'This Week' Transcript: Tax Deal

AMANPOUR: He did say elections have consequences, and he's basically said that again, as -- as he's been pushing this through.


DOWD: But, Christiane -- but, Christiane, the thing about -- everybody keeps trying to compare this to Bill Clinton in 1994 and the aftermath of the election. The huge difference between that is the economy was growing, was doing well.

What he made -- Bill Clinton had made bad management decisions in the two years that he had run up, a series of things, Travelgate, "don't ask/don't tell," a bunch of things that he could then adjust and make different decisions.

Barack Obama is in an economy that's only worsened since he's been president of the United States. He can only solve his problems management-wise if the economy improves. If the economy doesn't improve, he can have a thousand meetings with Republicans...


AMANPOUR: ... presumably an attempt to make the economy improve and...


KRUGMAN: It's a very modest attempt. And, again, the timing thing -- you really have to think that the timing thing is -- is critical. Something that makes the economy improve for a while and then gives up the gains, which is kind of what's in there...

ROBERTS: But, Paul, it doesn't mean this is the last act, you know.

KRUGMAN: Oh, it does, because he'll be...


ROBERTS: ... keep acting throughout the next year.

KRUGMAN: No, he'll be right over the barrel again...

AMANPOUR: You heard what -- what David Axelrod said, that, no, this is temporary, it's not going to be permanent. Do you believe that?

KRUGMAN: No. I mean, it's...

AMANPOUR: Do you believe it?

ROBERTS: It depends.

KRUGMAN: I mean, they swore up and down they weren't going to do what they did just now. I mean, it's...

ROBERTS: Congress -- you know, Congress works its will, which is the way it's supposed to work, and -- and they'll decide, when we get to -- the time comes.

KRUGMAN: And let me just say, all of this stuff -- I mean, I talk to the, you know, guys who do number-crunching on elections, all of this stuff about triangulating, moving to the center (inaudible) they say none of it matters. What matters is the economy, and specifically what matters is how fast the economy is growing in the six to nine months before the election. That's really all that matters. I don't think...


AMANPOUR: So you're the economist. How fast do you think the economy is going to grow?

KRUGMAN: I think it's going to do OK. It's going to do something like 3.5 percent, 4 percent over the next year, which will bring unemployment down some, and then it will stall.

AMANPOUR: Some? How much?

KRUGMAN: What? Oh, it brings us down by a half a point, one point. We're still talking about insanely high unemployment, and it will still be insanely high in 2012.

DOWD: And that's the reality check I think we have to have here, is because in order for that to really improve, if -- if -- if Barack Obama added 2 million jobs in the next 18 months, he loses re-election, because basically the unemployment...


DOWD: ... rate has not adjusted. If he adds 2 million jobs in the next 18 months, he has to add 3 million or 4 million or 5 million jobs in the next 18 months...


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