have worked together on so many important issues and I know what a personal victory it was for him to see the violence against women act reauthorized last month. There's no woman like hillary clinton.... See More
have worked together on so many important issues and I know what a personal victory it was for him to see the violence against women act reauthorized last month. There's no woman like hillary clinton. Hillary clinton -- and that's a fact -- they shared the stage at the kennedy center. Will they be sharing a debate stage in just a couple of years? We'll get into that just a little bit. Let me welcome back our roundtable, george will again, greta van susteren from fox news, ariana huffington of the huffington post. David stockman, former reagan budget director. And paul krugman. Of the "new york times." Paul, let me begin with you on these economic numbers. The jobs numbers that came out on friday, only 88,000 jobs created last month. 500,000 people left the work force, is this a sign of one of these another spring swoon? It could be. One month's numbers doesn't mean much. It might be revised up. Yeah, I mean, what people forget, is two things. One, we say we avoided the fiscal cliff. But to a larger extent we did not. Payroll taxes went up. We had a pretty big hit to working people's incomes starting in january. The other thing is sequester is starting to hit and businesses have already been making adjustments in anticipation of that. So, we're actually pursuing a lot of fiscal austerity now. You look at the cbo numbers. We have had a basically contraction of about 3% of gdp since 2011, which is bigger, that's more antistimulus than the stimulus ever was. We're doing a lot of contraction on the fiscal side. Why should we surprised if shows up on a economic slowdown? David stockman, your book, 734 pages, to sum it up, you believe everything that washington has been doing since the crisis is hurting a lot more than helping, including stimulating the economy. I think the machinery of government is failing. That's the problem we face. A real threat to the main stream economy. That's why the numbers are far more serious than what you heard friday than is being suggested by the white house. The truth is, if we were still counting the labor force the way we did in 2000, the last time the stock market was where it was today, the unemployment rate would be 13.1%. We had a massive drop out of employment. It's not from retirement. That we're not even beginning to appreciate the harm and the damage and the hurt going on in the mainstream. We had the lowest economic growth in the last 12 years other than wartime for a century. There -- there is a discouraged worker effect. So, the unemployment didn't really go down this month. But, a lot of it is the aging of the workforce. Not just -- if you do an age corrected labor force participation rate, it's not looking as bad. About half of the decline that we have seen is just demographics. lots of stuff. Not just people hitting 65. People often tend to retire before then. The numbers aren't that bad. This month is bad. But the numbers actually over the past year and a half have shown significant improvement once you correct for t demography. George, the president is already facing feedback for including cutbacks in social security and medicare. Particularly changing the changed cpi which calculates the cost of living. The fact is, baby boomers are retiring, bless their hearts. The fact is, 496,000 people left the workforce. We have the lowest workforce participation rate since 1979. Usually after -- and the average after the 11 recessions, since the second world war, we're back within 24-month of the prerecession high. The recovery will be four years old in two months. This is an unprecedented since the depression crisis. Yes, but what they're saying is absolutely true. This is a real jobs crisis. The urgency of the jobs crisis is not just the budget there's a real disconnect between the real crisis is and what his priorities are. I know that dan said that we can do both. We can reduce the dif it is and grow the economy. We can't. We haven't been able to. And even ben bernanke warned the senate banking committee last month that all of these measures, all of these deficit reduction measures, are having a terrible impact. So you agree with david pfeiffer's analysis but not his prescription? No. I think his analysis is key. I think there has been a lot of attacks on his book, which I'm missing. The center point of the book is his analysis. At the heart of his analysis is that the disconnect between the real economy and the financial economy. Everything we are doing has been good for wall street. Quantitative easing. And not good for main street. The president announced that he's going to have this initiative to map the brain, a -- to help this disconnect in the way we're approaching these two issues. But the main street is that we're struggling small businesses. I mean, everyone -- no one is paying much attention to these small businesses. The regulations, are somewhat laughable and silly, but they have a profound impact on the job creators. There has been ton of work on this. What's holding small business back is not regulations -- some of it. There's no correlation, looking across, which parts of the economy do small businesses complain about. There's no correlation between that and actual job creation. One quon. One exception perhaps, on the health care, where, firms that are greater than 50 people, have to pay more and don't you see some firms cutting off at 49? You really -- there might be. You can't see that in the numbers. Talk to them instead of just looking at the numbers. The overwhelming fact of the matter is -- instead of just looking at numbers. Why don't you sit down and talk to these people, lot of them are struggling with this. They don't understand a lot of things that happen. They're very cautious because they see a dismal economy out there. I would like to jump in here, you know, we can debate this regulatory issue forever. The thing is, the main thing we're doing is not working and that is the bubble machine coming out of the federal reserve. Zero interest rates are basically crucifying the savers of america. All of this money isn't getting out of the cannons of wall street. It's going back to wall street. It's going back to excess reserves. It allows speculators to borrow money for nothing overnight. We get bubble after bubble after bubble. But it's doing nothing for the main street economy. Part of that quantitative easing -- we should be raising interest rates with high unemployment? I think to have zero percent with interest rates when interest rates are the price of money, when our economy has massive amount of debt built up over three decades. We don't need more debt and debt isn't a good thing. I know we owe it to ourselves. Still, itit's a burden on the people who owe it. That's hurting and making more of it through zero interest rates. Paul and then george. Yeah, this is actually part of my problem with david's book. Which is, we have huge debt numbers. A huge misunderstanding of what those numbers mean. People say, debt is 3.6 times gdp. We're broke. The country has been living beyond its means. That's not what it means. It's a little known fact that america earns more on its investments overseas than it pays to the foreigners. We have complexified the economic system. Now, some mortgage originator makes the loan, borrows the money, using securities, you count the same debt twice. We have this overly complex financial system. We need to bring it back to simplicity. It has nothing to do with excess. It has nothing to do with zero interest rates. The big increase of interest rates took place when rates were reasonably high. Do you really want to raise interest rates in a deeply whether we should have zero interest rates now. No one can argue that we will have zero rates forever. When the cost of government borrowing goes back to 4%, 5%, the debt itself will be the big driver of debt. Servicing our debt. David. The cbo projections are a rosy scenario. If you believe over ten years, that we're going to create 16.5 million jobs. When in the last ten years, we have only done 2 million. 14 years without a recession. From time we have one every 15 months. If you have done a graph of what we have done, 15 to 20 trillion. We'll have $25 trillion to $30 trillion in national debt. When the interest rate normalizes, the debt will soar. The interest cost will soar. Wait a minute. Hold on. Arianna, and then paul. The cbo also predicted that another 750,000 jobs lost this year ago because of the sequester. Absolutely no plan by the administration to deal with the jobs crisis. I think this is something -- they have a congress that's going to pass -- they haven't introduced a plan. George, you can't have the first congress isn't going to pass it. That's why the economy is failing. Hold on. Let paul come in. The administration, they have a difficult choice to make. Do they talk about what they should be doing? Or do they -- or do they position themselves that nothing is going to happen? They chose not to talk about what's going to happen. They have chosen to do a halfway cut between what's happened and what's going to happen. None of this is real. If you talked to them. You're basically saying it's okay for the administration to simply position themselves to -- do something for the real crisis. When you talk to them, they understand thi they understand that we should be doing more stimulus. We shouldn't be doing this austerity. They know they're not going to get it. The concept that nothing is going to happen, it's that nobody is trying. That's the real disconnect between washington and the rest of the country. If the sequester is created this problem, who created the sequester problem in the first place? They did, because they didn't do their job. What are they doing now? Most of them are recess. They created a lot of these problems. This happens to be their job. They should at least be working toward -- hold on a second. They ought to try. They ought to try. We need more stimulus. Taking advice is a better idea than doing nothing. George will, you saw dan pfeiffer talk about the common sense caucus. The president is trying to reach out to senate republicans who might be part of the deal. I tend to agree that it will be very difficult to get one. You have the debt limit being hit again in mid-may, some time in the summer, a lot of people believe that might force some kind of compromise.Don't? I don't. People on the left has people rejecting to changing the way we calculate the cost of living increases for entitlement programs. On the right the republican position, it's set in stone is that the president got his revenues, end of story. So, when the president comes back for more revenues, all of which is to reduce the deficit, $600 billion over 10 years, that's $60 billion a year, it's a rounding error. Social security, cpi saves $100 billion over ten years. It's 1% of the problem. The machinery is paralyzed. The republicans can't owen up to the fact that we need major, new revenue services. Social security is busted, it's already running a deficit a year, there's nothing in the trust fund. It's confetti. I disagree with everything my colleague just said. This isn't about machinery, it's about people and visions. We have two parties who have fundamentally different visions of what america should be. We have democrats, who want the expansion of the safety net and have gotten it in obama care. They want it to be even more. And we have republicans that want to dismantle a lot of the legacy a great deal, the great society and the new deal. Of course, it's paralysis because the parties don't agree at all on which direction this country should take. The last election wasn't -- did not resolve it one way or another. Not true they declared a distinguished vision at the moment. We have 64% increase in suburban poverty. We have a doubling of people on food stamps and disabilities payments. We have millions of people's homes under water. The administration is ignoring their crisis. Because they're prioritizing deficit reduction. This is not a right/left point. They're ignoring what's happening in europe. The eurozone has the highest unemployment rate it has had. All the austerity measures haven't worked in europe. They're not working here. Yet, the administration is not putting forward a coherent vision that prioritizes jobs and growth. The reason we have paralysis is because we don't have the money. And I think people want to take care of people. I don't think people want to take away the safety net. If we didn't have a revenue fight in terms of how much money we have, the condition of the economy, the condition of the national government, we wouldn't be having half these fights. And the two parties might be able to come together a little bit better, if we fundamentally got this country up and running. They're glorified concierges that introduce politicians to money. They don't stand for anything. They don't believe for anything. Why do we still have too big tfail? We allegedly had a heart attack, the banks are bigger than ever. Why don't democrats do something to break them up and cut them down to size? I want to move on. Hillary clinton back on the stage this week. We saw her with joe biden. Gave another speech at a women's conference here in new york. Here was her plea. Let's keep fighting for full participation. And let's keep telling the world over and over again that, yes, women's rights are human rights and human rights are women's rights. Once and for all! Arianna, she's also announced that she's writing a memoir of her time. Chelsea clinton on the cover of "parade" magazine this week. Any doubt that she's back in? She's obviously running. What I was hoping that she would have taken more time what she herself called untired. That is her term. She wanted to sleep in, to be able to recharge herself, she hasn't given herself that time and I think that's sending a bad message to women, the only way to succeed is to drive yourself to ground. She collapsed. She had a concussion. Right now, you see a greater debate among corporations, among individuals, how can we define success? How can we reduce stress and burnout? Which is having a terrible impact on our health care system. 75% of health care costs are because of chronic, preventable diseases. Many of them brought about by stress. She could be an incredible leader in helping our success. Hillary hit the mat in december when she got sick. Hillary doesn't give up. She's done this for the last 40, 50 years. She's not going to -- she's not going to give up. I don't think she -- hillary -- she's out there all the time fighting. She can't sit home and do nothing. George will, if hillary clinton gets in she clears the field, do you buy that? No. The consensus of people who talk about presidential politics, she's the prohibitive favorite. When was the last time that prohibitive favorite for the democratic nomination lost it? You have to go back four years, to 2008, when she lost. 50-point lead in the spring. Things are different now. I watched the whole reaction to hillary. And I think, have I slipped into this dimension, sort of spock with a beard territory, because we have democrats loving this candidate. Fractured republicans, disorganized. Who switched the labels on the parties? I'm under the impression we have much problems of governance in this country. And why are we worried about 2016 election? We ought to focus a year or two on the problems. Very fair. True enough, it created a controversy, at least online attend of the week. The president goinout to california and praises the attorney general of california, kamala harris. From the stump, he said that she's brilliant, she is dedicated and she's tough, and she also happens to be by far the best-looking attorney general in the country. Check out the montage of reactions. San francisco chronicle, politico. All kinds of outrage. It seemed. It was all over the twitter sphere. Arianna, did the president make a mistake here? Everybody should relax, lighten up. In our society it's unbelievable. George and I were talking about in the green room, the modern weakening of modern moraless. It's the modern strengthening of minor morals. I mean, I wished there was more outrage about the jobs numbers than we had about kamala harris. It's a fun story. I think, it was a social comment. He made a comment about her. Although I do think the attorney general of maryland who was an early supporter of president obama, should be offended. He's a pretty handsome attorney general. Anyway, it's a social comment. Finally, a democrat said something accurate. There's no growth industry in this industry of synthetic indignation. Thanks to progress, they do it on the internet. It creates this change. You're a victim of them on the internet. Look, it was dumb. It's right to slap him for it. But you know, there's a little bit of pig in all of us. I can speak from personal experience. Before we go, before we take a break, george, there was one sincere outrage this week, down in atlanta, 35 educators including the former superintendent of schools, have all been indicted on conspiracy charges for trying to inflate the test scores of their students and you're hearing a lot of education experts saying that this is not an isolated problem. It is not. They changed the answers on standardized test. When you link teachers' compensation and job progress to the performance of students on standardized tests, you put in a place an incentive to cheat. In 2014, next year, we'll have 100% proficiency in math and reading. The danger is that we will, because we're going so dumb down the standards of proficiency. We put in incentives all linked to standardized tests. Let me play lawyer at the table. They haven't been found guilty yet. However, and the evidence is quite overwhelming. They have the presumption of innocence. However, if convicted it is absolutely deplorable. 30 seconds. Cheating is symptomatic of a huge cultural problem that w have. In washington, in terms of not being honest. Higher taxes for you. Big declines in defense, not there. The cheating that's going in terms of the financial system is totally out of kilter. And really needs to be fixed. And wall street isn't being addressed. We have to take a quick
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