i am so glad you are able to be here with us tonight forhis terrific panel. i want to thank our co-sponsor, the public concern foundation, democrats.com, democracy now, code think. as we try to find our way out of this mass, we should listen to those who warned us of this day of reckoning because history matters, and when too many have as their mantra don't worry, be happy, asian, like an early warning system, alerted us to the dangers of the regulatory frenzy, predaty lendin rising economic inequality, and from the speculative bubbles. as the crisis has deepened the

nation and its many moving parts aren't writers and nation institute fellows on television and radio at our web site, nation.com, events like the emerncy town hall meeting reconvened last october, and in this new title, from nation books, meltdown. ..

>> and author ideas as to how can recover and build a more democratic, more fair and sustainable economy. thank you for coming this evening and i turn it over to our d.c. editor [applause] good evening. however you doing? you made it inside. congratulations. my name is chris at it as i am the washington editor i it is truly an honor to be here tonight honoring this panel.

i just want to say briefly you should all have a copy of the latest issue which i believe this on your seat and also the book we have put together these are tough times. i have to sell this year. as a system of global capitalism which had been built was turning and turning in a widening area over the last four or five years there was a chorus ofoices that said the center would not and could not hold. many people contributed to this book and our magazine have been making that point* and it has proved quite prescient and i like to introduce the speakers'. to my left, professor joseph stiglitz is professor at columbia university's

[applause] he receive the nobel prize in economics in 2001 for research on economics of infortion and the co-auor of the $3 trillion or more t true co of the eye of iran conflict -- conflict. please welcome joseph stiglitz [applause] to his left is the editor of challenge magazine a visiting professor of humanities at cooper union and director palms research at the sort -- short center and the author o the case for big government. zero jeff? [applause] he wrote the best-selling book these the best-selling author

of nickels and dimes is the award for a price for criticism chip her latest book is this land is their land barbara ehrenreich pplause] and finally to the furthest left bill fletcher originated the call for founding progressives four obama e executive editor of black commentator which is a fantastic website the former president and chief executive officer and a founder of the center for labor renewal. bill fletcher, jr. [applause] and is a lot warmer with 800 people in here. just to quickly say how we will do this, the speakers', ious public shame they will give four or five minute introducty statements.

we'll have a eighth discussion and they will respond for about 50 minutes then we will take questions from the audience which will be submitted by eight index cards that will be passed around and make their way up here. you should be under way by 930 after which will be signing copies of certain books which you can acquire here. [laughter] so please welcome joseph stiglitz [applause] what i thought i would do in this introductory remarkshis talk a little bit of the cause of the crisis. most of the discussion is focused on the problems of loose monetary policy, lax regulation, i want to spend a minute trying to explain why it is that we have those loose monetary policies. the underlying problem wasn insufficiency of global aggregate demand.

at the end of world war ii, there was a worry that we would go back into a depression and one of the reasons for that worry was that there be insufficient demand to keep the economy growing. the reasonhe fed pursued the lax monetary policy was in the absence of that, there would have been insufficient demand. we would have had an economic downturn. the question is why is there insufficiency of global aggregate demand? there are two reasons. first, the increasing inequality in most countries around the world. it is a striking phenomenon as you look in the united states that even though there is growth of gdp, most people are

poor today than there were eight or nine years ago, the median income has been falling and that is true most countries around the world. the reason this is a problem, what we have done is transfer money fm people who expendt toeople who do not spend it. and that lowers aggregate demand. in the united states we tried to get around the problem that the people of the bottom and come was getting a lower in real terms by telling them, don't worry, you can continue to spend as if you do to say we encourage them to go into debt finance. and a sense it worked pretty well for a few years but clearly not sustainable. in the united states what made things worse, was the war. because whathe award did was

contribute to rising oil prices. that meant americans were spending hundreds of billions of dollars per year to import oil. ag and come back in the '70s when this kind of thing happened, there was a severe downturn. it did not happen this time. why? what happened, the fed had low interest rates that fed a housing bubble that fed a consumption boom that enabled americans to continue to consume even though we were spending so much money on imported oil. the result was our household vings rate fell at zero. again, not day sustainable policy clearly. say it is exactly the policy

latin america pursued in the 1970's, the one part of the world that did not have a major crisis after oil prices rose. and evidently peopl studied what they did and they got excited about that finance as a way to get out of the problem of rising oil prices. but they forgot that latin america ran into problems and they had a debt crisis in the beginning of the 19 eighties that led to the lost decade in latin america. that is one reason for is that the asian sufficiency the second reason is related to e crisis that the world faced one decade ago with the global financial -- financial crisis of set 97/98 the reason they split was handled was a disaster countries lost economic sovereignty, the imf

push them into pro cyclical policy is that converted a downturn in to recession and a recession into a depression. if you want to get a feeling of how badly things can be mismanage, unemployment in the central island in indofesia got up at 40% so we have a way to go to reach those achievements. the consequence of this bad management with the global financial crisis was countries decided they would never let this happen again. i talk to prime minister's in both countries that have affected and not affected said we learned the lesson of 1997. one of them said i was the class of 97. the only way they had to protect themselves was to bud up large reserves.

and they have built up literally trillions of dollars, china's reserves by themselves are $2 trillion. they are good for protecting them, but it means that these countries are not spending all of their and come so it contributes to a global insufficiency of aggregate demand. one thing that concerns me is we discuss the details of how we get out of the crisis stimulus, mortgages come the banks, we are not paying attention to some of the underlying causes that got us into the problem with this huge inequality and global imbalances. the way we're managing the crisis right now is likely to lead to incentives for developing countries to get even more reserves making it more difficult for us to emerge from this crisis with a

robust recovery. [applause] >> thank you for cry would like to pick up on that day little bit because i think he is getting to the heart of the matter and i figured we would get to the heart of this in about one hour. i did want to speak it when and if we get passed last prices, what do we do? elah by two plotted a little more starkly that he just did. calling it inequality is not quite what happened. it is really wage stagnation and decline for a very large proportion of population with some increase income in some ve significant increase of incomes for people at the top. much of it, if not a vast majority coming from financial the station through wall

street ceos and stock options and so forth. america has had a low end to society for quarter while especially in historical terms the toys pay the highest wages and it is no longer the case which led to the fact people could not make ends meet and the borrowing became excessive and the savings dropped. so when we talk about solutions, we're talking about ways to get wages up for most americans again. to me, if we get past the crisis, that will be the priority. i hope we have a chance to talk about that because i don't think there will be pure free-market solutions that enable us to do that. very quickly, returning to this crisis, it is not an easy matter and i suspect there is a line out there for this very reason. you should be worried. it is not recession has usual

or recession plus as usual in as many factors, the housing, the crash in the housing market, the credit crisis now a very severe recession that if not stopped will make those matters worse and there is an interaction that could leads to a very severe spiral downward. the obama administration has done remarkably well to come up with a stimulus plan they get it in aid for political achievement may be the a negative we do not need any of those tax cuts and most people do agree it should be bigger but we need to give credit where credit is due of they are slow to coming up with a program to deal with housing i think it is a pretty good progra we will probably need more to stem the default rates, but at was eight b or b+ but i will defer that

discussion. but we need much more serious attention to what we have had so far. having said that, i always feel guilty about thi criticism because i feel guilty because it is hard to criticize the obama administration from where i said after eight years of the bush and administration. forgive me, jeff, with some problem with the clinton administration as well. those 12 years of bush plus rates again before that. i am a little cautious about criticism but i think we really need to look hard at what we have to do and there is a lot that house to be done and we will have a chance to discuss it at greater length [applause] >> i want to say what an honor

it is to me with this distinguished group of pple and my job here is to briefly open up a very big questions like capitalism v socialism and things like that. [laughter] and 2. dodd as if it was not sufficiently noticed, 2008 was the year of the global financial meltdown, that was also the 160 anniversary of the communist manifesto publication. [laughter] who knew that the capitalist would celebrate the anniversary by shooting themselves? [laughter] it is always folly to say this is the end of capitalism. you have to admire it is so dynamic, resilience, it comes back and is terrific and that white and reno said jokes

about the economists that rrectly predicted "meltdown" out of last three recessions. so i am very cautious but for now, capitalism is not working. it is not working anymore. zero [applause] that is why there is suddenly talk of socialism. obama is seen as a socialist and i say with great respect for the man and not mean to hurt feelings but barack obama is not a socialist. [laughter] at the ver least, what we have to shake off at this moment is the religion that americans have been four years and that is market fundamentalism. the marke as 88 the [applause] that will take care of everything for us.

so we can ventilate the all deserving poor will be market fundamentals eventually everything will be okay that has been the quality of a religious belief in this century without of course, of events. instead of promoting self-reliance as it was advertised, it is fostering a collective passivity and our culture. you don't really have to worry about some money inustices or forms of human misery because eventually t invisible hand will come down and smooth all brows into everything. if that doesn't work it seems a simply the alternative to the religious dilution of market fundamentalism is to determine our own destiny as humn beings. two realize there is not

something calle the market that will do it for us. that is the a sense to me of what the socialist legacy is. , the idea, and a simple idea that people can get together and figure out solutions to problems, together. not waiting for somebody to do it for you. of that is really what seems to be so resoundingly inspiring about 19th century socialism and where it leads, but we have a much harder suation than they face in the mid 19th century with the european workers' movements. they thought at that time that industrial capitalism had been a great thing that potentially had eliminated scarcity from the world. the only thing that socialist

had to do was take over the means of production and make sure the stuff was distributed in a better way so everybody had enough. that was the project of socialism. now, 160 years later we can no longer sat back and applaud capitalism for producing an abundance as we look at the world, we have to come to the sad realization that we are lefp by capitalism with less than what we started with. the environmental damage, not only of industrial capitalism but communism, has left us so deeply did of so many resources and in danger on so many friends, i don't think it is crazy or paranoia to say our species faces a threat of extinction. i will wind up by saying.

[laughter] and leave you with that. and is not simply a matter of changing ownership that people own the means of production or something like that, it is a matter of rethinking what we mean by production and our entire way of life and bill can explain the rest. [laughter] [applause] >> what an introduction. good eveni. my thanks to the nation, particularly for providing a forum so some of us can probably say we're socialists. [applause] i was trying to figure how to get my remarks and i started thinking about the observations of the great mid 20th century analyst oliver hardy who commented this is a

fine mess you have gotten us into. [laughter] i want to focus on one question and what has struck me about the current crisis, is the fact that the saying premier long time ago ago, the press are willing to excepted if you look at the average worker in decline since 74 in e eighties in addition to a severe recession, we witnessed the destruction of family farms, foreclosure after foreclosure. in the 199s will not only spend another recessi but until the second term of the clintons administration leaving -- living standards continued to decline. 2001 the recession cost at least 1 million manufacturi jobs with a disproportionate impact on african americans

and chicanos. and this is to ration the growing dependency on credit by working people reflective more than anything else the search for individual solutions to what were systemic problems. ltd. collectiveesistance gathering strong was ultimately taken for granted. with regard to the economy are with regard to the attack on civil liberties beginningith rape and consumption at the top is that those at the bottom are incapable or unwilling to engage in collective resistance to the various pounding as we have received over 30 years. dog get me wrong. there has been resistance within the form of workers with meatpacking, those in the california canneries the poor people organizing in miami or for that matter global justice advocates in seattle 1999 or anti-war demonstrators. the problem is in each case or

courageous example of resistance, this did not lead to a larger sle struggle. part of the problem certainly rest with the crisis of socialism and the prices of many social movements much of which is the related to the growth of neoliberalism. but in the dark days either case they have us over a barrel but this was so evident in thenitial baylor proposal of a three pe document that essentially said people of the u.s., at you are a contemptible bunch that deserve nothing more. in this context the ability of organized labor to rise to the occasion is particularly unsettling and reflex a strategic myopia on the part of those with the movement. yes they respond with a demonstration in the face of a bailout proposal, but too few

other label organizations responded in kind. today come at a point* when organized labor needs to be uniting and moving forward on that engages a discussion that is more remincent of discussions about who will proceed? with the moments that i have left, let me suggest we must careful to recognize while we need policy prescriptions, we also need political will and the mobilization and this is why we tried to demoralize the country with irrational suggestion such as the 2008 financial crisis was due to people of color and the poor exercising the community reinvestment act. were suggestions that the mark is continuing to decline, the stock market, due to obama. [laughter] i just read it in the papers.

political will by working people will be essential to undertake to things. one, compelling president obama to not rreat and to deepen the structural reform. second to uertake self organization ranging from joining labor unions to establishing industrial cooperatives that set the stage for the alternative ecomic strategy. the bottom line is the watchword needs to be solidarity. solidarity among those who must work to live, solidarity for those were the victims of the great gains that is called capitalism. thank you. [applause] >> there is a lot of ground to cover. [laughter] i thought i would start

specific and it news's cycle focused and move to the broader questions as we move down the table. joe, i can you talk about there is so much in the news rit now, what you think of the attempt so far to rescue the financial system? and what are we doing wrong? >> i want to begin by remarking that any of us who have watched what happened until obama became president fe very hesitant to criticize because it is so much better than what happened before. on the other hand, [applause] i think what has happened so far is not as good as it could have been. in terms of financial, there

are two aspects. for while it was very clear we were giving the equivalent of a mass lood transfusion to a patient that was hemorrhaging internally with the foreclosures and we're not doing anything about it. the good news is we're beginning to do something about it. but, i think, it is still very deficient in two respects. the first is the mortgage restructuring is lowering interest rates by doing nothing about the principal payments. these houses are under water very seriously under water. the value of the mortgage exceeds the value of the house and they ought to be restructured. . .

>> and go on with it. we aught to tat homeowners at least as well as we treat corporations. [applause] >> and i think this could be an expedited way of handling the process. the really weak part though is dealing with the banks. president obama was very clear about the criteria dhat were

that he wanted to start lending and secondedly he was worried about the cost, the cost on taxpayers. there's a third criteria that's important. which is as you're going about the process, you don't want to exacerbate the problems that gave rise to the crisis. just -- i'll make one remark about that. one of the problems is that we allow the banks to get too big to fail. and so how are we solving the problem? allowing them to merge to get bigger and making the problem going forward even worse. if we really were focusing on restarting lending, there is a see this would have been done very easily if he had used the $700 billion to create a new financial institution, allow them to lever 10 to 1, which is modest to the 30 to 1.

10 to 1 would have generated $7 trilon of lending capacity. far in excess of what our country needs. so the issue here is not about lending. it's really about saving the bankers. and what we confused was saving the banks versus saving the bankers and their shareholders. and it's -- [applause] >> there is really a very elementary principal that's at stake. this is close to aero som game. the banks made bad loans. they ignore the fact that there was a bubble. the bubble has crashed. that means there are a lot of ba loans out there. they are not going to disappear. one of the fundamental problems is they are pretending the administration that don't want to admit that they make some bad

decisions. and so they are going about this with a fiction that somehow if only confidence could get restored and everything could go on as it was befor the fact is as i said, bad loans were made and there are consequences of that. well, it is close to some gains which means you can make the banks balance sheet look better, you can get the share price up by shifting the losses on to our shoulders. but of course we don't get to see the value of our shares as taxpayers. it'sen. and one the ironies is that lack of transparency got us into the mess. onof the things they are trying to do is to have more nontransparency to get us out. so the real struggle to find out the least transparent way so we

don't know how much we are cheated. so one example that we -- that was done was the proposal that we actually did to ensure $300 billion of citi bank portfolio. well, the insurance has the following consequence. we bear the losses and they get the gains. now what that does is concert a zero sum into a negative sum because think of yourself in positive of citi bank. a mortgage that aught to be reinstructorred to allow a homeowners to stay in their home. there's a small chance that the price will go up if he doesn't restructure and keeps the bad mortgage. if he gs up, citi bank gets to keep the gain. if it goes down, which is almost certainly the case, the taxpayer

bears the loss. so it's a head they win, tails we lose situation. will proverse inctives give rise to proverse behavior? the bankers are in some sense ethically challenged. [laughter] >> but the fundamental problem is that they are responding to the incentives that we gave them. these are institutions that are near bankruptcy. and all over the world when you see institutions like that, what they do is engage in acid stripping. the united states paid out billions of dollars in bonuses and didends, leaveing the institutions weaker as we were poors money into these institutions. well, the problem is that the administration is terrorzed by the world nationalization. and the reality is that there is

a need for more and more money. so the question is how do you get more money to the banks without getting control? well, the only way to do that is basically to get us taxpayer a bad deal. and they've done a wonderful job of figuring out how to do that. so in the congressional oversight panel, review, the first set of transactions an they valued the value of the preferred shares and the other things we got, warrants. when we gave them the banks money. and we got about 67 cents for every dollar. we gave them a dollar, they gave us back shares that were worth about 67 cents. now they are worth much less. they give us some garage. t that w a good deal compared to what has happens

most recent transactions. presis calculations haven't been done, but the rough estimate suggest around 20, 25 cents on the dollar. so to put it very boldly, we've been cheated. the reason is not -- you know, i don't think it'because they don't know how to do arithmetic. i think they can figure that out. i think the reason is if we got a dollar of shares for every dollar we gave them, we would be the controls shareholders. and they don't want that. they decided to give us a bad deal. which means that the deficit will be larger. and that also means this is simply very clear. there are big tradeoffs we're facing. so obama says order to pay for this in effect, his own money, in order to pay for this,

we're going to have to cut back social security. and in effect the magnitude of what we're talking about a few years ago when president bush came to the american people and said we have a huge hole in our social security system. if we don't fix it, our economic and financial system is at risk. the whole -- soci security at that time was about $560 billion less than the bank bailout. since then it's grown a little bit more. still what we are talking about here is the for the magnitudes that we've been giving the banks we could have guaranteed all americans all the promises of social security that they have for generations for the next 75 years. and we have nothing to show for the $700 billion that we put out to the banks so far. [alause]

>> he has a really nice office now. one of the things that is interesting is there seems to be a sort of nexus which is overcoming the influence of the bank. you and i were talking and you mentioned the absence of organized labor. sitting where i was in d.c. the week after lehman brothers failed, it was truly shocking to me the absence o the voice of organized labor weighing in. when they did, they weighed in on the behalf of the tarp. i'd like to hear your thoughts on why that was the case. >> i think that the crisis that the union movement has been facing sort of, it's all came together. what i mentioned before about a

strategic plan that the bulk of organized labor of the leadership found itself in the fall complely uncertain aso what to do in response of this crisis other than to focus all on the election. and use the electionrankly as an excuse for failing to mobilize. and like i mentioned before, the exceions of the new york city central labor council. i tnk people should be very proud of that. but the deeper part of the problem that we see evidence of now continues to be the sense within the leadership this desperate need to be considered a respectable part of the sort of the governorring consensus. and as one labor leader said, we want to make sure that we're at the table, even if we don't g what we're looking for. which begs the question, why do you want to be at table?

is it for a photo op? what's the whole point? i think what we are looking at is a unionism that is grounded in the thought of samuel and others is really crashing right now. >> barbara, you heard a book about collective joy, wch is one of my favorite books of yours. there's not a lot of collective joy to be found right now. i'm cow cross about how you think about from a political level if you were sort of imagining what the kind of ideal political response would be to this. what would that look like? what would apollty and

citizenship reaction to the crisis we face look like were people not so under theway of this sort of passtivity. >> well, i think we have some traditions to build on in this country. we've had the experience, the civil rights movement, the nem mist movement, and the powerful movements, grass roots movements that have -- the models throughout the world really on what they have done. and all successful social movements or partially successful ones have had an element of solidarity, of good feeling were of encouraging not only sacrifice and hard work, and meeting, but artistic expression and, you know, we're drawing on the talents of many kinds of people. i don't know what this is going to look like at this te.

i hear way too much talk about subsistence to agriculture. i'm not kidding. this is how scary it is. it comes up in too many conversation. and it's one thing that scas me to comparison of the 30s. in the 30s many people lived in the land where rural people had chickens, something like that. more and more people are just bringing up these questions in conversation. what can we grow? etet cetera. at this point, the competition is going to be between our progressive types of web site and the survival types of web site. and do we really have something to answer to say that it's different from the survivalist? >> do you think that a lot of the sort of impedes for that

kind of collection action was channeled into the election? that has built into the point that that was an astout point. the crisis hit at a moment where it was most easy to get one over on the whole political structure. because everybody was so preoccupied. do you think that the kind of mobilizati that happened around the election ultimately draws away from that kind of resistance? >> well, that's an interesting way to put it. certainly, what you said about labor and destroying itself behind the -- obama and in some ways surrendering is the natural role. it gives me something to think about. maybe that's true. maybe it's too much a complex that we had going with him.

others here tonight like joe had expressed. we are hesitant to criticize. we have been true out of these years. and yet some very basic questions. i think these questions have to be answered. i throw this out to economist-type guys. do we really want to revive a financial, you know, system which was so dependent on debt and credit i should say. for the reasons that you both illuded to and easy credit was a substitute for decent wages in america. there's a hole house of cards of the hard. are we -- when we talk about recovery obvious jump starting capitalism again, i wonder what we are talking about jump starting. i'd be happy to go to 2007.

but what are we talking about? how sustainable is that? >> jeff? >> yeah. i think it's an important point. i'd like to be a bit of the family grump. i think a lot of these issues are much more difficult than they may seem on the surface. labor unions have clobbered by changes in industry, by conservative government, by think tanks that are very well financed. as you well know, they represent a very small part of the population. i think they can represent the future. i think we have to talk very seriously about how to reorganize them and give them strength. when we talk about rescuing the system, i think barbara is right. i think we need some idea of what a future banking system is going to look like. nobody in truth is talking about nationalization. i'm sure joe will agree with that.

they are talking about a government reorganization. i think maybe i'm misinterpreting. to meationalization is running the banking system down the line. can see a banking system that very much more fragmented than the current system. where we have a plain vanilla commercial bank that takes savings that are federally ensured and can only use those savings federally ensured savings for fairly plain vanilla business loans, fairly plain mortgage loans, can't trade for their own account, and maybe, and this is where i think some form of nationalization maybe appropriate, maybehey should be regulated the way as a public utility. where they are highly restricted

about what they can do, where -- [applause] >> where their profitability is prestricted the way we used to restrict public electric utilities in america. maybe that should be the case p in doing research i follow the case of walter. he turned citi group and the entire banking city into a profit-making industry. and he whacked the heck out of financial regulation. in early '70s he wanted citi group or whatever it was called, first national citi to come a growth company like johnson anne johnson. who was upset? some democrats. you know who was really concerned? walter burns. he led to deregulation opening the roador greed. a word i would like to bring up

in this discussion. just plain greed. after we have our plain vanilla banks we don't want to do away with it altogether. we should have an investment banking community andnd insurance community but there should be more restrictions in terms of capital restrictions and a lot more disclosure. one of the great and i won't -- we can all go on and on about this. but one of the great events in my mind that suggested this extraordinary change in government attitudes towards regulations was that there were no changes after the failure of long-term capital management in 1998. not only requirements for disclosure as i recall. at least tell us how much. under alan greenspan annularly

-- and larry summers, that was no such requirement. now we need to compartmentalize the strategy. with when we think about a rescue plan, we have to think about it in those broader rms. and in a bigger public disclosure than we've had so far. [applause] >> i very strongl agree with jeff. and one of the things that the financial markets pride themselves on and one of the criticism of a proposals to regulate them is that they were very innovative. and that peer is the innovation stopped. what they were very clever at doing was circumventing the regulations, getting around accounting standards so we

wouldn't know what was on the bags. they were so clever at gting around accounting regulations that they themselves didn't know what their own books were like. so they succeeded in decving themselves. that's a real achievement. that's not the kind of innovation we want to encourage. at the same time they didn't do the innovations that they should have done. financialarkets are supposed to allocate capitol and good financial markets should be very small. because it's a means to an end not an end to itself. and yet we prided ourselves about having huge financial sector. 30 to 40% of our corporation profits went into finance. that was a sign of a sick economy. that this intermediate city was

globing up what was being produced in the rest of the economy. so in the end they didn't do things like manage the most important risk that the most americans hear about, the risk ofeing able to stay in your home of market changes in market circumstances. which is why billions of americans are losing their homes. and so with all this debate, there just haven't been enough discussion about what are the social functions which a good financial system should serve and how do we try to create a new financial system as we emerge that will perform the social funks which a financial system should be performing? [applause] >> do you -- >> that's socialist thinking.

[laughter] >> i wanted to make a couple of points. one is let me be clear about what i was saying abo labor. yes, labor has been pounded. but labor representatives 12.5% of the work force. but it also has immense resources and there are decisions that has been made time and again by leaders to not choose certain paths. and i thi that the leadership has to be held accountable for that. and we can -- one thing that we are really good at in organized labor is excusing our inability to break out of paradigm and to try something different. i'm hoping that in in crisis, we'll act differently. our second point is going beyond the issue of banking crisis. i think that we have to talk about what's wrong with the nationalization issue? and specificically i think that ultimately what comes before

president obama is whether he will be the educator and chief. and i mean that quite sincerely. whether or not he will recognize that we will engaged in a ideological battle in this country around planning even within the context of capitalism. and when you add on the environmental catastrophe we' facing, we are being forced one way or another to grapple with the issue of planning. that was the economic crisis. and so the -- [applause] >> and so the question is -- so i think one, we shoul't be afraid of the notion of nationalization. second it needs to be tied in with real oversites so it's not simply creating a bureaucracy. but i think that we have to recognize that the economic crisis ps the environmental crisis necessitates a vastly different way of approaching the resolution. and that means that we've got to win millions of people over to

understand that planning is in our future. the question is who is going to be doing the planning? the far right in very aauthoritarian ways or whether it's going to be progressives? [applause] >> all right. let's ask some questions here from you guys. this is something tt i've heard from quite a few people in discussioning the particularly the kind of acute moment. is theren contradictions saying that there was too much debt available and planning to solve the problem by asking banks to lend again, how will this not creat another bubble, and how do we -- if you look bake on the -- back on the sources that we've had in the last 15, 12 years it was largely stock bubble followed by a housing bubble. what does a nonbubble-driven

american growth economy look like? >> well, let me fibst talk about the seeming contradiction. the fact is that if you have no or inadequate lending, it means that the funds that firms need to continue to produce the working capital that is sort of is the essential life pot is not there. and so then firms have to way off workers and that's a cycle downward. so it's that basic good lending thateff was referring to that we have to maintain. we don't want to start another bubble economy. and that's why it's a little bit disturbing that some of the administrations initialtives seem to try to recreate the kind of financial system that we have before encouraging securization of credit card loans. that seems to be a questionable

kind of strategy. the question of what is going to provide the strong agate demand for the future is the critical question. we don't want it to be a bubble economy. there is really one really vital need that we have or two vital needs. one of them is the problem of restructuring our society, our economy, to reflect the reality of global warming. we've been treating something that's one of our scarcist resources as free good, air. when we change that price from zero to realistic price it means that a l of capital has to be scrapped and we have to build new to reflect the changing relative prices that are created as result of this fundamental change in the structure of the economy. so that is an enormous demand

that i think will keep us doing for actually very many years. there are lots of other social needs that we have poverty both here and abroad that could provide ample bases for strong demand but that will require changing the way we organize our economy. >> and to answer that, we can grow the old fashion way. we can pay higher wages to all people. so they can buy more things. even with delining the wages, the typical male in his 30s make lesses after inflation than the typical mail in the 70s. the fact is we did go with the bubble in the late '80s and

'90s and 2000s. we can build our way out of this. i agree the labor leadership has been extremely negligent. i completely agree. one of the things we did because we havbeen prisoners of this anti-government idol is that we somehow came to believe, and i think barbara was referring that we believe that business made all the right decisions and built all the assets the society needs. well, they just don't. there's good economic theory about why they don't. i think they can be better and broader. there can be broader in business can coordinate, they are going to have short-term turn around. they coordinate the housing needs. we don't have to pre-k system. there are lots of areas where we can build upon. and we do