and that's it for "360." thanks for watching. >> larry: tonight -- midterm bloodbath. president obama admits it's a shellacking. he calls it humbling. what's next? >> i've been willing to compromise in the past. i've going to be willing to compromise going forward. >> larry: now that republicans will control the house, how will the government go forward? or will it be mired in gridlock? it's all next on "larry king live."

>> larry: ah, democracy in action. a lot has changed in the past 24 hours. we've got an outstanding panel for most of the program tonight. let's begin with our own john king, the host of "john king usa," cnn's chief national correspondent. he's at the cnn matrix with more. anything shock you last night, john? >> well, larry, you just said, a lot has changed. boy, is that an understatement. when i stood here last night, before polls closed, these were the 100 most competitive house races. 91 of them, 91 of them were blue last night. held by democrats. the flashing red means picked up by a republican. larry, the geographic and the generational scope of the republican victory was stunning. you had democrats who had been in office more than 20 years losing their seats. so many big things happens. here's one of the things that really concerns the democrats. patrick murphy, an iraq war veteran. defeated by former congressman mike fitzpatrick. why are democrats worried it that?

not just because patrick murphy lost. independent voters in the suburbs are a huge swing vote in america. they swung the republican way last night. that's one thing they worry about. the republican party has struggled in the northeast lately. yet, they picked up two seats in new hampshire last night. a bunch of seats here in new york state. look at this one in new hampshire. charlie bass, a former republican congressman. even republicans in new hampshire say ann custard ran a perfect campaign and yet the republican wins, larry, in a district, look at this, 56% of the vote for barack obama just two years ago. that republicans are picking up districts like that means what? it means they're getting independent voters. it means they've got a higher senior vote than before. more women voters than before. blue collar workers defecting from the obama coalition. a fickle electorate. we saw change in 2006. change in 2008. change again. the challenge now, larry, can the republicans keep this new coalition? but this is stunning. >> larry: john, is the only democratic spin nevada?

>> the democratic spin is nevada. let me walk over to the map as you say that. there's no question democrats are thrilled harry reid kept his seat. no question at all. he will continue as the democratic majority leader. they did keep their senate majority. you want to call it spin? they say the numbers don't lie. neither do the colors. this is how we began the night in the house of representatives. those blue places you see, those are democratic house districts. here's where we ended the night. look at that difference in red. then and now. that's from the house perspective. you mentioned harry reid. let's go over to the senate races. here's how we began the night. this is reid's seat in nevada. will stay blue. the democrats are happy about that. but watch the rest of the country. that's where we ended the night. across here in the midwest, the heartland of america, high unemployment, rust belt, union voters who were supposed to be for the democrats, larry. that is so troubling for the democratic party. governor's races. this has been blue.

the industrial midwest. look at all those blue democratic governors. that's how we began the night. larry, that's what we get in january. a whole new class of republican governors in critical presidential battleground states. they held florida as well, the republicans did. now have iowa. terry bran stet is about to become the most popular among 2012 republican presidential contenders. >> john king. i'm reminded of ralph landon defeated. he said he felt like a man whose house had been blown away by a hurricane and just laughed. that's the totality of it. joining us now, ben stein, the economist, former presidential speechwriter. columnist for "fortune" magazine. contributor "cbs sunday morning." in new york, stephen a. smith, nationally syndicated radio host. columnist with the "philadelphia inquirer." nicole wallace served as senior adviser for the mccain/palin campaign. former communications chief for

president george w. bush. her new book is "a teen acres." arianna huffington, in middleton, connecticut, the co-founder and editor in chief of the huffington post. her latest book is "third world america," how our politicians are abandoning the middle class and betraying the american dream. it's a best-seller. there you see its cover. we'll start with ben stein. can we quote james carville? it's the economy, stupid? >> well, it is the economy partly. partly that. it's partly just general dissatisfaction. look, we've got a long-lasting reception. we have two wars that don't seem to be going well at all. we have a health care debate in which the president blatantly went against what the people wanted. last night was an incredibly heartening night. a few guys with hand-made signs started a movement that took control of the house of representatives. that's an incredible sign of how young and how healthy and how vibrant our democracy is. these guys don't have all the

answers by any means. this is a vibrant young democracy. it's a great night. >> larry: nicole, the next two years going to be negative, positive or status quo? >> well, i don't think they're going to be status quo. i think as ben's saying, there's a big new player on the field and that's this tea party movement. i think if nothing else, they would agree, they're fun to watch. part of what makes them fun to watch is that they're not part of the establishment of either party. they are not jaded, i think, by the notion that certain things can't work. you dream big and then you get to washington and a lot of politicians have those aspirations reined in and that's part of what the general public loathes about washington. people tell you why you can't. and all that the american people wanted their leaders to do over the last two years was work on this economy. i think last night was about the politicians in washington not listening. and republicans should heed that lesson. the only mandate to take away from last night for republicans is that if you don't listen, you don't stay in office.

>> larry: stephen, let me play a little clip from what president obama had to say today and then get you to comment. here's the president. >> what yesterday also told us is that no one party will be able to dictate where we go from here. that we must find common ground in order to set -- in order to make progress on some uncommonly difficult challenges. i told john boehner and mitch mcconnell last night, i am very eager to sit down with members of both parties and figure out how we can move forward together. >> larry: stephen, bill clinton did it in '94. can obama do it in 2010? >> absolutely think that he can. i think quite honestly the only hope that he had of possibly winning re-election in 2012 is if what happened last night happened. the reality of the situation is that america is proven, once

again, you don't like a one-party system. because people don't know how to act when you're in a one-party system. when you have control of the senate and the presidency. all of a sudden you start feeling yourself a little bit too much. because you're basically in -- addicted to power. and absolute power corrupts absolutely. that's what happened in this particular situation. you heard the president there talking about how everybody needed to work together. and the american people have spoken. well, i'm sorry, excuse me, but it took you this long to figure this out? it took you two years? where at least 60 seats are lost in the house? that's utterly ridiculous. this is something that history has shown will happen repeatedly. the american people do not like when you get into power and you forget their interests and you get caught up in what your interests are. that's what the democratic party did. that's why they were bounced out of there unceremoniously, i might add.

>> larry: arianna huffington, do you agree? >> well, i agree that the democrats and especially the white house did not listen to the american people. that they underestimated dramatically the degree of economic devastation. you know, larry, when you have 27 million americans either unemployed or underemployed that means that 1 in 6 americans is basically suffering. that means everybody's affected. even those who still have their jobs or still have their homes know somebody, a relative, who's been profoundly affected. yet you had the president's economic team and the president himself constantly talking about how we've turned the corner, the reception is over, we're in recovery. and people were not feeling that. people don't feel that the recession is over. today, at least the president acknowledged we're still in the ditch. incidentally, he needs to retire all those car metaphors. first, we're out of the ditch. then we're in the ditch. the bottom line is the priority that he's claimed, you know, the jobs were going to be jobs, never really became a priority. the sense of urgency that brought all the establishments together when it came to wall

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we're back with our panel. ben, something unusual in all the races that i followed. you didn't hear afghanistan mentioned. >> it's amazing you say that. i didn't hear one candidate say anything about the wars in iraq or afghanistan. >> larry: why not? >> nothing praising our soldiers. nothing praising their families. not one word about it. i don't understand it. it's reprehensible that they didn't even mention it. we're fighting wars and people are dying. i was just in walter reed less than a week ago visiting men

whose legs have been blown often with the last couple of weeks. and these guys can't even mention that? that's amazing. >> larry: nicole wallace, by the way, nicole's books "18 acres" is a "new york times" best-seller. what do you make of that, nicole, foreign policy, if we can call it that, never mentioned? >> it's pretty stunning. you look back on the presidential race. i spent a long time trying to forget. you can't really underestimate how little the american public wants to talk about these two wars. and the reason candidates don't talk about them is because they're not popular. it's the same reason that, you know, a lot of tv stations and news programs don't talk about them. the wars are not good for ratings. i mean, people just don't like to talk about what ben just said. there are men and women there, sons and daughters, fighting for their country. fighting and dying. it's stunning. we're at a point in these wars where it's not a point of debate. and where it's barely covered. >> you know, larry --

>> larry: the economy's bad, stephen, but people aren't dying. they're dieing in afghanistan. >> that is true but the reality is this sounds incredibly wrong and i know that and you certainly don't want to accuse any american citizen of being insensitive or laissez-faire about the american soldier. but when you are struggling to make ends meet. when you are struggling to find a job. you're not thinking about those soldiers overseas. that's just the reality of the situation. it's not a very popular thing to say. it's flat-out wrong. you know that. but at the same time, when you walk throughout the streets of america, when people are -- you look at what they're going through, the trials and tribulations, trying to find a way to feet d their children. you know what, people tend to be a bit selfish. they don't really think about what's going on in afghanistan. that's the reality. it's unpopular but it's real and it's true. >> larry: arianna, is it puzzling to you? >> well, it is puzzling but at the same time, larry, the truth is that the president, the

democrats and the republicans did not want to talk about afghanistan because they cannot defend as being in afghanistan. they cannot tell us why we're in afghanistan. we know there are fewer than 100 al qaeda operatives there. what are we doing there? while our own nation is crumbling? we're spending $2.8 billion a week in afghanistan. propping up a corrupt regime. with no end in sight. despite all these fake dates that we're being told -- >> larry: so, why wasn't it debated? >> well, it wasn't debated because as the other panelists have said we have over 60% of americans who don't believe we should be in afghanistan. and yet there is a kind of consensus in washington that somehow we need to stay there. there is also beyond left and right consensus outside washington among people who believe we have no place there.

it's another example of perverted priorities. you know -- >> larry: why didn't somebody run for congress, ben -- hold it arianna. we get the point. why didn't someone running -- run against the war? >> i think stephen nailed it exactly. people just don't want to talk about it period. they don't want to talk about it to criticize it. nobody wants to talk about it at all. it's just like bringing up somebody's bad breath. i mean, it's a horrible thing to bring up. depresses everybody. and doesn't win you any votes. i think it's wrong. if i may say so, there are a number of us who talk about the brave soldiers and their sacrifices all the time. it seems to be that is a moral necessary. i agree, steve totally nailed it. >> larry: we'll talk about the new speaker of the house and other things when we come back.

>> larry: the expected new speaker of the house, john boehner, will have to deal with a strong tea party element inside his own party. the influence, what about it? here's what he had to say about that today. >> what unites us as republicans will be the agenda of the american people. and if we're listening to the american people, i don't see any problems incorporating members of the tea party along with our party and the quest that's

really the same, they want us to cut spending and focus on create be jobs in america. >> larry: nicolle, did you see a happy balance there? >> i don't know if it's happy. what unites the republican party is president obama. and i think when you lack at the fact that women have, for the first time in decades, swung over to the republican side in numbers we haven't seen since the early '80s, it has more to do with, i think, an ideological overreach that the obama white house has mistakenly made in thinking that the public is comfortable with or could accept a greater role for the federal government in american life. so i think it goes beyond just uniting around a policy agenda and finding specific policies where we can work with the white house. i think that will happen because it has to happen or everybody's going to get thrown out in two years. but i think what unites the republican party shows no signs of dissipating when this new congress comes in. i think we'll have some fun looking at the culture clash

between the outsiders and the establishment republicans. but an ideological level, i don't think the republican party has been this united in a while. >> larry: so, stephen, what happens now? >> well, first of all, i want to say what got voted out last night was an ideology, not a political party. they felt too much government. and people don't trust the government. that's the reality of the situation. when you listen to representative boehner talk last night, he talks about the tea party, he has no choice but to say that. simply because the tea party can hurt the republican party. if they believe that the republicans that are now in office, those 60 seats that they gained last night, don't represent themselves as republicans, republicans in name only, per se, and they don't really step up and do the things that the tea party folks think they should be doing, that they could hurt them, because you got to remember, there's a larger voter turnout during presidential elections than

occurs during midterm elections. the people that didn't show up to the polls last night, you had best believe will show up in 2012. and the republicans know that. and they're going to have to capitulate to some degree with the tea partiers but they can't let them be front and center the way they were this time around because that won't work in 2012. >> larry: arianna, you agree? >> you know, i don't think that this is about an ideolodge cam overreach. if the tea party was responding to. i think it was an underreach. in the sense there was no results produced. that people wanted jobs. they wanted to be able to stand the foreclosure epidemic. they wanted to be able -- for their kids to graduate from college and get jobs. it was as simple as that. it wasn't about ideology. what happened is the administration between the top, which is $800 billion and the stimulus which is about $800 billion. you would have thought this were massive big government problems that would produce results and they didn't.

not because of big government. but because the top was only about wall street. and the stimulus package included $300 billion in tax cuts. and a lot of projects that were not really bold enough and big enough to produce jobs. >> but that is ideology, if i may, larry. >> thank you. >> that is an ideological difference that is more stark than in history. the republican party fundamentally disagrees that the republican party can have that role. >> but the t.a.r.p. was under president bush. and john mccain voted for. >> t.a.r.p. wasn't -- >> larry: one at a time. ben. >> t.a.r.p. was a republican idea. it worked incredibly well. t.a.r.p. was a huge success. in stemming the collapse of america's financial system. so maybe the stimulus didn't work that well but t.a.r.p. was a colossal success. >> but this t.a.r.p. was not really extended to the real economy.

it helped prevent the financial collapse but it did not help revise main street. >> ladies and gentlemen, what we're -- >> -- financial collapse, main street would have gone down too. >> larry: we'll get a break. let me tell you about a very important phone call i made. when i got my medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses.

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>> larry: the president said today he thought the economy was a big factor in what happened with the voters. no kidding. watch. >> i think that there is no doubt that people's number one concern is the economy. and what they were expressing great frustration about is the fact we haven't made enough progress on the economy. we've stabilized the economy. we've got job growth in the private sectors. but people all across america aren't feeling that progress. they don't see it. and they understand that i'm the president of the united states. and that my core responsibility is making sure we've got an economy that's growing. >> larry: stephen, to quote a

sports vernacular, did he buy the wrong team in going with health care? >> absolutely. without question. i think that's the important point that needs to be made. it would be one thing if you walked into office and there was no economic recession taking place. when you walk into office and that is a problem, when you continuously repeat over and over and over again throughout your first two years in office that's it's been a problem. and you remind the world that you inherited this problem. yet you're pushing a different agenda, which was universal health care. which by the way could cost anywhere from $1 trillion to $2 trillion to $4 trillion depending on who you believe or what truth is being told. the reality is, he either seemed tone deaf or completely detached to the dilemmas affecting the american people. america is about working. they're about jobs. i said it to you last week on

your show and it's worth repeating. if you go to somebody and you say, here's universal health care but i don't have a job for you but you go to them and say, here's a job, i don't know about universal health care, they're going to pick the job ten times out of ten because people are more comfortable and more sane with money in their pocket and in their wallet as opposed to just getting free health care at the nearest hospital. that is just reality. >> larry: all right. arianna, how could the president not see that? >> we can have a consensus. i think everybody on this panel would agree that pushing health care ahead of jobs was -- >> didn't work. >> was a very serious mistake. it's beyond it didn't work. it wasn't, as steve said that everybody would have chosen a job over health care. it was untop of it that he basically told people, you know what, you don't have a job, but in 2014, you will have health care. it wasn't even an immediate benefit except for a few benefits like keeping your children on your health care policy up to the age of 26, which was ushered in

immediately. that is a fundamental disconnect. because especially when you're facing foreclosure or a loss of jobs, your horizon is incredibly shorter. it's about what's happening immediately. not what's going to happen in 2014. >> what if your mother has cancer? >> i think stephen has nailed it. people are concerned about work. it's money in your pocket. it's also a sense of fulfillment, having a place to go each day. feel as if you're a constructive member of society. and the fact that you are not -- if you yourself are employed, or your own business is doing okay, but your best friend's lost his business or lost his job, you're still going to be darn worried. i'd like to bring up, though, another little bit of a problem, which is -- i don't know what the republicans are going to do to create jobs. i don't know if mr. boehner or

mr. obama get along perfectly and they love each other, i'm not quite sure what they're going to do to create jobs. >> larry: nicolle, what's the plan? >> i think republicans will talk a whole lot about putting small businesses at the table. i think small businesses have felt not only have they not been at the table over the last two years but they haven't felt like there's anyone in the white house who even pleads their case behind closed doors. i think a business-friendly agenda is certainly something the republicans have a track record of advancing or advocating in the past. at the state level -- the states are the laboratories for all the good ideas. i think it's high time everyone in washington head out of the beltway and go to the states that have done innovative things. there's a lot you can do with the tax structure. a lot you can do with payroll tax relief. no one's ever mistaken me for an economist but there are places where governors are doing things that can work. i want to say something quickly about the health care debate. it wasn't just that it was the

wrong thing. it was that it was done with blinders on. it's not like the white house found out this morning that the public was not so into their health care policy. every day, americans jumped up and down with their hair on fire during that debate. and no one in the white house ever seemed capable of adjusting or being nimble at all. >> hey, larry. >> larry: stephen. >> let's break it down. flatter the american people. flatter the business community. it's very, very simple, larry. all you have to do is sit there and say, we're going to extend the bush tax cuts for a few more years. and at that same time that you're doing that, you're also eliminating and eradicating any excuse for the business community to say that they can't go out there and start hiring people. because, remember, perception is just as significant as reality. if people are sitting back and they're saying, this guy is going to tax us to death, that's why we can't hire you, because we are afraid of what he's going to do. rz he reduced taxes.

>> that's all i'm say. >> larry: he didn't tax you to death. >> i no that. >> stephen, one second what are you talking about? that's making our debate impossible. taxing us to death? $300 billion of middle class tax cuts. everybody has agreed that we are going to extend the bush tax cuts to anyone making up to 250 million, $250,000 a year -- >> arianna. >> it's those kinds of bromides -- >> i'm trying to talk. you're doing all the talking. >> -- that's making it very difficult to have a conversation in this country. >> it's not about a conversation in term, of that, arianna. i respect what you're saying. i was simply saying that the perception out there, because the republicanarty has been very adroit in decimating this message to scary the american public into thinking they were going to get taxed to death and the democrats didn't do a good

enough job of saying that's not our intention, that's not what we're doing. the president should flatter the american public by making sure he or tick lates that message clearly. >> and i think he should make it clear that he's business friendly and loves business. look, i don't think even that's going to help. i had continue better three weeks ago with warren buffett. he knows something about business. he owns a lot of businesses. he employs several hundred thousand people. i said, when will you start hiring? he said, it's not going to be tax cuts. it's not going to be anything coming out of washington. i will start hiring people again when demand picks up. and i said, well, how's that going to happen? he said, it will happen one entrepreneur at a time. one small business at a time. it's somehow making that more comfortable that i think is the president has got to try to do. >> larry: we'll be right back. i think that there's no . there is a medicare benefit that may qualify you for a new power chair or scooter at little or no cost to you.

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i think that there's no doubt as i reflect on the results of the election, it underscores, for me, that i've got to do a better job, just like everybody else in washington does. >> larry: some individual races. nicolle, what race last night surprised you the most? >> i was very surprised and very pleased to see republicans pick up the illinois senate seat once held by none other than president barack obama. i think that is a, you know, a tribute to the strong republican candidate there. and i think it says something very promising about how

republicans are positioned in 2012 in a part of the country that's usually pretty tough for us. >> larry: well put. stephen, what surprised you? >> you know what, i would agree. at the same time, i throw rubio and florida. i expected him to win. at the same time, the domination. i mean, he basically got more votes. i mean, this is a three-man race between meeks, rubio and crist. he got more votes than both of them combined. there were results that former president clinton had met with meeks, tried to get him to back out so he could throw his support behind crist. clearly, that would not have even worked. because rubio was so dominate. i think he's thestar of the republican party right now or will be in a very short order. that kind of surprised me. >> larry: arianna, what surprised you? >> i was actually surprised harry reid held on to his seat in nevada. it wasn't just the fact he was running against sharron angle that made it impossible for him to remain in the senate, despite

the fact that nevada has one of the highest unemployment and foreclosure rates in the country. it was also the fact that there was a line in the ballot in nevada that was none of the above. so people who did not want to vote for harry reid had the choice of voting for sharron angle or none of the above. so maybe none of the above actually saved harry reid. >> larry: ben, what surprised you? >> i guess what surprised me is that as karl rove has been saying, and i think he knows politics, we now have in this economically depressed rust belt area around the great lakes a solid chain of republican governors. something that would have been thought impossible a couple years ago. so that just amazes me. and if the republicans play their cards right, but i don't know how they do it, it puts them in a very strong position for the next election. but solid republican belt around the great lakes? that's amazing. >> larry: do we have a bellwether candidate coming

forward? >> i don't know. i just don't know who the candidate is going to be. i love haley barbour. i think he's a very smart guy. i don't know if he wants to do it. apparently, they say his wife doesn't like politics. that's kind of funny his wife doesn't like politics considering what he's been doing the last few years but there you are. >> larry: we'll be back. junior, run the numbers! price on a flight to maui. >> on it, dad. >> nobody move!! >> hrmmm? ♪ priceline negotiator >> i'm calling a family meeting. >> there's no time... we're searching hundreds of sites for the cheapest flight. >> what you're doing is setting a bad example for the kids. on priceline, you can shop all these flights, and get the best price guaranteed. and if you add a hotel or car, you save even more. >> shut it down, people! >> a family that saves together, stays together. [ light snort ] [ male announcer ] cold symptoms tackled.

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>> larry: may be a little off topic but i should ask nicolle wallace since "the new york times" got an advanced look at george bush 43's new book in which he says he considered replacing dick cheney in 2004. dick's going to be a guest with us pretty soon. and he said that vice president offered to step down and bush wrote that he considered the offer. did you know that? >> i did not know that. and these two men had such an interesting relationship. i'm actually looking forward to reading both of their books. but i think what will make their memoirs, or their -- i don't know that president bush is calling as a memoir. but what will make these books so interesting is these were two pretty private men. even when you were at the senior levels of the staff, it was never completely obvious what the dynamic was. obviously, there was a lot of trust. but they had very different, very different styles and temperments. >> larry: what, ben, do you see joe biden's role in the next two years? >> i think he's going to try very hard to keep his job. he'll be the cheerleader.

he'll be urging the president on. he'll be whipping up the party faithful. i'm not sure he did any good at all during the campaign. he campaigned quite a bit. i'm not sure he's a turnon or turnoff for -- >> larry: do you buy any of the story he goes to state and hillary -- >> i think if he's smart, that's what he does. hillary is a popular figure among many people. i think she's one of the few bright spots in this administration. she hasn't accomplished anything but she's very charming. >> larry: everybody's denying it, arianna, but wouldn't that be a pretty strong ticket? >> well, actually, there is absolutely no foundation to that rumor. you know, even -- >> larry: i know, but it's a good story. >> even -- exactly. but that's kind of one of the problems. we're just discussing a complete and utter nonstory. even bob woodward said that several sources close to hillary clinton had said that -- never sort of give us any sense of who these sources were, whether they were her hair dresser. there's absolutely no validity to this rumor. remember, in 2004, we wasted a

lot of time thinking that giuliani was going to replace dick cheney. this is sort of parlor games in washington. to avoid talking about the real problems outside washington. >> larry: except, stephen, if the president's in trouble, a man in trouble turns to lots of things, doesn't he? >> i would think so. certainly, considering the 18-plus million people that supported hillary clinton during the primaries, there's no question about it, that she has profound respect by a lot of the liberals. at the end of the day, i don't see barack obama turning his back on vice president biden. even though i wouldn't blame him if he did. as far as i'm concerned, the vice president was a complete nonfactor during these midterm elections and he'll be an even more nonfactor during these next two years. >> well, that's what vice presidents do. nonfactors. arianna, with great respect, first of all, you have the best haircut i've ever seen on any human being, man or woman on television.

second, it's a rumor, it's a rumor but we don't know if it will turn out to be true. might turn out to be true. but it might have some basis in fact in two years. >> larry: arianna, since you mentioned it, who did your hair today? >> but, we just -- you know what, we just, all of us, talked about how this election was ultimately based on the economy and what's happening in people's lives. so what is joe biden or hillary clinton or anybody running as vice president, it doesn't really matter if unemployment is still hovering around 10%. when it comes to 2012. that's going to determine what happens in another election. >> with all due respect, unemployment was about 18% in 1936. when roosevelt gave a huge trouncing to his republican rival. it was around 16% in 1940 when he gave a huge trouncing to his republican rival.

if you have a popular charismatic president and the republicans put up somebody who is not charismatic and popular, mr. obama can still win. he has a fantastic loyalty among certain groups. he can definitely still win. the guy's a magician. >> but the problem isn't -- >> fdr had a plan. he needs to have a plan that goes beyond wanting to just sit down and find common ground. >> may i say something? >> you said it. ben said it. ben is an economist. and i, believe it or not, got my degree in economics. the bottom line is exactly what ben quoted warren buffett saying. if you don't have demand coming from the private sector, you need to have the government create demand and that's what fdr did and that's what obama has failed to do. >> larry: all right. we'll take a break. stephen, we'll get his word in. we'll be right back.

what is the plan? what is the plan to cure this crisis? what's the new idea? >> i sincerely hope it's just all about job creation. because i've got to tell you something. >> larry: but how? >> again, you know, i don't know if it's lowering taxes, i don't

know if it's -- if it's implementing or extending the bush tax cuts. i really won't pretend to know that. as the lone african-american on this show tonight with you, i will tell thank you right now, 88% of the african-american community has approved of the job that barack obama is doing. and at the same time while the unemployment rate is at approximately 9.6% and over 15 million people in america aren't employed like arianna said, 27 million people underemployed, the unemployment rate in the african-american community has been hovering above 15% for quite some time. so you would hope that at some point in time the african-american community will stand up and say to the president of the united states, we got love for you, we support you and the whole bit, but you've got to get the job done. we can't just vote for you because we like you. we need to see results. because there's big time problems in the community and nobody's addressed that. so i feel obligated to do so. >> do you see any light at the end of the tunnel, ben? >> not much light. as stephen seems to be nailing one after the other, the situation for african-american teenagers is unbelievable.

45% unemployment. that's just almost unbelievable. but what they do about it, i don't know. people are not in the mood for another big stimulus package. the government deficit is becoming enormous and unbearable. how are they going to create the jobs? they have to create a business-friendly climate without spending a lot of money thachltz going to take some very careful work, a positive program for employment and making employers feel confident. it's what fdr said, we have nothing to fear but fear itself. let's open the windows and let the fear out. >> larry: we'll be back right after this.

>> larry: we're back with our remaining moments. there were a few interesting moments last night. here's carl paladino conceding the new york governor's race. watch. >> bring the people with you to albany. or you can leave it untouched and run the risk of having it wielded against you. because make no mistake. you have not heard the last of carl paladino. >> larry: there was an interesting candidate. >> he was fantastic. i loved him. he was like a character out of a movie. he was really, really hilarious and i hope we haven't seen the last of him. he's theater. >> larry: you think andrew cuomo has the makings to be a good governor? >> extremely smart, and

self-confident. i like that about him. >> larry: you see any new republican face on the horizon, nicolle, we ought to start looking at? >> republicans are really excited about marco rubio. they're very excited about the job that chris christie, governor of new jersey, is doing. a little bit into his term. they're excited about the pickup we talked about in illinois, and they're thrilled about the victories in ohio. so i think you'll see republicans coalescing around some new stars in the republican party, which we needed. >> larry: stephen, any new democrats? >> none that i can think of to be quite honest with you. i think all of them look absolutely sorry right now. they're licking their wounds, it's going to take them a while to recover. there's no question about that. i live in jersey and on the republican side, i'm a fan of christie. i think he's doing a hell of a job. to be pragmatic, let's get emotion out the way. emotion doesn't pay the bills,

it does not help us recover from things. let's be pragmatic, asuit and very smart about how we go about our business, and i think the republicans have cornered the market on that right now. the democrats have a little ways to go. >> larry: arianna, your book may be very prophetic. do you see any light at the end of the tunnel? >> actually, i do. section five in my book is all about the light at the end of the tunnel. it goes beyond what government does in washington, it's about all the stars that have met across the country that are taking matters into their own hands. some of them are just giving up on anybody giving them a job, and they're using social media, like etsy.com to turn their own hobbies and passions into jobs. others are creating group that's are helping each other, unemployed people creating a site, who's got time to help, where they take their time to help rebuild their communities. there's an amazing amount of incredible things going on all across the country.

and if we in the media put more of a spotlight on the good stuff, we'll inspire many more americans to really take that force we love about america and turn it into rebuilding our lives and communities. >> we saw with the tea party, the small group of people really focused, really knowing what they wanted, can change the whole country so i think a small group of people can start the economy going again. innovation, creativity could restart the economy going again. >> reporter: are you optimistic? >> absolutely. i think that we heard president obama do something today in his press conference, i think that when he clearly articulates his faith and optimism in the country, it's such a simple thing but he doesn't do it often enough for most people. i think we were talking about hillary clinton, i think that whole rumor is an acknowledgment that he doesn't always connect. i think you'll hear a lot of rumors about swapping out.