economy heals. in that category i would include technology companies, energy companies, also some manufacturing companies, particularly those that are likely to benefit from lower u.s. domestic energy costs. >> russ, we will leave it at that. thank you for joining us. chief investment strategist at black rock. >>> and shares of the dow component microsoft ended only slightly higher, despite making bold moves and costly ones to attract more interest in its stock as the company prepares for a lot of changes in the months ahead. josh lipman has more. >> reporter: this morning, microsoft announced a $40 billion stock buy back as well as boosting its quarterly dividend by 22%, 28 cents per share, the board approving the stock repurchase plan to replace the previous program set to expire at the end of the month. microsoft, known for shareholder friendly actions, paying a regular quarterly dividend since 2004. colin gillis covers microsoft, says he wasn't surprised by the relatively mooted reaction to the

economy in the u.s. and around the world bet is to say that the business of the u.s. and the u.k. became the business of printing lots of bonds and then manipulated those bonds using derivatives that's how the derivatives market got to be six hundred trillion in size on a global g.d.p. of about sixty trillion then you have the crash of two thousand and eight which was a crass of financialization securitization to get out of that crash the government decided along with the treasury and the federal reserve bank to increase financialization which increased the profits of the people who caused the crash to begin with and as we've said on the show along stacey people are not needed in an economy where the top two or three hundred people can just get money for free from the fed similar to saudi arabia they don't need the citizens of saudi arabia they just they just pump more oil and there's incredible poverty in saudi arabia in america now there's incredible poverty because the people are not needed their jobs

the fed is not the problem with the economy. it's the fiscal and regulatory policy. >> it's interesting marra, chairman bernanke said the fed had been overoptimistic. that was his word about the idea the idea is growing faster and they'd be able to ease off the stimulus puddle. they also lowered projections for growth the rest of this year. of course all this comes just at a time when congress and the president seem headed for another possible train wreck over the government budget and also the debt limit. >> bernanke also mentioned the uncertainty about that also a reason to keep his foot on the gas pedal. there doesn't seem to be a way out of this. republicans are pursuing the strategy to shut down the government is obama care is not defunded or delayed. same with the debt sealing. the president is saying i'm not going to negotiate on the debt ceiling and not stand for changes in the obama care. that's where we're at. it's unclear how the republicans get out of this unless they get out of the system and pass a clean cr are fun

money at the time the economy would be very overheated and go into the crisis. there would be a tremendous correction even greater than the one we had in two thousand and eight two thousand and three are really quite minor compared to what happened in western developed countries and which was certainly far more smooth i would say interims of the social implications for the wider strata of the population compared to what we had in one thousand nine hundred eight because there were these reserves that were used for the benefit of the broader public so i think that kind of strategy was validated then and it will continue at least to some degree to loom large and to be very significant in terms of the strategic view of the russian authorities but one other point i want to. to make is that we shouldn't solely focus on the budget situation when looking at the potential efficiency improvements one major area which is frequently overlooked is of course the corporate sector including russia state companies and i think in terms of forging ahead with better corporate gover

that is what is keeping the economy down. the good news is if they reverse the policies, the economy will soar again. >> david: nice to know good news on the horizon if we do the right thing. why is it the very people this president is fighting the hardest for are hurting the most? >> what i like to say about this is it takes two to tango. i won't sit here and tell you the policies are working. the numbers you quote are accurate. things are not good for those people. president cannot do this on his own. i want to read you something. one of our colleagues who we have had on the show, dan mitchell, libertarian scholar from the cato institute wrote he doesn't believe that obama deserves the full blame. he said started before he got there. he deserves part of the blame, not all the blame. but what about congress? is >> david: we are talking about policies, though. that is the point. the policies that the president are -- by the way, this president had the congress, both houses of congress for two years, rick. that didn't seem to

other g eight economies the u.s. and germany are only nearing pre-crisis production levels while france and italy still lag far behind the brics countries are in the lead china having doubled its two thousand and seven figures and india expanded its production by over thirty percent for russia the current industrial production index exceeded that of two thousand and seven by six percent manufacturing of consumer goods has been expanding in the last months especially clothes and shoes as well as plastic paper and rubber goods however this growth is offset by a slowing production of such important sectors as electric power and engineering investment activity in russia has also slowed still average supply of capital goods over the last three months is eight percent higher than in two thousand and eight in particular car imports figures are much higher than before the crisis as for the state budgets it was marked by a sound performance in the second quarter of twenty thirteen russia's budget surplus amounted to two point

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but when the fed decides it's time to slow the economy down, it pulls money out of the economy by taking it back from the 21 primary dealers and gives themmen -- an equivalent amount of bonds. the fed influences rates through these actions. we have already seen rates inch back up. rates are higher because markets believe the fed's next move will be to start to hit the breaks. what the federal reserve says on wednesday could have a very real impact on you. let's find out how fears of hire interest rates are already effecting consumers and what may happen in the months ahead. for that we go to minnesota and grand rapid's state bank. joining us is the bank's ceo. noah, you come from a family of bankers, and you have seen how -- how the fed's actions and the markets fears of them have had an impact on mortgage rates. >> certainly we have, and as a fourth generational banker, we have multi generational customers. and we understand that connection to the community. it creates opportunities for both buyers and sellers. we see consumer confidence boosting, and home sales starting to pick up in o

and the economy. thank you for joining us. let me begin with you professor. you wrote a piece today with this title, why we'll be better off if the walmart protests fail? >> i think the protests -- while they may be well-intended no some cases would have economic disaster effects if successful. the problem with america today is not low wages but high levels of unemployment, high levels of part-time work. only 58 out of every 100 adult americans working compared with 64 or 5 a decade ago. trying to raise wages and raise labor costs to employers will make life miserable for workers because it will lead to unemployment. it will lead to higher prices for consumers who purchase goods at walmart, the most popular store in the united states, and will have generally undesirable effects across the economy. >> robert rice, i believe you disagree with that. make the opposite case. >> well, first of all, you know, the minimum wage right now, if it were adjusted for inflation from 1968 would be 10.40. it's $7.25 r

i don't see the economy changing much. i think the economy is getting more efficient and the scarcity for those high end engineering jobs i think it's going to get worse and i think for the low end jobs it's going to get rougher and rougher. i don't see it changing. we feel the 120 jobs so far this year we have 50 other openings. we'll fill them, it's not that bad, it depends on the fings you're in but the software is very tough right now. >> at one point you were offering $30,000 for a referral. >> that's right. we were offering 30. now it's $10,000. ali, if you referred me to a software developer, your brother, sister, or anyone i will cut you a check for $10,000 my friend. >> how is that going you're looking for people does that mean people obvious know if they are qualified. are you having to hire people away from other employers. are you having to deal with their veetio visa issues? what do you have to do to get those other 50 people you need? >> it's interesting, there's competition from other high growth companies i

inflation and trying to slow down the economy, but rather, they are reacting to the fact that the economy next year will probably grow a lot faster than this year. so does that in itself take some of the air out of the balloon? of course. it will slow down but there are other moving parts that i think will push the overall economy to grow somewhere in the neighborhood to 2.5 percent or 3% over the next year or so. things are getting better. >> anthony, we'll leave it on that positive note. >>> a troubling assessment, though, of the nation's first state. moodies an lit ticks that tracks economies says every state in the country is currently out from the risk of falling back into a recession except for delaware. why is that? it hasn't seen a big return from the industry. >>> while most states have recovered from the great recession, as susie told you. new figures show the income gap between the richest and the rest of the country widened to a new record last year. hampton pearson has more on the nation's growing income inequality. >> reporter: the wealthiest americans enjoyed quite a come b

i think the affect on the economy is broader. it is not a good thing, coming when the economy is still trying to gather steam. but we're only talking about a modest hit to the economy assuming it only lasts a few weeks. some parts of the economy, arguably affected, another area to watch for, consumption. we're at a point when the consumers are only beginning to get back on their feet. and the government shutdown, one of the risks you have is it will hurt the consumer confidence, which affects the markets, as well. >> and the volatility, is that a possible concern? >> yes, we have seen a rise in volatility, we have the implied volatility, which is below its long-term average, back when the close was 16 or 17, in the debate in 2011, the trade is as high as 40s. so we're a long way from that, but if the temperature rises in washington people worry about the debt ceiling and it is very likely that volatility will rise before it is all open. >> yes, the way it seems, the market will be affected by the temporary shutdown, we did lose t

but now the reason why iran is coming to the table is the situation with the economy. it's getting worse. i think that is really the be all end all with why iran has come to the negotiating table. if you consider politically while iran does not necessarily have great relations with its neighbors or international community it's much more comfortable than it was five or season years ago in the iraq invasion. the paranoia has subsided for regime change. iran has difficulty buying goods and making ends meet because of the collapse of the mismanagement. it really is second to none when it comes to bringing iran to the negotiating table. >> how do you see the relations. >> you have a political elite that has been in power since 1979. typically what happens with this elite, and it happens in iran, this elite gets more and more out of touch with the realities of the order citizens. perhaps the events of the arab spring, what has happened in the arab countries, came as a wake-up call to this leadership, and they said, look, we cannot go on the way we do because if we do, if we

the government is now down to the wire to avoid potential drags on the u.s. economy. the first comes october 1st, and on friday the sense of uncertainty was captured by the u.s. senate chaplain. >> lord deliver us from governing by crisis. >> but crisis is now where things are headed. the republican-lead house said it is unwilling to consider an emergency spending bill that just passed the senate, because the senate bill didn't kill obamacare with house reasoning refusing to drop testify that fort, stocks closed lower for the sixth straight day as investors worried the government will shut down october 1st. >> if the government shuts down on tuesday, military personnel, including those risking their lives overseas for us right now, will not get paid on time. federal loans, small business owners, families buying a home will be frozen. >> the last time we had a government shutdown when bill clinton and newt gingrich squared off, it lasted for 26 days. according to the congressional budget office that shutdown shaved a half of a quarter worth of quarterly economic growth

down on the economy and what could the fed be prepared to respond to that and help the economy with additional accommodation, additional asset purchases? >> of factors that did concern us in our discussion was some upcoming fiscal policy decisions. i would include the possibility of government shutdown and the debt limit issue. connell: we will talk about those issues, former executive vice president, director of research at the atlanta fed, from cumberland advisers. turns out of the chairman was concerned about these big issues that will take up all of our time whether the government shutdown, what do you make of that and how it played into the decision not to do what people to do? >> he is right to have worried about the fiscal situation and that is not new. this has been going on for the better part of a year or more as we come up to these fiscal cliffs and stand on the edge of a diving board and don't seem to jump in but obviously the fiscal situation has been very important to the health of the economy and it poses a downside risk if we don't get our fiscal house in order. conn

by over financialization of the economy in the u.s. and around the world that is to say that the business of the u.s. and the u.k. became the business of printing lots of bonds and then manipulating those bonds using derivatives that's how the derivatives market got to be six hundred trillion in size on a global g.d.p. of about sixty trillion then you have the crash of two thousand and eight which was a crass of financialization securitization to get out of that crash the government decided along with the treasury and the federal reserve. bank to increased financialization which increased the profits of the people who caused the crash to begin with and as we've said on the show along stacey people are not needed in an economy where the top two or three hundred people can just get money for free from the fed similar to saudi arabia they don't need the citizens of saudi arabia they just they just pump more oil and there is incredible poverty in saudi arabia in america now there's incredible poverty because the people are not needed their

of the global economy. we'll get the inside line when we come back. later, don't miss andrew's exclusive interview with lloyd blankfei inspect. that's coming up at 8:30 eastern time. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what

economy in the u.s. and around the world that is to say that the business of the u.s. and the u.k. became the business of printing lots of bonds and then manipulating those bonds using derivatives that's how the derivatives market got to be six hundred trillion in size on a global g.d.p. of about sixty trillion then you have the crash of two thousand and eight which was a crass of financialization securitization to get out of that crash the government decided along with the treasury and the federal reserve bank to increase financialization which increased the profits of the people who caused the crash to begin with and as we've said on the show along stacey people are not needed in an economy where the top two or three hundred people can just get money for free from the fed similar to saudi arabia they don't need the citizens of saudi arabia they just they just pump more oil and there's incredible poverty in saudi arabia in america now there's incredible poverty because the people are not needed their jo

behavior of the economy. this is not a pledge that we're going on a lockstep march towards papering we're going to watch how policy evolves and adjust our policy accordingly. that's just what they did. they looked at the facts and said it doesn't merit the tightening we thought it would when back in may/june >> but interestingly enough none other than janet yellen herself has pointed out that communication is central to what the fed is trying to do. >> rose: communication policy? >> communication policy. it's not just about injection of money or purchases of assets, it's about words as well. give than she's said that, given that the fed is focusing on verbal intervention now more than ever we need to have trust that when the fed says something it means it. >> rose: was it larry summers that said confidence is the greatest stimulus there is? >> absolutely. >> rose: (laughs) let me -- it is possible that chairman bernanke is not sure so he will do-- to use a washington expression-- kick the can down the road an

today, archaeologists struggle to reconstruct the economies of the ancient world, because an economy is essential to any society, past or present. to understand the evolution of economies is to better understand people of all places and of all times. captions by captionamerica, pittsburgh, pa. funding for this program was provided by... for more information on t annenberg media ♪ by: narrador: en este episodio raquel y arturo siguen con la búsqueda de angel el hijo de rosario y fernando. ¿perdón, conoce ud. a héctor? ¿cómo? héctor. ihéctor! iah, héctor, sí! allí. también en este episodio raquel comienza a conocer más a arturo. ...pero ya pasó. en este episodio

economy is not growing like it used to in the past. nowhere is that more obvious than in the labor market. so, you know, business is right in saying, we don't have the economic conditions to justify increases in wages, but i think what people really have to recognize is that we're living in a different economic reality today than we were four to five years ago. i mean, that's as true of china and india as is true of the united states. here talking on labor day in north america, it's the plight of mcdonald's workers or hotel workers in long beach to try to get a living wage. >> we're going to keep jeff rubin. he'll stand by. when we come back, we'll talk to you about why america's road to energy independence likely will not lead to lower gasoline prices but to major changes in the way americans live and do business. that is straight ahead on "real money." the young folks. >> what are the laws going to begin to take effect? >> reporter: the laws do not go >>> oil and gas production in this country have shot up over the last few years wit

twenty summit going to focus only on the economies of the twenty largest economies in the world it's going to be all about syria. absolutely and. as you say syria certainly does seem to be taking center stage here the twenty third so you know a g. twenty summit as you were saying though france president francois hollande has suggested that he will join barack obama if america does strike syria although very very few of the people supporting it russia and trying to continue to be on one side of the fence and america and france and very few others on the other side of the fence and he said well i've still got you here you're at the venue for the g. twenty summit just a short distance from where i am here in some petersburg i understand that with the leaders of the twenty nations of the g. twenty in attendance we also have the leaders from brazil india china south africa of course we're talking about the brics and he said they had a meeting today on the sidelines of the g twenty didn't they. they did have a meeting in fact in the meeting on friday the second day of this summit i should

the economy is improving. but i think probably bernanke was hoping to see an acceleration of the rate of improvement. and what he's seeing, i think, is a continuation of more or less the same rate. maybe if they hadn't been doing it, you'd have seen even less than 2%. who knows. >> i think my question was, though, if you look at them saying we need to see a big pickup in the economy, that's not necessarily something that's going to happen next month. >> no. who knows when it's going to happen. no. you could be looking at this rate for quite a while. but i'm no good on that sort of thing. i really don't try and predict it. >> brian, i know the next fed chairman is going to be your regulator. do you know janet yellen well? do you have any thoughts about who you'd like to see as the next fed chairman? >> we know all the candidates. so that's a question that anybody will answer, i think it's up to other people to make that decision. we'll work constructively with all the candidates i've heard mentioned. i'm sure t

of the economy the economy is not something that's out there secondly i want people to understand that it's not just a matter of issues of fairness this is hurting the economy when so much of the nation's income and wealth go to the very top the rest of the country doesn't have enough purchasing power to keep the economy going and that's exactly the problem we're having and thirdly i want people to be inspired to do something about this ok but if the system is the fault the system is capitalism is socialism the answer no absolutely not you know every time in our nation's history when capitalism has gone a little bit off the rails when we've had access. in a kind of concentration of income and wealth at the very top like it in the eighty's eight hundred ninety s. one nine hundred twenty s. what did we do we did not turn to socialism or fascism or communism like other countries did we have reformed capitalism we saved capitalism from itself from its own excesses and i think we'll do it again i have great faith in this country its resilience as winston churchill once said americans always

of the economy the economy is not something that's out there secondly i want people to understand that it's not just a matter of issues of fairness this is hurting the economy when so much of the nation's income and wealth go to the very top the rest of the country doesn't have enough purchasing power to keep the economy going and that's exactly the problem we're having and thirdly i want people to be inspired to do something about this. ok but if the system is that fault the system is tapped little is and is socialism the answer no absolutely not you know every time in our nation's history when capitalism has gone a little bit off the rails when we've had access. to a kind of concentration of income and wealth at the very top like it in the eight hundred eighty s. eight hundred ninety s. one nine hundred twenty s. what did we do we did not turn to socialism or fascism or communism like other countries did we have reformed capitalism we saved capitalism from itself from its own excesses and i think we'll do it again i have great faith in this country its resilience as winston churchill