house, often more house than you needed or would have expected to buy, made you feel wealthier. as more people bought those houses, your net worth increased. you borrowed against that house, maybe. maybe you put your kids through college with the money. maybe you bought another house or financed a small business. maybe there wasn't even a house involved. maybe you did all of those things on low interest credit cards or other kinds of loans, but it doesn't really matter because generally economies were strong and you had a job, even if the job wasn't getting much better and your wage wasn't growing you were for all intents and purposes getting more prosperous. because of that you weren't complaining. cheap and ample credit masked a lot of problems, the most serious of which was that income inequality was growing. but until the house got blown down, there was no class war, there was no 99%, there were no protesters in the streets. politicians and policymakers didn't have to address the underlying reasons for the trend. seriously, why fix someone -- something that no one thought

was broken. easy credit means that while india was focused on educating workers, the u.s. was falling behind. while china was building world-class infrastructure, the u.s. was crumbling. while germany was establishing itself as the factory floor of the western world, the u.s. was losing ground. we already had a consumption-based economy. we just made it bigger. people felt good. they kept up with and in some cases overtook the joneses. this economist is a distinguished professor of finance at the university of chicago, former chief economist with the international monetary fund, and he blames politicians for making easy credit available to their constituents thereby masking that growing income disparity. that's the inequality debate you hear so much about these days. thank you for joining us. tough cutbacks have not worked in europe. we've got unemployment in the eurozone of more than 11%. much higher in some countries. and many argue that the solution is more government spending.

the point of which is to create employment enabling consumers to spend more and continue to access credit so europe can consume its way out of this recession. what, if anything is wrong with that thesis whether in europe or america. >> the idea behind that thesis is somehow short-term spending will resolve the problems of the recession, and then we'll get back to normal growth. what i've been arguing is that there was no normal growth before the recession. it was a lot of it was fueled by spending, whether by households in the case of the united states, or by governments in the case of say greece, or by banks in the case of ireland. there was a lot of debt fueled spending which was the basis for growth. so, governments can sort of spend to substitute for a short while but you come back to the old question, how do we generate sustainable growth? you have to have real jobs with

real incomes. not fake jobs created by debt. >> so let's bring kris ya freeland into this, editor of thompson reuters digital. lots of analogies for us to use here. so stick with me while i continue the storm idea. when the weather is good, you don't have to worry about whether or not you have holes in your roof. so the weather being good here, is this cheap and easy credit. right? you didn't have to worry about the fact that there were underlying problems. ragu says you have to have solutions that create long-term growth. wasn't there the potential for long-term growth with the easy cre it? didn't it create enough wealth that put some kids through school? shouldn't that have contributed to ongoing growth? >> sure. and it could have been and some of it was, some of that money was invested in real valuable things. i think, you know, the parents who took out a home equity loan to put their kid through college and now are struggling to pay back that debt still have a kid that went to college and that's a great thing. in europe actually, the infrastructure is terrific and

lot of that government spending that ragu was talking about was infrastructure spending. to continue your weather analogy, ali, i think that we are going through a period of economic climate change, global warming if you will, that the environment has changed profoundly and it was changed -- it's been changing for the past couple decades. we just didn't really notice because this easy credit masked what was going on. but we now have to retool our economies and that we is north america and western europe, to deal with this new environment in which as you were pointing out, the middle-class jobs that we were accustomed to in the post-war era are not there. even people who have jobs are getting paid much less. that is the story of detroit and the car sector. and to me, that is the most pressing economic problem right now. i don't see any politicians on the left or on the right really facing up to this directly.

everyone is focusing more on okay, here's what i'll do right now, and it's going to fix things right away. >> it's like, ragu, talking to martians at this point. we know how this economy works. we buy things, that creates jobs, we get rich, we buy more things. what other type of economy could america develop? what could it turn into? >> well, it could be a knowledge economy, it could be a service-based economy. we could actually have high-tech manufacturing. there are all these possibilities. but what we must start with is by recognizing the old jobs are no longer there and there's no point hankering after them. the guy who used to add up the left-hand side of a ledger and right-hand side of a ledger has been replaced by a computer. the guy who used to do low-skill manufacturing, just managed the machine and oil it frequently, that job is no longer there. it's gone to china. china has gone much further ahead. the new jobs are in high-tech

welding, in nursing, in high-tech nursing, where you manage the machines, medical technologies. those are the jobs we have to prepare. those have reasonable incomes still. the problem is this is not a fix which is going to take place in six months. it's a fix that takes many years. a fix which requires telling kids you know you're not going to get much by just doing a liberal arts degree. you have to get the skills that allow you to get the jobs that have been created. i was talking to a professor yesterday, he says nobody does computer science in his college anymore. it's too hard. that's where the jobs are sometimes. >> yeah. >> we need to figure out a way of getting people the right way. >> take us to that discussion in a minute. everything you are suggesting is sound and it's deliberate. it doesn't play to an angry electorate in the months before an election. when we come back we're going to talk a little more about how we translate what you're talking about into something that gets interesting to americans and

lets them vote in a way in their self-interest and country's self-interest. the three things congress needs to do to try to fix this economy in time to head off the coming economic storm. you're watching "your money." the radical new macbook pro with retina display. ♪ innovation...in every dimension. ♪ by what's getting done. measure commitment the twenty billion dollars bp committed has helped fund economic and environmental recovery. long-term, bp's made a five hundred million dollar commitment to support scientists studying the environment. and the gulf is open for business - the beaches are beautiful, the seafood is delicious. last year, many areas even reported record tourism seasons.

the progress continues... but that doesn't mean our job is done. we're still committed to seeing this through. it's time to live wider awake. only the beautyrest recharge sleep system combines the comfort of aircool memory foam layered on top of beautyrest pocketed coils to promote proper sleeping posture all night long. the revolutionary recharge sleep system... from beautyrest. it's you, fully charged. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal.

begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. okay. we're back with ragu and chrystia. you made some great suggestions about how we fix our economy and guess what, none of them are short-term. i suspect if you were running for office you wouldn't get a few votes.

kris ya, how do we take those ideas and plant them into this weird environment that we're in, that people want fast answers, to get us out of the hole now? >> well, i don't blame people for wanting fast answers, because a lot of people are suffering and as you pointed out, ali, they've been living in this beautiful illusion. so people aren't expecting to have suffered. but i think what really politicians need to be talking about is a few things. first of all, this is a time for national investment. ragu was speaking about education. he's right. that doesn't come for free. it's not free for the students who need to be educated, it's not free for the government. but what is america doing right now? firing teachers. and the great american public university system is actually weakening. i think that is really a central infrastructure, absolutely essential. look at what's happened with the storms in the northeast. you know, washington, d.c., with no power. this is supposed to be the capital of the greatest country

on earth. and that's an opportunity also for jobs and the third thing is someone is going to have to pay for it. i think americans have lived with this illusion that you can have investment in your economy and nobody has to pay taxes. it doesn't work that way. >> ragu, talk about this for a second. a lot of people who align themselves with the thesis that you have laid out very clearly here, also tend to be conservative in saying stop with the short-term spending, we've got to cut our debts and deficits and then it doesn't finish the sentence with the investments with he need. people will say, we are saddling our grandchildren with unsustainable debt. there is a certain amount of debt that's okay to give to your grandchildren because in exchange for that they're getting the things that chrystia outlined, great infrastructure development, a world that will be more competitive in the next generation. how do you square that, that circle? >> well, first, the benefits. we are creating more capabilities for the future, and second, i think as, if not more important, we're creating a more stable political and social

structure. if you have these levels of inequality which persist and you have people who think they have no opportunity in the future you're going to get social conflict of a kind we've not seen in the united states. this is important both from the economic perspective but also political. clearly you need -- >> sorry. >> following on to the point, the inequality, i think most americans still believe they live in a society that has the most opportunity of any country on earth. that is just not the case anymore. social mobility is breaking down because of these high levels of inequality and that political stability that ragu is talking about which is so important i think is going to be threatened. >> we've started to see bits of that on the surface with the protests we've seen, with the idea that people have segmented themselves into different parts of the economy. ragu, continue with your thought. >> so, that said, this is an investment we need to make, but we need to be clever about it. there's no point making the

investment and getting away from the innovative economy we've had. there are parts of the economy which are doing quite well. let's sustain that. which means let's not do this on the backs of taxing the rich at the rates we used to tax in the past, 91% of marginal income. increase taxes a little bit, but make sure the tax system works better. tax reform across the board makes sense. broadening the base, increasing taxes a little at the top, but don't make all the spending go to the people at the top which creates a whole set of new problems that we don't want to deal with. at the same time, there's a lot of room for cleaning up the way we spend, making it more effective. it's not true that every education worker that we have is useful. it's not true that every teacher we hire is doing a good job in the classroom. we need to get more money for the dollar that we spend and so spending reform has to accompany tax reform. and that i think would put us on a more even keel.

>> chrystia, what's the disconnect? listening to ragu sounds so obvious, if he were running i would want to vote for him. why can't we have that discussion translate into our elections? >> i'm going to vote for him too. two reasons, one, people are scared and at a time when people are scared if your message is blood, sweat, tears and higher taxes they are not very receptive. but i think the second point is what ragu said which is really essential, that if what you're talking about is some government investment in things like education and infrastructure, people are saying, wait a minute, i have seen the private sector become much more efficient, driven by technology, you know, my iphone is a miracle, i expect real responsiveness and efficiency, i don't see government delivering that. and so why should i trust the government to be a smart spending? i think that the government has missed out on the technology

revolution and until it does, people are not going to have faith. >> why should i trust my government to be a good, smart spender, what is so operative in this discussion. thanks very much for sharing this conversation with us. we'd love to have you back. chrystia a pleasure to have you here. i keep telling you about the impending storm, the fiscal cliff, the edge we're on, europe is no means stable and seeing slow downs in giants like india and china. we'll talk to someone who's putting millions of dollars to work for his clients during this uncertain time and we'll ask him what you should consider investing in right now. plus, two legends of congress, both disgusted by today's dangerous levels of partisanship. i'm asking them to name names of who's willing to reach across the aisles for the good of the country right now. [ kate ] most women may not be properly absorbing

the calcium they take because they don't take it with food. switch to citracal maximum plus d. it's the only calcium supplement that can be taken with or without food. that's why my doctor recommends citracal maximum. it's all about absorption.

wall street like congress has a history of not acting until it's too late. you may not have that luxury yourself. remember what happened in 2008 when you looked up and half your 401(k) was wiped out in a matter of weeks. we know the american consumer is feeling the fear and when consumers stop spending, businesses stop hiring, add to that a slow down in emerging economies like china and india, even the biggest global economies like mcdonald's and nike and ford start taking it on the chin. consumer cyclical stocks, the canaries in the coal mines for recession and recovery are the first to react to the shifting economic winds and they are

where my next guest says you should put your money if you think things will get better. if you don't then don't. jim is the managing director of zephyr management. he joins me now. jim, thank you so much. >> always my pleasure. >> two things to remember, the first one, consumer cyclical stocks and generally smaller companies tend to react because they're nimble, they can react into and out of a reauto session. if you think things are getting better you want to be in these companies? >> you can make that case they are nor nimble. the stock market tends to move in a risk on/risk off trade. when the market gets scared and risk is off in a recession, investors typically sell those companies and go to bigger, more conservative companies with dividends and global footprint. >> okay. so we think from the evidence around us that something is going on that could slow things down in this economy. we've seen manufacturing numbers weaken, consumer confidence weaken. at the same time you have other things going on, housing is not

weakening, interest rates remain low. what is the bet my viewers should make? >> what they should be aware of the risks that china is slowing down, india is slowing down. europe is a mess. the united states, while it's still growing, the rate of growth is decelerating. you're in a low growth environment where a lot could go wrong and if it doesn't go wrong, the growth is going to be so slow, it's going to feel like a recession even if you're not in one. it's a low return environment. >> you think big companies are a place to be, multinationals? >> to the extend you want to be invested you can make the case in a low return environment, corporations with a global footprint and good dividends and balance sheets, many have dividends of 3% or more r a better place to be than cash which pays nothing and bonds which pay very little. if you're willing to look out a few years and not necessarily a few months, it's likely over a longer periods of time you'll do better in properly chosen equities than cash. >> talk about microsoft.

we've got a screen up on microsoft. you're sort of thinking the stuff that microsoft does, continues regardless of whether there's a slowdown. >> you have a huge installed base, recurring revenues, even in slower times businesses spend to upgrade technology at a a lower cost to be more productive. you've got a for tress balance sheet, 3% dividend. and global footprint. they're benefiting from the recovery in the united states and they will benefit from the long-term growth in the emerging markets so absolutely microsoft fits the about ill. >> talk about mcdonald's. >> mcdonald's is similar for different reasons. it's got a global footprint. when things get slower around the world, people instead of going to restaurants, especially in developed markets like the united states and europe, instead of going to fancy restaurants they'll go to a mcdonald's. >> right. >> and in the emerging markets the growing middle class gets money, instead of eating at home they will go to a mcdonald's. you have a good dividend and a fair valuation. >> do you like nike? they came out with something

that sounded like a bit of a lower guidance? they were saying their sales in the east are not going to be as strong as they expected. >> look, nike is a good long-term growth story but i would put it as a little less attractive than mcdonald's other microsoft it's a higher growth/higher risk/lower dividend but it's a good global franchise. it's more volatile than where i would steer people. >> two kinds of things people buy, things that are discretionary and things you have to buy all the time, toothpaste and ketchup and, you know, things like that. so you like proctor and beganble. >> procter & gamble fits the bill again in the united states if things get slower. people will continue to have to buy the staples. and again, in the long term, in the emerging markets people who couldn't afford the staples in the past as the middle class is created will start to buy them. a good balance sheet. that's the type of company with a dividend you want to own. >> this is all sort of defensive. >> you have to have very low expectations if you can make 5%

a year, in the environment we're in you're doing just fine. >> always a pleasure to see you, managing director of zephyr management. i tell you of an impending economic storm and there's little you can do about it except pressure your members of congress and cast an informed ballot. but there are some things you can do. more personal things to protect your investments. rebalance your portfolio. these are issues that christine romans have spent time studying and writing about in our book "how to speak money." three chapters dedicated to these issues that can help you make better financial decisions. i've told you that congress has to act now, how the partisan bickering designed to win elections is driving our economy to the brink. when we come back i'm going to tell you the three things congress can do now to protect you and the economy. it's that my way or the highway ideology in congress that's left one of its longest serving senators so frustrated she's decided to walk away. olympia snowe joins us when we return. n't it be nice if there was an easier,

less-expensive option than using a traditional lawyer? well, legalzoom came up with a better way. we took the best of the old and combined it with modern technology. together you get quality services on your terms, with total customer support. legalzoom documents have been accepted in all 50 states, and they're backed by a 100% satisfaction guarantee. so go to legalzoom.com today and see for yourself. it's law that just makes sense. in here, every powerful collaboration is backed by an equally powerful and secure cloud.

that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power to make new ideas real. it's the cloud from at&t. with new ways to work together, business works better. ♪ [ male announcer ] even if you think you can live with your old mattress why not talk to one of the six million people who've switched to the most highly recommended bed in america? it's not a sealy, a simmons, or a serta. did you know there's a tempur-pedic for everybody? tempur-pedic beds now come in soft, firm, and everything in between. these are real tempur-pedic owners. tempur-pedic brand owners are more satisfied than owners of any traditional mattress brand. and now through july 8th is the perfect time to buy. save up to $200 during our mattress set savings event and up to $600 on tempur-cloud supreme.

also get 0% apr financing with up to 5 years to pay on qualified purchases. to learn more, visit tempurpedic.com. don't wait -- 5-year special financing mattress set savings event and tempur-cloud supreme savings end july 8th. tempur-pedic -- the most highly recommended bed in america. i have been telling you about the economic storm that is making its way to our shores from europe where the debt crisis blowback could hit americ at hurricane strength, from asia where growth engines

like china and india are stalling in the wake of fewer exports to the west and from washington, where scorched earth partisan pollic ticks could push america over a fiscal cliff if congress doesn't act. legislation needs to be passed now. to head off a series of tax increases and spending cuts that are mandated to take effect on january 1st because congress couldn't come up with a proper deal to raise the nation's debt limit last year. so that's the ridiculous compromise they came up with. if congress doesn't act before the elections, it may be too late to fight off the economic storm. you heard it from mohammed el arian, a 30% chance of a recession he says. after listening to me saying this endlessly even i'm starting to thing i'm full of hot air. i'll give you three specific things that congress can and must do now to address the something economic storm. first, head off that so-called sequester, the $1 trillion of

automatic across the board spending cuts that are mandated by congress. the ridiculously named sequester legislation was passed as part of last august's debt ceiling extension which followed, as you recall, but would like to forget, intense partisan blackmail by both sides that nearly shut the government down and led to a downgrade of the united states' credit rating. a stupid name for a stupid thing that could hurl the u.s. head-long back into recession, so solve it, congress. second, all right, we've grown to look at another debt ceiling extension early next year. so what say we all get together ahead of time, and act on it before the election, before washington gets tempted to take america back to the brink a second time. and finally, third, negotiate another agreement on whether to extend the bush-era tax cuts and adjust the alternative minimum tax to avoid slapping americans with a higher tax bill next year. these are three simple things

that congress can do now, three things washington needs to do, before the elections to avoid falling over that fiscal cliff in january. if politicians and congress put off the work that needs to be done, let them be held accountable for the next recession. joining me norm, a resident scholar at the conservative american enterprise institute, describes himself as a centrist, his book "it's even worse than it looks how the american constitutional system collided with the new politics of extremism." cnn's political director mark preston and cnn's conservative contributor will cain. do they call you that? i keep adding that. >> i let you describe me. >> describes himself as a conservative and he says that two parties working together to achieve a solution is created today's problems. >> that's true. >> i don't understand what you're talking about. >> that's what i'm talking about is in historical perspective. norm will join nous a few minutes that will rebut what i have to say. i'm saying this combination of

democrats and republicans seeking low taxes and high spending has created everything from social security to medicaid to no child left behind and i couldn't think we look look at these across the board and pump our fists good job, congress. yes, now we are in a terrible situation, ali. we are looking at a fiscal cliff that i'm going to take a pin and go over to your post-it note and get these three things done. >> right. >> before you just put bipartisan up on mount rush more realize what got us here in the first place. >> i'm not objecting to whether it's partisanship or bipartisan that got us here these three things have stopped us from getting done. >> mark preston, why can some congressmen not fall on their sword and dot right thing if that's what it takes to help the economy? would voters really turn on someone who has the guts to say, this is the best thing to do for the future of this country and your job and our economy, regardless of party agenda and

partisanship? >> ali, let's look at the macro level. when you're talking about getting things done on capitol hill everything is done through the parties. it's quite frankly what we've seen on the republican side as we've seen the rise of the tea party, which has had an enormous amount of influence over how house republican leaders approach legislation and approach how they do things, but at the same side on the democratic side the liberals who are really pushing hard on the agenda. what you're talking about are the folks in the middle, these blue dog democrats, folks who try to build bridges, folks that perhaps, will was saying, that might be the problem because they are trying to chart some kind of middle course. the bottom line it's so.son nous on capitol hill and i hate to say this, this is not going to get fixed until after the election and if we think things are bad now politically wait until after election day when they have to deal with all these major issues. >> that's my concern. if you are so adamant as steven moore was this isn't going to get done beforehand but after the election there will be more impetus the only thing after the

election are more deadlines. in addition to all the issues i mentioned you're predicting one of those possible government shutdowns over spending bills in october because house republicans are going to try and keep every dime for defense, they're going to double down on domestic discretionary cuts. my head will explode if we can't even deal with the problems we've got and might face a shutdown. >> steven moore said it's always darkest before the dawn. what john mccain often says, it's always darkest before it turns completely black. but the fact is that the deal that was worked out to avoid the last debt limit and remember, it was really the house republicans, not john boehner who warned them they had to get something done, but others in the leadership who held the debt limit hostage the last time, now it's boehner who's threatening to do it with the next debt limit but the deal that they reached that included these sequesters if they couldn't do the other actions, now you have the house republicans saying never mind that deal, we're not

even going for it for the spending bills for the fiscal year that begins october 1. we're going to renig on the defense part and double down on the domestic side. that doesn't bode well for any kind of a deal before the election. the fact is in the senate, you are seeing some bipartisan action and attempt to try to find that golden mean, the broader deal, the larger deal, the grand bargain that we've talked about, and it has to include inevitably over the long run more revenues and a significant slowdown in the growth of spending including in the big entitlements, if you have however, 90% of the republicans in the senate and 237 out of 242 in the house who have taken the norquist pledge, that doesn't bode well either. so, you know, i'm nervous, but i think mark is right, the likelihood of things getting done before the election remain exceedingly slim. >> but things -- you brought up the norquist blej pledge.

the norquist pledge, grover norqui norquist, americans for tax reform, a pledge signed by virtually every republican in the house which says you will not support any net new tax increases if you need emergency short-term spending because your economy is going down the tank again, you risk grover norquist and his people campaigning against you. why is that acceptable in our dynamic economy and our democracy? why can't we tell people stop with the pledges, go in there and make the necessary deals that have to be done. i'm not asking you as a conservative. this is something liberals and conservatives need to do. democrats and republicans have to move on this. >> the reason i think guys like grover put that pledge out there and another -- politicians follow that pledge, because the historical perspective you give a dollar to the government it finds a dollar in spending. find ways to spend that dollar. grover i would assume, don't want to speak for him, we've got to cut off the spigot, the funding of government. you are right, it doesn't allow for basically emergencies.

we've arrived at two emergencies you point at, one the fiscal deliver and the other you're not talking about that norm alluded to the long-term debt and deficit problem. both of those problems are working in opposite of each other. >> correct. >> we have to, yes, perhaps let go of some of our historical perspective to make concessions on those emergencies and get action on those emergency in the short term, but he's not wrong on the long term. long term is, we've got some lessons to learn about governance and the concept of getting things done. >> ali, let me add that a couple things. first of norquist pledge is against any gross tax increases. republicans that say i can't stick with the pledge because to get tax reform the kind we've talked about before you need to raise taxes on some to lower taxes on others and that violates the pledge. >> right. >> the other thing is something that bruce bartlett, an economist for ronald reagan and others have said, history tells us that when you get fiscal discipline is when you actually raise revenues and couple that with spending cuts. when you cut revenues it has had no effect on the spending and

that's a good part of the reason we've ended up in the mess we're in after all the tax cuts at the beginning of the last decade. >> mark, later in shows we'll talk to olympia snowe, dredging up everybody we can find who once walked roughly in the middle of the road. do you come across those on your travels while we're looking at a campaign? >> look, let me say, i spent six years on capitol hill as a newspaper reporter. i spent a lot of time with the likes of olympia snowe, tom daschle, trent lott, and it's amazing trent lott would be considered a centrist. they wouldn't think he's conservative enough. what's happened in congress, things have gotten so polarized at this point seeing the likes of olympia snowe say i'm leaving. we saw that from a democrat from indiana that left congress. what's going on on capitol hill bipartisan is not a bad word, it's a good word. what's a bad word is punting and that's what you see from the leaders on capitol hill. keep punting the ball down. we'll deal with it later.

and that's where we stand right now, ali. >> mark, norm, will, great to have a great conversation with all three of you. thanks so much. >> thanks. >> coming up next, intense partisanship and the my way or highway ideology in congress has left one of its strongest serving senators so frustrated she decided not to seek another term as promised, olympia snowe when we return. ♪ ♪ [ male announcer ] its lightweight construction makes it nimble... ♪ its road gripping performance makes it a cadillac. introducing the all-new cadillac xts. available with advanced haldex all-wheel drive. [ engine revving ] it's bringing the future forward.

after three terms in the senate more than three decades in washington republican senator olympia snowe shocked the beltway this year when she said she would not seek a fourth term come november. her reasons, intense polarization and partisanship that are crippling our political process processes. senator snowe joins me from washington. thank you for being with us. you've got a reputation for being a practical politician willing to cross lines to get things done. you said in an opinion you wrote, when you announced you weren't running i'm going to read this to our viewers, for change to occur our leaders must

understand that there's not only strength in compromise, courage in conciliation and honor in consensus building but also a political reward for following these tenants. the reward will only be real if the people demonstrate their desire for politicians to come together after the planks in their respective party platforms do not prevail. are things more partisan than they were when you first entered that building? >> oh without a question. since i entered the senate and most especially since i served in the u.s. house of representatives when i was elected in 1979, but i came to the senate in 1995, and there's been dramatic change and it's grown grown exponentially worse and over the last few years, where you're seeing very little of the legislative process working in a way that it should that allows for openness and transparency and accountability, to see what we're doing, how we craft legislation, allowing amendments to be offered,

working through the committee process first, reporting the bills to the floor, having an open amendment process, so the public has a chance to see how these bills are fashioned and what the differences are in views. but none of that is transpiring today in the senate virtually speaking. what you're having is up or down votes, either or situations, cloture potitions, cloture votes, amendments so you can't offer amendments, all these procedural blocks are impeding the public's interest in the country's interests and that's -- >> you're right when you say that. this procedural stuff goes over our heads generally speaking. what we want to see are there are veteran or new politicians who somehow have the creativity to arrive at compromises that we the voters have neither the time nor the inclination to arrive at. that you are going to be elected to go there and try to solve our merry adof serious problems. is there a sense amongst your colleagues at this point in time, this very specific point in time, this inability to

compromise could put us back into remarkable economic turmoil, largely because of what's going on around the world, but this really could do great damage? >> you're absolutely right. that's precisely my point and precisely my concern. yes, many of my colleagues do realize that. i think the question is now, can they transcend that and overcome it? and to make the difference in the united states senate to get something done. and that really is in the hands of the leadership. you know, that determines the agenda and what happens and what doesn't happen and how it comes about. for example, the fact that we're postponing all of these key issues on the fiscal cliff unfill after the election, we have waste all of this year, we wasted all of last year. >> yep. >> in the way we handled the debt ceiling, for example, created the super committee, we knew that wasn't going to be a possibility, they're going to achieve all these reforms in a short period of time with so few people, and then, of course, we've had no budget and now

we're facing this monumental fiscal cliff at a time we're seeing international turmoil, let alone our own domestic economic turmoil that could paralyze, because any one of them could trigger a financial crisis. everybody recognizes. the question is it's not happening to change that. there's no circumstance to change that here in the united states senate unless you have the president and the leadership on both sides coming together and recognizing that we need to do this in a way that's going to build consensus. the american people have to understand that too and they have to demand it of their elected officials. >> i haven't been as articulate as you have been, i've been for half an hour saying on this show this is what we have to demand of congress and that they act sooner rather than later before the election and all i've been told about those much smarter than i am in congress is i have a better chance of growing hair on my bald head than that happening. what i would like to do over the course of a few weeks is form a

list of people like you willing to reach across party lines, willing to reach across ideologies, you have worked with these people directly for 30 years. tell me who the best people to start that list with would be. >> well, there are a number. there have been a number of people on both sides and, you know, probably give out names name, but i would be glad to work with you on that question. i do think it is important. there are people who are willing to do that. but i think i would also suggest in starting with the leadership because obviously that is very important in terms of what happens and doesn't happen and secondly, is using the social media and the technology today to get the message out. if we had used social media technology and how to vote, you know, either/or situations, whether it's conservative liberal, we can also use that in a way to say, let's build consensus. we demand consensus in the political process.

>> i know you're leaving the senate. i hope that wisdom and spirit of compromise stays after you're gone. i'll take you up on the offer to find those people in that building in the house and senate who can, who might just act earlier than the election and stave off this economic storm. senator olympia snowe pleasure to talk to you. the partisanship on capitol hill represents the failure of what i think of as the shakespeare rule. to thy self be true, by way of a man who served in congress for 34 years. lee hamilton on putting country before politics, that's next on "your money." aduation. when i look up into my students faces, i see pride. you know, i have done something worthwhile. when i earned my doctorate through university of phoenix, that pride, that was on my face. i am jocelyn taylor. i'm committed to making a difference in people's lives and i am a phoenix.

visit phoenix.edu to find the program that's right for you. enroll now. multi-policy discount. paperless discount. paid-in-full discount. [yawning] homeowner's discount. safe driver discount. chipmunk family reunion. someone stole the nuts. squirrel jail. justice! countless discounts. now that's progressive. call or click today. send a note stay informed catch a show. make your point make a memory make a masterpiece. read something watch something and learn something.

do it all more beautifully, with the retina display on ipad. ♪ and it starts every morning with gillette fusion proglide. get your great start... with gillette fusion proglide. ♪

you heard me say that i am looking to highlight those members of congress willing to reach across party lines. willing to reach across ideologies for solutions to our economic problems. some of you share my view. others think i'm stark raving mad for suggesting it. and you in the second group might actually be right. according to a recent gallup poll, congress's approval rating stands at 17%. that is lower than richard nixon's approval rating during his impeachment. even congress is frustrated with congress. lee hamilton spent his 34 years in the house of representatives actively working against partisanship as well. as he true american statesman. someone i admire a lot. he's worked on a number of

bipartisan commissions including the 9/11 commission, the iraq study group, the blue ribbon commission on america's nuclear future. he is the author of "how congress works and why you should care." former indiana congressman lee hamilton joins me now. welcome to the show. you say it has been years since congress acted as if it took its responsibility seriously. what has changed? >> well, i think many things have changed. i think you're correct in your opening comments. that excessive partisanship has become the most prominent feature now. the distinguishing characteristic of our politics. and it comes about for a lot of reasons. there isn't any single reason for it. there isn't any single solution. we have gerrymander districts, we have politicians that express themselves immediately. we have congressional schedules

that don't allow members to get to know one another. we have the intensity of our politics in the country has over a period of decades, picked out very sharply. more is at stake. people are more interested in government doing something for them. and the country as a whole is divided more along partisan lines. so there are a lot of reasons for this excessive partisanship. >> you've mentioned that you think we lost our political center which corresponds to the idea that we are losing our middle class. we are economically and politically going to different ends of the spectrum. tell me, it wasn't that long ago that you were in the midst of this whole thing and it was important to you to walk this middle ground, to put forward legislation that got support on both sides of the aisle and to reach across to get republicans to support measures that you were interested in supporting. you mentioned relationships. talk to me about what's changed on that front.

>> well, i think members of the congress don't really get to know one another very well. it is very hard to get mad at somebody that you know well. and the schedule today is such that members come in monday night or tuesday night. they have very intense schedules while they're in washington. leave thursday and home on the weekends. they no longer mingle with each other's families. they don't get to know one another's people. when they do meet, it is in the confrontational setting of the committee room or on the floor of the house. so i think that's an important factor. not a sole factor by any means. but they have to make the schedule a little more family friendly, if you would. and let members of congress get to know one another better. >> we like to point the finger at partisan politicians who are making this worse but it is in fact vote here's electricity them. the american public is more

polarized today than at any point in the last 25 years. this is a chart that the pugh research center put together measuring the percentage difference between republicans and democrats, voters on 48 questions about their values. the results show americans are more divided along political lines than by race, religion, or gender which is fascinating. how much blame do you accord voters for this grid lock in washington. what can voters do to try to change this? >> the old sign on harry truman's desk, the buck stops here, is only half right. ultimately the buck stops with the american voter. and we have to say to our friends in politics that, look, take your positions. advocate them strongly. say what you want to say. but at the end of the day, your responsibility is to make the country work. your responsibility is not to

put forward an ideological agenda. your responsibility is to work with your colleagues so we can move this country forward toward a more perfect union. that can only be done if you take into account as best you can the points of view of many different people represented within the congress. so i want to see members of congress who come there not to push an ideological divide. not saying i will not compromise but saying that my responsibility is to see that at the end of the day, this country works. i think that's the attitude that has to be the mindset, if you would, of members of congress today. >> lee hamilton, what a pleasure to talk to you again. thank you very much for your wisdom and sharing it with our viewers. >> nice to be with you. thank you. you've heard my thesis. you've heard my guests. now it's your turn. tell me why i'm wrong.

i'm ready to debate you. -- captions by vitac -- www.vitac.com ♪ ♪ [ male announcer ] you've been years in the making. and there are many years ahead. join the millions of members who've chosen an aarp medicare supplement insurance plan insured by unitedhealthcare insurance company. go long.

i tell mike what i can spend. i do my best to make that work. we're driving safely. and sue saved money on brakes. now that's personal pricing.

i have given you three specific things that congress can do and must do now to address the coming economic storm. first, head off that so-called sequester, the trillion dollars of across the board spending cuts that are mandated by congress. second, get a debt ceiling extension in place before washington gets tempted to take

america back to the brink a second time. and finally, third, negotiate another agreement on whether to extend the bush era tax cuts and adjust the alternative minimum tax to avoid slapping americans with a higher tax bill next month. that's my to do list for congress. i'm ready to twit yours. tweet me right now. you'd better be ready to debate because i read them all and i love to write back. thanks for joining me. we're here every saturday, 1:00 p.m. eastern, and sunday, at 3:00 p.m. have a great weekend. welcome to the cnn "newsroom." it is a record breaking heat wave that won't go away. one quarter of the nation suffering through another day of scorching triple digit temperatures. that's dangerously high for anyone. especially so for people who don't have air conditioning.

and that's the situation facing hundreds of thousands of people who lost power during a freak storm a week ago and still don't have it back after all this time. cnn's reporter joins us live from virginia, a state hit hard by the power outages. emily, this hasn't been just a weather vaent. it has been an economic event. businesses haven't been able to operate. >> reporter: hi, gary. it has been such a long week for people. when you see trees like this that toppled and the power lines that came down more than a week ago, it set off a chain reaction so big that the experts, the government and even small businesses say they just haven't been able to add up the total costs yet. what is clear is that as the power comes back on, people are beginning to see just how much they lost. though it only takes an instant for the lights to go out in a storm, things can get darker for days. a chevy chase supermarket just outside washington. disaster hit three days after losing power.