'This Week' Transcript: Tony Blair


And what's going to happen is that this is going to bring some improvement, but then it's going to fade out in the middle of 2010. And instead of saying, well, we need more, the public is going to say, "Well, that didn't work." And so you're going to lose all of your ability to move forward.

They haven't helped by pretending up until just about a month ago that it was all working, that it was all on track. And so he's in a very difficult position. He really needs to somehow stake out a position saying, look, there are things we can do. Those other guys, the other party, are standing in the way of it. I don't have any faith he's going to do that.

JORDAN: I think they did oversell their position about how quickly things would get better. So he's got to go in there and say, look, we're on a path, and we are going to get better. And remember, folks, that 1982, when Reagan just started out, it was exactly the same point. He was two years into his term. The unemployment was well over 10 percent, and it did come out of it.

So, I mean, this was a big crisis. And it's going to take time.

FRIEDMAN: Clearly, you know, Christiane, there are these immediate issues of stimulus, tax cut, what do we do to get more people working? But there's also some huge structural ones.

You know, we are at a moment -- excuse me -- of two inflection points, one where globalization has never been more intense, walls coming down, economies integrated, and at the same time, technology rapidly churning old jobs and creating new jobs at the same time faster than ever.

So you're at a moment where you need more education than ever to get those good jobs and more people around the world can compete for those good jobs. And, you know, certainly what Paul and George have said, we need more stimulus, whatever mechanism we do.

But we have a structural problem here that I think the president is also going to have to address and face.

KRUGMAN: Yes, I just -- can I say, we are fully into the trap. Whenever you have a severe recession, people start saying, "Well, this is structural. It's going to be a long time. You can't cure it." What we need is more demand.

I've been -- I've been looking at polling (inaudible) from 1938. This actually kind of resembles 1938, when -- when FDR cut back too soon, and the economy went back to recession. People were deeply pessimistic. They said it's never going to recover, it's going to last for a decade or more, that, you know, just more demand won't do it, budget deficits are -- we need to cut that budget deficit.

Then we were, in a way, very fortunate. The war came along and took off all the restraints and we had a recovery and it was not structural. We just didn't have enough demand.

AMANPOUR: Let me ask you sort of the atmospherics, which actually possibly go to the heart of the matter, as well. You talked about what was going on during Ronald Reagan's time at a similar point in his presidency, but at that time -- and people are writing about -- writing about now, they point to Ronald Reagan using his presence, boosting the optimism of the American people, talking about American exceptionalism, and getting the economy back.

Is there sort of a disconnect between what the president has done and how he's sort of affecting the mood of the people?

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