GOOLSBEE: And so for Americans, at the least, it's going to be another bad blow to the economy. I mean, I think that's why we should be focusing on trying to shift to exports, shift to investment, and get ourselves growing, because we shouldn't be looking for help coming from Europe.
AMANPOUR: All right. Mohamed El-Erian, Chrystia Freeland, everybody's talking about growth, growth, growth. But it seems the conventional wisdom so far is that all the austerity has not produced the kind of growth that is needed for all of this.
Mohamed El-Erian, are the European governments on the right track?
EL-ERIAN: No. Greece started as an infection in the toe and was allowed to spread, and now Europe has three distinct problems. It has a debt problem, focused on sovereign. It has a banking crisis, and it has a growth problem. So what we're going to have to see is action by the Europeans to go forward on all three.
This weekend, when everybody came together, it was a little bit like an intervention.
AMANPOUR: At the IMF here?
EL-ERIAN: At the IMF meeting. It was a bit like an intervention. The Europeans sat there, and their friends and families came around and said, "Guys, you don't get it. You've got to move now. You don't have time." And I think the Europeans were shaken by what they heard from everybody. And the question now is, when they go back to Europe, can they get their act together?
FREELAND: And I think it's a really huge question. I mean, to return to your initial question, Christiane, of what impact does this have on the U.S., I think potentially devastating. You know, I think that this could be worse than Lehman. And I have a real feeling of how things looked in 2008 before the Lehman crisis, that everyone knew things were bad, but no one was getting together to act. And that's what I see happening in Europe.
And the danger is, there is a real possibility, if the Greek situation falls apart, that you have the whole euro being affected. Some economists have estimated that you would then have in the peripheral European economies GDP collapsing by 40 percent to 50 percent, in the core ones, 20 percent. Imagine what that does to the whole world.
AMANPOUR: And what does it do to people who are watching? What does it do to their savings, to their 401(k)s? What does this mean in real terms?
FREELAND: It means the incredibly weak U.S. economy has another huge blow. You know, Europe as a whole is the biggest economy, and that would just mean a huge shrinkage of the world.
AMANPOUR: So we kind of know what's on the table, but what are the tools? What are the -- I mean, we know the diagnosis. What's the remedy? What is the remedy? The Fed came out this week and it said the significant -- used the word significant, and that caused a whole a lot of uproar.
EL-ERIAN: Yes. I mean, this was the only -- only the third time that we could find that they use the word "significant" before "downside risk," right? The first time was in September '08...
AMANPOUR: So that had a psychological impact, as well as everything else?