'This Week' Transcript: Barbara Walters Exclusive with Massachusetts Senator-Elect Scott Brown

AILES: The first advice I'd give him is listen to everybody and then go in a dark room by yourself, because in the end, it's all going to happen in your brain. If you actually believe all these things that you're for, and Richard Neustadt in "Presidential Power" explains that the only real presidential power is the power to persuade the people, to be open, to go out to them and say this is the reason I believe this, this is the direction I believe the American people should go. If he doesn't do that and I don't think he can sell some of his programs. I think he has to become president of all the people and I think he's got to go to transparency and I think you'd be surprised. People who are willing to give him the benefit of the doubt, but you can't do this in back rooms surrounded entirely by political consultants.

HUFFINGTON: Can I give him some advice too? He should go back and listen to his speeches during the campaign because in Denver, he said the greatest risk we can take is to play the same game, surrounded by the people, and he's doing that. Surrounded by Larry Summers and Tim Geithner and the same people who basically were part of the ...


HUFFINGTON: Definitely Geithner should be out and ...

KRUGMAN: I don't think Tim Geithner is the problem. The problem is that Tim Geithner, going back to something earlier, he and the president are soul mates. They both have the view of essentially incrementalist tinkering of the edges and Obama needs to have a view that he's really going to take on. I think financial reform could be an issue where he can recapture some of the sense of being an outsider, some of the sense of running against business as usual. The Republicans will make that easy for him because they are going to be dead set against any kind of financial reform. They will vote not a single vote for any realistic curbs on Wall Street. But he has to find that fire in himself. It's not a question of replacing Tim Geithner, it's a question of replacing his own tendency to think well, you know, let's just stabilize things a little bit.

WALTERS: What about the freeze, the fear of freeze and the $20 billion in budget cuts? Is that going to work?

KRUGMAN: It's junk fiscal policy, it is junk economics. We all know that.


KRUGMAN: It's not all that important. It's 15 percent of the federal budget. It's -- the Center for American Progress, which is a think tank that is very closely tied to the administration, one week before the State of the Union had an article about how you can tell people who are phony deficit hawks, what they call deficit peacocks. And they advocate things like a freeze on non-defense discretionary spending...

HUFFINGTON: And they called him a deficit peacock.

KRUGMAN: And they called the president -- no, it's pure stunt making, and worse, it's a Republican talking point. It's a Republican...


KRUGMAN: ... policy.

HUFFINGTON: Actually, it's one point on which everybody agrees. I just came back from Davos, and everybody, including Niall Ferguson, who doesn't agree with Paul on anything, called it a joke. I mean, and talking about breeding cynicism -- it's these kind of measures that breed cynicism, that make people feel that politicians are just reading focus group tests and acting on them.

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