operate a certain zoo there. see what troubles many people. blue skies over florida, a shuttle launch coming up shortly. thanks for joining us, i'm tom foreman. fareed zakaria and "gps" starts right now. >> this is gps, the global public square. welcome to all of you in the united states and around the world i'm fareed zakaria. this week, we have an exclusive interview with the man in chart charge of the world's largest economy, secretary of treasury, timothy geithner. we will have a wide-ranging conversation and not a moment too soon, since the green shoots seem to have turned brown. the hopes for an economic recovery were dashed last week when new unemployment numbers came out, with job losses 100,000 worse than most had predicted. the stock market that had seemed to be predicting a turnaround has reversed course over the last few weeks. prices of oil and commodities have sunk on fears of a long recession. now, you can make too much of a few pieces of data here and there, but what strikes me most is that we are watching a grand

economic experiment and no one knows how it is going to turn out. there are three big questions that are being tested. the first, is the stimulus large enough to make a difference? you'll recall that on this program, distinguished experts like paul krugman and martin wolf made the case that america's stimulus is too small and too slow to have much impact on a $40 billion economy? if that tushes to out to be true, will washington spend more or will they conclude the whole stimulus idea was a failure? is that true? second, should the big banks have been forced to dispose of their bad assets? the obama administration has taken a middle course as regards the nation's biggest banks. it rescued them, but it didn't nationalize them or force them to sell their so-called toxic assets. was this the right strategy, or should these assets have been taken off their books so they could start lending? will the banks be seen to have failed?

and finally, is this recession different from all others, or at least all others since the 1930s? the gloomy case rests on the fact that this time, consumers entered the recession with massive debt burdens and are going to spend years working off their personal balance sheets. if that's the case, alas, there is very little washington or anyone else can do except wait. i will resolve these questions with tim geithner and a conversation with a man i don't think you know obama met in russia, the former deputy prime minister turned putin critic. >> corruption is not a problem in russia. corruption is a system. this is a system. >> let's get started.

and we are joined by the secretary of the treasury, timothy geithner. thank you, mr. secretary. good to see you. give us your sense of the state of the american economy. there is some good news. a couple days ago, there were jobless claims that were 100,000 worse than expected. what's going on? >> fareed, it is better, but we still face enormous challenges, and it's going to be a while before we're confident we're going to have any strong sustained recovery in place. but we have an economy falling at a remarkably rapid rate. we were losing jobs at 600,000, 700,000 a month. the rate of the declining economy has slowed dramatically and the rate of job loss has slowed significantly. those are encouraging signs we're seeing improvement in the financial markets, more confidence by consumers, and businesses both here and around the world, and that is due to the strength of the policies that this government, working with the congress and countries around the world, have put in place. the policies have been

successful in arresting the decline, providing a foundation for stability, but it's going to take us some time to get through this. >> but the administration forecast in february that unemployment would reach 8.1% this year. it's now 9.5%. so, obviously, things are worse than you thought? >> relative to what some people were concerned about and what was possible at that time, we've actually made quite a lot of progress in laying a foundation for repair. rescuing the situation was very dire and beginning to see the foundations of recovering. but again, it's very early. >> but why was your estimate in february wrong? what do you think you or the administration missed? >> we took a long time getting to this. we dug a big deep hole as a country. we went through a period where we were borrowing way too much. we had huge buildup of risk in the financial sector. housing, for instance, rised to remarkably high levels. there was no way through this. it was going to be enormously

difficult. the adjustment process was hard. it will take time to get through this. remember, only four weeks ago, people were saying we should be walking back stimulus, we should be cutting down, we should be getting to where we run the least risk. >> warren buffett, laura tyson, adviser to the president, said you have to do a second stimulus, because clearly, rising unemployment is a big concern. there is a possibility of further deflation. do we need a second stimulus? >> i think all the congress believe, and this was inherent in the program, that the biggest thrust or force would start to take effect in the second half of this year, start to see that happen, but i don't think that is a judgment we need to make now. can't really make that now prudently, responsibly. >> a lot of people feel that by recapitalizing the banks, but not doing more in sequestering the banks, you've created a kind of fear of

zombie banks that are stable but not really lending. i realize banks are only part of the credit picture, but is there a problem here? the banks are not lending enough. is the supply of credit enough or does it need to be ramped up? >> very good question. very important question. good question. again, i think relative to what we thought was likely, going back to january, the financial system is in substantially better shape than it was. both the banking system, which provides a substantial amount of credit, and the capital markets, the securities markets provide about half the credit or about a third of the credit to businesses and families, as we know the program we put in place was to make sure there was capital in banks where we needed capital, and yet we're starting to repair backstopped credit markets. i think on both fronts, things have improved considerably. the sort of basic tone of markets also feels a little better. it's just reflecting a little bit better confidence. >> but in september of 2008, you and hank paulson and ben bernanke basically told the

world that the big problem here is toxic assets on the balance sheets of banks. >> well, i was actually not secretary of treasury. >> you were the president of the new york fed. >> i was not the architect of that program. >> my question is, do you agree that if toxic assets were the problem, we haven't bought one toxic asset yet. in other words, the t.a.r.p. program has not yet bought any toxic assets. why? >> banks have been able to raise capital with greater ease than i think anybody reasonably expected. many banks are selling a bunch of bad assets and shrinking their balance sheets where they don't want to make a core business. but what it will do is help get those markets going again, because things in some ways have been better than people expected. you may see less use, less demand for those facilities than many people thought. but let's go back to the fall. what congress authorized back in the fall was absolutely essential. there is no doubt it helped

avert a catastrophic loss in our financial system. >> but it's fair to say the money was used for recapitalizing the banks, not buying the assets. in other words, a calculation was made a more effective way to reduce the leverage -- >> that was a decision made back in the fall by my predecessor. i think it was absolutely right, but we went a slightly different approach when we came in, broader framework of solutions, encompassing any -- all the sort of credible things we need to make sure the system comes back. remember, the capital has been raised by the financial system is raised by it from private investors by private investors. we have actually made very, very limited investments in the finance aal sector, capitals, since the administration came in, material investments made outside aig and the automobile industry, which are large problems we inherited, for a number of small banks. and, again, that is because the effect our to stress test had on improving confidence in

faltering banks, not only seen $80 billion come back into the treasury, but seen the largest banks in the country and go out and raise from private investors very substantial alps of capital. again, you should view this as a sign of i would say modestly encouraging sign, not a sign of concern. >> so the program you announced which is to buy toxic assets, to provide funding for the private sector to partner with you in buying them. warren buffett said he doesn't like it because it gives too much money to wall street. paul krugman, the nobel prize winner says you're bribing people to get into the market. is warren buffett right? >> i don't share those concerns, but we have to think about the relative alternatives. and the classic model that many people advocated would have resulted in a much greater subsidy of banks into wall street. the classic model is that the government itself goes to banks and says, we'll combine these assets from you at a price that the government picks up. and the risk in that context is the government takes much more

risk, giving much greater subsidy to banks and the much greater cost to the taxpayer that is the strategy we considered and did not adopt. that carries the risk of a much greater subsidy to banks and investors, and we considered but rejected that basic strategy. >> your growth statistics for 2010 is 0.8%. the imf came out with the forecast which is 0.8%. >> i haven't looked at the imf forecast. >> economists, i think it would be fair to say, a lot of economists believe it is likely to be more than 3.2% f that happens, my question to you, is the deficit as a percentage of gdp becomes much higher. are you willing to do whatever it takes to keep the deficit as a percentage of gdp within the range that the president suggested? >> it is very important for the

sustainability of recovery, for confidence, that this government will do what's necessary to bring these deficits down to a sustainable level as soon as we are confident we have a sustaineded recovery in place. the president is absolutely committed to that. he deeply understands how important that is. his economic team lived through a period where a remarkable period of fiscal disadvantage in the united states helped generate a long period of rising private investment, stronger dollar, lower interest rates, strong productivity growth, broad-based income, so he understands deeply the importance of making sure we put in place a stronger foundation for the recovery as a whole, and part of that will be a recurrent return to living within our means in the country. >> that will mean higher taxes? only two ways to grow -- >> as a country, and there is no mystery in this, we'll have to bring our resources and our

commitments closer into balance. and it's going to be a hard thing for us to do. it's within our capacity as a country to do. it is not beyond our capacity as a country to achieve, and you're right to say that affirming that commitment, keeping to it, is being poured into sustaining confidence. if we don't do that, it gets away from us, then the risk of recovery is arrested because of higher interest rates crowding out investment. can i say one more thing on this? some people don't understand that what will lead us out of this ultimately will be a judgment of businesses and consumers. it will be private investment and consumption coming back as confidence is restored. that's what's going to get us out of this. what we're trying to do is maybe provide a foundation for that to happen. >> we will be back with secretary of treasury, timothy geithner. >> the primary regulator of the big new york banks was the new york fed, which you were headingsome it fair to say that you should have regulated them more aggressively? the price on the tag is the price you pay.

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good choice. only meineke lets you choose the brake service that's right for you. and save 50% on pads and shoes. meineke. and we're back with secretary of treasury, timothy geithner. let me ask you about this, because i talked to a number of businessmen preparing for this conversation. and a lot of them said, can we tell geithner to stop beating up on business, tell obama to stop beating up on business? we feel like we're the villains, like we're being treat like criminals. congress does it and they don't stand up. the businessmen are heroes.

>> if you listen to what the president says, and i stay all the time, we deeply understand that the future strength of the economy depends on the work of the united states. the judges they make and their willingness to take risk again and put money at stake in the economy again. the president understands that. >> do you feel it fair to say that they've been battered unfairly? >> you're thinking about the financial system? let's talk about the financial system. again, the financial system has suffered a dramatic loss of trust and confidence largely because of the judgments many of the leaders of our institutions made in managing those institutions. the consequences of those choices were very damaging to people across the country to people who were very

responsible in their judgment and i think those firms will still have to do a lot to try to earn back the trust and confidence of not only those clients but family across the country. and i think it's important just to be direct about that. >> a lot of them would say there was also a dramatic failure of regulation, and the primary regulator of the big new york banks was the new york fed, which you were heading. is it fair to say you should have regulated them more aggressively. >> i'm glad you raised that, and i completely agree. i have said it many times. there were systematic failures in regulation supervision across our financial system. and i think the response of that is very broad-based, and i think it goes to everyone who was responsible, including the responsibility i had in that context. but again, look what happened to our financial system. the things that caused catastrophic damage was the build-up of risk largely outside the regulated banking system. just look at bear stearns, lehman brothers, aig, the high-end insurance companies.

look at the big banks like countrywide, regulated by the fed but found those restrictions too onerous and chose to adopt a strict charter. we should, as a country, have not allowed that to happen, and the core part of the reform is putting in place more conservative restraints, more effectively enforced across those core institutions that can threaten the stability system. so absolutely, and that's one reason we're moving so quickly to lay out what are very ambitious comprehensive reforms and the test of those reforms are going to be fought and resisted a across the financial system. >> one of the things you said in an interview with charlie rose was one of the causes of this crisis was loose money, that there's too much easy money and those interest rates were too

low. what do your regulatory reformists want to do about that? how do you get the chairman of the federal reserve to be willing to take the punchbowl away when the party has begun, to quote a famous fed chairman? >> that's the classic dilemma in governments here and around the world. again, you have this period here where you have this huge generation around the world, exceptionally high savings rate, and people are looking for where to put their money, and that investment helped big booming house prices, but you're right that the cause, as i said before, is much more complicated than risk management supervision and failure to analyze. and ultimately, of course, to have a more stable system less prone to crisis, you have to make sure that governments together don't make the mistake of those. >> the fed chairman, do you have any excellent ideas? >> i think we have a great fed chairman. i think what the fed did in this crisis, which is without present, subject to enormous

controversy, it's important for people to look back in time and evaluate those judgments, but i think the fed system was absolutely essential, but i think what the feds did was not only essential but extraordinarily helpful in helping to contain risk, helping to slow the mortgage crisis. it helped stave off another outcome. >> that sounds like a vote for the reappointment of ben bernanke? >> i think the chairman has done an exceptional job and i think he deserve a lot of confidence. >> the regulatory reform you have put in place, and this is the last question i'm going to ask about this. it still needs entities that are too big to fail. you look at the structure of american finance and you, in a way, might have created bigger moats around them that barren try, but you will still have very large financial organizations. >> very important question. you cannot design a system that you would cease having across

the system, you would have [ inaudible ] and you can't adopt a strategy in that context and hoping it will burn itself out. the risks are acute. if you just look at what happened when lehman failed, and lehman was not the cause of the crisis but a symptom of how severe it was, and it did make it substantially worse, you can see one of the consequences of allowing failure to happen on a scale that can cause catastrophic failures. the damage to confidence globally, we saw prices globally is a good cautionary note, about not just our ability to design a system that prevents failure but our capacity in extreme conditions of stress to basically hope the market will work these things out. so, we want to do -- we are going to do as much as we can to reduce the risk of a crisis of this magnitude but we need to make sure the government has better tools to manage and contain damage when it happens. >> when aig was bailed out, a

lot of money, tens of billions of dollars went directly from aig to a series of new york banks to pay what was call the counter parties. >> principally new york banks. it went to a number of banks in europe and around the world and also wrote a whole bunch of commitments to insurers, savings products of average americans, enormous number of financial commitments they made. the problem was they didn't have the capital to back up those. >> why did those contracts have to be paid what the is called 100 cents on the dollar, which is why did you not engineer a discount, which is often what happens in these circumstances and the feeling is to complete the thought at a a number of the banks, real banks that had very close ties with the united states government, banks like goldman sachs? >> very important question. the best way to explain it is to go back what i said earlier, the

united states came into this crisis without the tools and authority to manage the orderly [ inaudible ] they did not have that authority. so we were very limited in the choices we were able to make. >> you couldn't go in and say -- >> they were contractual commitments, and there was no way for the firm not to honor those committments without risking default. default would have led to exactly what you saw in the wake of lehman. and that outcome was important to avoid, and fortunately, for us as a country, we had the ability to avert that outcome in aig, but we did not have it in the context of lehman. that's why it's important so early to try to convince congress to give us more flexibility, better choices to manage those kinds of risks in the future. but again, there is no way to do

what your questioner's advise in that context without default and precipitating exactly the kind of damage you saw in the whole fabric of the financial system you saw here and around the world in the wake of lehman. but with better resolution authority, we would have had a little more flexibility and better choices. maybe we would see a better outcome. >> we will be back with the secretary of treasury, timothy geithner. >> you've been through one of the most turbulent periods of financial history at this point. some lunch. you hungry? yeah. me too. (door crashes in) (broadview alarm) (gasp and scream) go! go! go! go! go! go! (phone rings) hello? this is mark with broadview security. is everything okay? no. someone just tried to break in. i'm sending help right now. thank you. (announcer) brink's home security is now broadview security. call now to install the standard system for just $99.

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we're back with secretary of the treasury, timothy geithner. mr. secretary, you're off on a trip and you're going to europe and other places. i have a quote here from europe central bank. and he said i have one message. it is extremely important that the united states say that a strong dollar is in the interests of the united states. >> it is my pleasure to say it. a strong dollar is in the interest of the united states. of course, i deeply believe that and my commitment is that the world and the american people make sure that we are putting in place the poll says that can sustain confidence in this economy and this financial system. >> you don't worry that the dollar is going to weaken as a

result of the currency of the world as the chinese talk about -- wondering if there are some alternatives, as the russians talk about it? the arrows seem to be pointing in that direction. >> i actually don't worry about that. because look at the responses in the world they go through at this time. when people are most concerned about risk, generally they want to be invested in the most liquid, safest market in the world, which is still the market for our treasury bills. i think you see that consistently over a period of time, and we want to make sure we can sustain that basic response. >> you talked about the global imbalance of the problem, or at least part of the backdrop of it. part of the solution has got to be that we spend less, we consume less, as we said. but also that the chinese principally save less. let's just say that the policies of the chinese government that make it difficult for the chinese consumers to consume more are also changed. have you made any headway in getting the chinese to stimulate

domestic private consumption, not the government spending money but the private chinese consumer? >> a critical part of an effective strategy of the world is going to make sure in those countries like china but not just china that they are shifting the sources of future growth to domestic demand, to domestic consumption. i think you will hear the chinese say they believe in that. in the core of the parliamentary discussion, there are those of us who can place a common framework, we raise our [ inaudible ] in the united states, it's already happening on significant scales, that the world as a whole adjusts to that new reality and puts us on a path where you'll see stronger domestic growth in those countries. i think if you listen carefully to what the chinese say, i think they believe in that imperative.

if you look at the content of the policies they are committed to, in terms of strengthening the economy, dealing with governments they normally ensure. -- governments normally insure against. [ inaudible ] if i listen to what they say about the future of the monetary policy, exchange rate policy, i think you see a basic recognition of this imperative. i actually encourage -- >> they haven't done anything yet? >> no i think actually -- china, just think back over 30 years. i think china, relative to almost any other country in the world, has done an exceptional job of setting out a basic strategy and delivering on that strategy. if you're going to look at the basic thrust of strategy in china, there is a lot to be encouraged by, and they have a good record of delivering that. they're doing things that cut against that a little bit now.

we're under enormous pressure to do more things that cut against that. i think the big thrust of policy and the big arc of policy in china will recognize that imperative and we're going to try to use that with them to put that in place. i guess they're watching and wants to be confident that we have the capacity to work together, and i'm actually very encouraged. what we have achieved, what we see so far. >> you've been through one of the most turbulent periods in american financial economic history at this point. >> not through it yet. >> at this point. what is the principal lesson you have learned? >> you know, i think, again, i believe that the strategy the president has laid out took the best of experience around the world in dealing with the financial crisis and made a basic strategic judgment that the risks would be greater to the world and to america if we had been more tentative. i think the strategy we put in place validates the basic

judgment that in a crisis of this severity, you have to be very address city of put in strong measures to support private investment and get employment growth back and tough make sure you get the financial system stable and working again. because without that, you court grand disaster. so i think that lesson, which the world has learned piecemeal over time, is a lesson [ inaudible ] it is going to take us a while to get through this and going to have periods where progress is uneven. it is i think, very important to be realistic with people so, it understand a while to get into this. >> timothy geithner, pleasure to have you on. >> thanks.

. hello, i'm don lemon live at cnn headquarters in atlanta. i want to give you your headlines now. two u.s. marines died in afghanistan's hell mand province this weekend a third u.s. service member died from wounds he suffered in afghanistan last month, bringing the total of united states deaths in afghanistan to 647 with 104 of those deaths coming just this year. last week, eight british troops died over a four-year period. the u.s. ambassador to iraq, christopher hill, escaped unharmed from a roadside bomb that targeted convoys south of baghdad today. none of the embassy personnel were hurt and churches were bombed this weekend, four people killed 3, 2 wounded. less than two hours and boy still counting down, the space shuttle "endeavour" is fueled up and ready for liftoff. yesterday's launch was delayed while nasa checked for damage after a receiver lightning

storm. none was found new york damage, but "endeavour's" 16-day mission to install the final piece of japan's science lab named "kibo," japanese for hope. when the seven shuttle astronauts get to the international space station it will be a full house. there are already six residents at the observatory. it will be the biggest crowd ever in orbit. big crowd in orbit. grieving and angry families are joining jesse jackson today outside the locked gates of that chicago cemetery where four former workers are accused of reselling and reusing burial plots. the cook county sheriff's office says figuring out how many graves are disturbed is very difficult because hundreds, maybe thousands, were unmarked. one official says there are not even maps for some sections of the 150-acre african-american landmark, including an area specifically for babies. a florida couple's extensive surveillance system may yield vital clues after their killing. police in pensacola are

questioning two persons of interest and searching for a third. and just into cnn, this is just in, a police spokesman say they have made an arrest in connection with the killing. three suspects were recorded entering the house of byrd and melanie billings before it they were killed on thursday. police have seized a red van that may be linked to the crime. the billings are known for their large family of adopted special needs kids. they were killed as their children slept. the wife of former world boxing champion arturo gatty is facing tough questions in brazil. his body was found in a hotel room yesterday there were strangulation marks on his neck. police recovered blood-stained purse strap. while gatty was born in italy, he was based in jersey. he was best known for his trilogy of flights against irish boxer mickey ward. police questioned the wife after inconsistencies in his story. a lot of news here today on cnn. i'm don lemon. see you at the top of the hour.

now, fareed zakaria, "gps" after this. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models. it's fidelity's guidance -- it shows you ways to spend in retirement that can help your money last, whatever your plans. like, if we wanted to travel? husband: or start a business? advisor: yep. wife: or take some classes? sure. or find the best cheeseburger? the line isn't for everything. whatever your destination, fidelity has the people, guidance and investments to help you find your way.

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hilary clinton meeting with the former president of honduras, manuel zelaya. he was overthrown by the honduran military. the had president obama came out on tuesday in favor of the restoration of the democratically elected president of honduras. let me register a modest dissent. while zelaya is indeed the democratically elected lead of the nation what he was trying to do was decidedly undemocratic. you see, the timing of the coup wasn't random. it was to stop a rev den rum zelaya called for the next day, an illegal referendum that would have trashed one of the eight unalterable pillars of the honduran constitution. the zelaya was trying to abolish term limits to allow himself to stay in office indefinitely. the nation's supreme court and attorney general declare zelaya's actions unconstitutional.

congress had began impeachment proceedings. he was arrested on orders of the supreme court. zelaya is a radical who declared him safe socialist in 2007 and has been destroying his country's prospects of growth. hugo chavez is one of his closest political allies and his role model. indeed, zelaya probably got the idea for the referendum from chavez, who did the same thing in his country as did raphael korea of ecuador and morales of bolivia. the difference is all succeeded. so while we should support democracy and we should be against political change by military coup, we should also be opposed to unconstitutional power grabs by radical demagogs. we will be right back. >> everybody knows the question, who is mr. putin. everybody knows putin is against the west and putin is against the united states. that's why to establish new relationship and to repair our relationship with putin is

absolutely impossible.

>> you probably saw president obama this wheat meeting with vladimir putin and medvedev. but obama had another meeting with a man you didn't see. some journalists were afraid to cover t that man is that man is boris nemsov. formerly deputy prime minister of russia, now firmly in the

opposition. welcome, boris. >> thank you very much for the introduction it is a pleasure to be with you today. >> boris, do you think president obama had a successful trip to moscow? >> obama is not a god. he is a great president, but he is not a god. he did everything he can, and i think that he achieved in different way some results to show that he believes in democratic, strong and powerful russia, and he talked to all of them everywhere, a russian economic school, for example, where he might meet with the opposition. the only thing to do is forget about corruption, forget about the style. for get about free election. what is very important is russian putin tv didn't show his

speech. >> this is the speech he gave to the economic school in moscow? it was not government run live on television? >> exactly. there were no channels in my country, no channels showed very important obama speech when he talked about the american neighbor fight russia is the second world war, in the first world war, even a war against terror, russian and the u.s. were together. but no putin channel showed that. >> why do you think that is? >> no putin channel showed -- they shall' they're afraid. they're weak. they are afraid of the official opinions of the kremlin. >> and your feeling is that putin had been building up a certain kind of anti-mannerism and this would conflict with that program? >> yeah, what is funny -- what is really funny for me, for these three days where obama and his wife went to moscow,

putin stopped anti-american machine, putin stopped anti-american propaganda at all. anti-american machine, putin stopped anti-american propaganda. the guys disappeared. yesterday i said mr. president you stay in our country for a long time i think tension between america will disappear. but anyway, he stopped anti-american propaganda, on the other hand, he doesn't want to show -- putin doesn't want to show what his real american positions concerning human rights, concerning rule of law, concerning democracy. >> let me ask you, boris, you met with -- boris, you met with george w. bush. how was obama's position different? >> that's a huge difference. bush really came to russia and

he was like a big teacher, right, who explain how important is democracy, how important is political competition, how important it is to be open and how important is freedom of speech, right? we sit down in the american embassy, in the end we shake hands. obama, he mainly listened to us. he just made final remarks. but he wanted to recognize what is russian people mean. and he listened mainly. >> let me ask you about the real russia. you have an article in which you point out, to me, stunning

statistics, russia has dropped to 147th in the world in transparency indexes, corruption listings. so one of the things we used to often hear is putin and his regime had been successful and popular in russia because they brought order and prosperity. are people now feeling this is a regime that is highly corrupt? what is the view of, you know, what is the average russian's experience today? >> well, first point, putin was popular because of very expensive foil. real incomes of ordinary russian people increased 10% and unemployment rate was less than 3%, 4%. that is why russian people are very happy. >> and that is because of -- >> yeah. high oil prices, commodity prices, gas prices, for example,

right? that's why people didn't care about corruption, some underground things inside kremlin, et cetera. corruption is not a problem in russia. corruption is a system. this is a system. we are in 147th place but not because russian people want to take bribes because of putinism, because of the system. step by step, this topic, step by step, will be in the focus of public opinion. >> boris, you asked one of the things president obama seemed to do at least to me was to really try to make a distinction between putin and medvedev. he said medvedev seems to be a modern world, putin has one foot in the old world, one in the new. he had breakfast with putin.

he chose to have a private dinner instead. is making the distinction between medvedev and putin, was that a smart move for obama to do? >> i think he did a great job as far as such distinctions is concerned. why? he always mentioned that america and the president of the united states based on rule of law, right, obama shows he wants to talk with guy who is responsible because of law. everybody knows that putin is against the west and putin is against the united states. that is why to establish new relationship and to repair our relationship with putin it is absolutely impossible. you know. it is absolutely impossible. to repeat the same failure like george w. bush did, i don't think this is smart politics. that is why wanted to try just

wanted to try to establish relationship with mr. medvedev. you are right. on the other hand he is younger, he has no experience in kgb and he has experience in business, which is great news. this is a window of opportunity and i think that to use such opportunity will be quite smart position. >> thank you so much boris nemtsov from moscow. >> thank you. >> we'll be right back. ♪

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now for our question of the week. last week i asked you if you approve of the moves treasury secretary geithner made. the answer from gps viewers, i'm afraid is a resounding, no, he is not doing better. viewers are critical of secretary geithner, many believing he should be replaced.

my question for this week, a question i raised at the top of the show. is the u.s. stimulus large enough? do you think it will eventually work or do you think we need a second sim lus as many on capitol hill and many economists are suggesting? let me know. as always, i would like to recommend a book. it is called "the geopolitics of emotion, how fear, humiliation and hope are reshaping the world by dominique moisi. moisi, a frequent guest on this program says those three human emotions are key factors in the world's political conflicts. asia is full of hope the muslim world beset by humiliation and the west is ruled by fear. what the title doesn't do is give you an idea how good if book is. fascinating. really worth reading. follow us on twitter and facebook. go to