the size of the federal government and we'll see austerity in some sectors and the public sector will be one that will feel the pain for quite a while. what scares me here is that they share the hubris that they can create jobs. congress isn't taking enough action to create jobs. congress creates patronage and does not create real jobs. the public sector creates job and the government has been a gigantic drag on this recession, and i'm hopeful that that will change regardless of whether there's a change in the administration or not. i'd like to open the q & a period to the audience and please raise your hand and we'll

pass the microphone to you. please stage your name and your affiliation. >> paul paige. i'd like to ask each of the panelists what is your forecast for gdp in the second quarter and what do you think that will mean for president obama's re-election or mitt romney's election in november? >> i didn't bring my green eye shades so i'm not sure i can make an accurate prediction of second quarter gdp growth. it's not going to be very good. we're around 2%. i don't think we're going much over that any time soon and it certainly doesn't seem likely that we are. what does it mean for the presidential election? it mean, the figure that i looked more carefully at these days is the monthly jobs report and what that's going to tell us about the presidential outcome.

i think barring a real collapse and contagion, we'll stick around where we are now which is 2% and the jobs growth of 100,000 and 200,000 per month with the unemployment rate staying 8.2, 8.18. in that scenario it's a 50/50 shot for another candidate and the debates and ad spending who has been outspent more than the other. i'd probably give a very tiny edge to president obama in that scenario. if we get the worsening european crisis with the worsening gdp and the job gains that are closer to zero. for really starting to tank by summer into fall.

jones see that that will be, the grinding and the tornado situation of growth and jobs is the likelihood in which it's a slight toss-up to the obama edge and in terms of other things that can change the dynamic and what the administration wants to see is a big, sweeping solution to the european debt crisis which involves the pooling of sovereign debt which involves deposit insurance across the banking snm europe and something that gives market confidence that there's not going to be bank fail you ares and sovereign debt failures. if something emerges after the g-20 then we get the grinding 50/50 and obama losing. >> second quarter between 2. 3%. that's what the economists are

now calling for. people don't focus gdp numbers that much. by the time we ghaet number we'll be into august and the monthly important numbers will be much stronger and the stock market and these things will be important. i kind of like ben's baseline scenario which is the -- >> 100 to 200. >> but the big problem for obama is the risks around the next are not symmetric. i can think of way more things that can go wrong than can go right. with the dow going to 15,000 and the job growth continuing for 50 a month. you can see the civil war in syria and the election in mexico a and, that folks in the new faith

for his -- recoveries after crises have been dreadful affairs and every leader from 2008 to 2009 has been replaced and for obama to survive that phenomenon would be amazing. it's not surprising that he's rung a very negative campaign, trying his fwoeft define his record as opposed to someone who should not be running the country. that may have worked a while because romney went through a dreadful primary where the party doni damaged its own plan and people's negative impressions of him and he's closed the probability gap. president obama is in trouble because the main thing he had working for him is slipping away. again, my forecast is an economy good enough for intrab through,

and i can see so many pieces that it will go back. >> i thought president obama was a shoo-in for a second term. he's one of the most intelligent presidents we've ever had and today i think he's already lost the election and this singes on romney being able to keep his lips sealed from now to election day because the people are not going vote for mitt romney. the public is not in love with mitt romney. he's a hard man to develop warm feelings, but just like president obama there will be a vote against the incumbent president and it's primarily a vote against the economy. i saw a poll, and i apologize to the pollster because i forget who did it, but it asked is

president obama a doer or a talker? over 50% said he's a talker. we're in a crises that's like the civil war. abe lincoln wasn't worried about a second term during the civil war. he was focused on restoring the union, and the president was not focused on helping the economy and he's focused on the second term and the public realizes that the stimulus, too, that this american jobs act on this to-do list which reminds me of jarjar. it's so small. they're disappointing him as a leader and they're not taking bold steps. i think the legend has been decided for the economy. >> there's a telling story inside the journal today talking about obama's speech next week

in ohio or cleveland maybe? i forget where he's giving the speech, but it's another speech to frame the economy for 2012 and talk about his prescriptions versus mitt romneys and the white house advisers quoted by saying the campaign pushed us to come up with new initiatives that we can count on to jump-start the economy, but we don't have any. we've thrown up the stuff to the hill that we think will work and the stimulus and hiring more teachers, cops and whenever. a few things that laughs at the administration for proposing and there's not much we can do now and although you can certainly make an economic argument that you can do that and there's an absolutely rational case for stopping the drag on the economy which is the elimination of

public sector jobs and the economy can create jobs and they're going do it and the frustration people so a, look at congress. people want a president who can run rough shot over congress, and he says what i'm going stand up and congress with the about thor not make -- and he wants to make increases in deficit reduction to running against congress and there's never been a consistent obama doctrine of this is what i'm going do, get out of my way, i'm going get it done. people don't feel that strength from him and they don't feel leak they have all of the answers to getting the economy moving again and that's why he is where he is which is very

much in danger of losing. >> one of the great virtues of this country most voters are not economists. unfortunately when you're trying to convey an economic argument like, you know, at a period like this when the federal reserve is limited in its ability to stimulate growth it's up to the fiscal authorities and there should be more public works and people aren't buying it. you had a poll -- and asked people what would be, you know, would be the most effective way of stimulating the economy? 47% said infrastructure spending which suggested paul crudman is not getting through to these people, but the point is that voters are not expected to do the math and the hypothetical economic policies are supposed to work. listening to obama say growth would be y instead of x and it's

not a winning slogan. people can't judge the policies if the drugs or doctors administer them and they look at the economy and they've seen the drugs that the administration is administered and they see it is not getting better and they can construct models to explain why it's not getting about thor and it's sht that enough was done, but voters are saying show me. we vote on results not on hyping on the sises and that's the major issue that obama will struggle with for the remainder of the question. >> a question? >> i have a very simple question. i read a book about obama, and i am on the list of the white house press room. what is the difference in the economical promises between obama and romney?

>> they're pretty stark and straightforward. >> what romney wants to do is propose taxes and he wants to reduce regulation and i don't know exactly, he's got a number of proposals for reducing what he says are these questioning regulations on small business. he wants to roll back the dodd-frank financial reform measure that somehow would increase lending and banking ability to help the economy grow, but his essential argument is the 20% across the board tax reduction rates on businesses and individuals and also somehow capping government spending as 20% of gdp? is that what he wants to do? i don't know how he figures these numbers and they don't add up to me, but what obama wants to do is and he wants the

highest salaries to lapse and extend the bush tax cuts and rest of corporate america. he essentially wants to keep the regulations in place this we have and that's just the basic argument between democrats and republicans and as far as i can remember and higher taxes versus continued regulation. >> and that's a laundry list. is any of that realistic and possible? >> that romney can accomplish? >> uh-huh. >> a lot of it depends on the makeup of the next congress. i doubt they'll pass the across the board tax cuts. he had to propose that stuff in order to be palatable to the electorate, and i don't think there will be any mandate for him, should he win, i don't see a sweeping republican take over

the senate and it's very likely for the republicans to take the senate and the house will probably stay that there's a chance that a lot of what romney has accomplished. >> everyone knows romney is a moderate and he's pretending to be a conservativconservative. can he accomplish anything? sure. it wasn't too many decades ago that the difference between republicans and democrats were not that extreme and there are still a lot of moderates who are afraid to come out because they don't want to get hammered by the tea-party types during the election election, but beyond that it's a whole different question. it's the socialism during the government and against central planning and he would give the economy more leverage. he's not anti-regulation.

he's anti-oppressive regulation and it's a good thing. i think you can get people on both sides of the aisle to say costly regulation is a good thing. he's got a better energy policy than the government. he tried to get winners and losers. he's declared war on the oil industry which is one of the biggest employers in the country, and one of my favorite websites is the u.s. bureau of labor statistics and i recommend it to everybody because you'll learn about your neighbors and about this country that you never realized. 6% of our workforce is retail sales people and cashiers, but if you read the bureau of labor statistics with the occupations

are not just computer and hardware is not extraction and the financial extraction are under attack by the obama administration and so, why do we want to have a war against two of your highest paying areas of the economy. it doesn't make sense. >> there have been more oil and gas permits given by this administration than the previous? last time i checked those were the statistics and i don't think you call it a war when you have an industry that essentially tanked the economy and you have the casino-style bets that you would regulate it. you can argue that it was regulated incorrectly in some areas and we can revisit those pieces of dodd-frank, but i don't know that we're killing the banking industry. >> he started off by saying

romney's moderate. i think it's ironic that a few years ago, if romney and obama, or non-alcoholic beer to discuss how to fix the problems and they can work something out, and i think they're not that far apart. think about romney, for example, he owns homes in three states none of which he will carry this fall. he was born in a state which he did not carry. he is simply not your caricature of a red state republican who wants to slash all government and if you read the original document and the 200 last fall and it's an impressive document of careful and wonky more than anyone else in this room stuff with sensible proposals and it didn't come up when he needed to

essentially meet and raise his opponents on how aggressive he would be on tax cuts and more of what you would consider more radical came out of the heat of the campaign in his commitment to replace ben bernanke. he comes out with often types of policies that would appeal very much to independents. health care is the most obvious example. you cannot see light between obama care and romney care other than obama care is federal and romney care is a state program, and i suspect had romney been president four years ago wield have ended up with something like obama care. the extent to which the evolution toward the right which took place during the primaries sticks with him, and i think the litmus test will be the extent which he embraces the paul ryan budget. when paul ryan put out his first budget a year ago romney treated it like nuclear waste.

he treated it like as tepid a welcome, and a year ago he's calling it promising and saying it should have been implemented area. jack ryan is like our jack kemp. they want to see his ideas and in place and we don't really care what our next republican president economic plan and he only needs five fingers and the ryan budget is the romney budget. it is the big question because the differences here that the type of budget and the romney accent with the pressure from the more conservative side would have produced versus this budget and those are significant and that's something that we'll watch quite closely. i suspect what we'll see after romney is sworn in is something

that he planned and romney is not as far to the right as he himself makes it out to be and he sees it like a negotiating document and he will also sees negotiates document. the principle of what he's aiming for is more important than the letter. democrats will still have at least 41 seats in the senate. the republicans will have to deal with the fact there's only so much they can do without being filibustered. >> thank you. >> i have a question about what you might see as a bright spot or some bright spots in the economy. there's a lot of focus on what's not working and a lot of negative. what do you see, all three of you, as something we can maybe look to with some optimism. >> oil and gas, eric. you guys are doing a terrific job. actually, without joking, one of the major structural stories of the u.s. economy the last three, four years has been the amazing

discovery that prices work. if you raise the price of oil over $100 a barrel, amazingly we'll find more of the stuff. natural gas, of course, it's been said before, but it is true that it's a game changer. amazing progress has been made on the energy front. one of the reasons i worry less about oil price spikes less than we used to is because we don't import as much as we used to. a few years aerks the ceo of bp said, i think, he will never sell as much gasoline in america as he did in the year 2006. i mean, there is a secular decline in our consumption of fossil fuels going on. that's an unmitigated positive. >> i also think it's possible to overdo the pessimism and the negativism and the america in decline argument. the numbers are not negative right now. the economy is growing. jobs are being created. 4 million over the last 27

months. you know, it is not true to say the private sector is doing fine. it's not doing fine. but it's not doing terribly. in some areas, it's doing quite well. there is a lot of uncertainty that's holding people back in terms of hiring. and europe is a big concern. it will continue to be a concern. there are paths, there are solutions available to them should they avail themselves of them. they're also not enormously complex. they just need the acquiescence of the germans, in particular. if we could come up with a more cohesive union and shared risk, you know, pooling, there's a path for europe to be solved. if not solved, at least moving in the correct direction and restructured in a way that's sustainable. that risk gets taken off the table. you have an american economy that has a lot of dynamism behind it. there's a lot of areas where

jobs are being created. we're not in this disastrous, everything is horrible type of economy. we're in a painfully slow recovery, as greg has said. it's frustrating. it goes in fits and starts. we've been through these things before. we tend to come out with stronger growth. there's every reason to think we could do that again. i feel like we're in this era where we just go from, you know, things are getting a lot better to a few weeks of bad headlines and we're in the tank again and everyone is jumping off bridges. there's no reason to go to either extreme. there's a million reasons why we do. a lot of it is media driven. the underlying data does not support a case for catastrophe and crisis and return to, you know, another recession and depression. it supports a, you know, slow growing economy that's adding jobs. one would assume will find a faster pace, you know, going over the next three, four, five years. >> we're on the road to energy

independence because of advanced scientific -- scientific advances. it will help our country in ways too numerous to counts. the other thing, this hurts the president and it's not his fault, but we're in an era of creative destruction. if you go to your local supermarket, you'll probably check yourself out at a kiosk. that's a good thing. it's efficient. it's fast. it saves the supermarket money and accounting and tracking in the warehouse. it's bad for the employment. i think in 2011, according to the bureau of labor statistics, my favorite website, there were 3 million cashiers in this country. there's displacement there. the advances in robotics are just astounding. if you do a google search of james bond theme and

quadracopter, you'll see the most amazing display of robotics from a team of students at university of pennsylvania that really is the -- you know, it's the calling card of a revolution. what these guys have done is they've taken the x box 360's kinect technology and created vision for robots. it's quite possible you can have robots in the fields picking fruit within a decade. that's a bad thing for the farm workers, but it's a good thing overall for society. we just have to learn to adjust. it's a very painful adjustment because people who are undereducated are going to have a much more difficult time finding gainful employment in the economy. no president can control that. but i'm optimistic about these developments. i think in the long run, they'll work out for the better. >> we have a question in the middle of the room.

>> i just wanted to know what you see, if any, is the major economic impact of the aca being declared unconstitutional or being held up and if it's going to be immediate or in the long-term, meaning prior to the election or after the election. >> we get into a lot of partisan arguments about that and the idea that if it's thrown out entirely, that lifts a cloud of uncertainty over job creators who aren't hiring people because they're concerned about the cost of ensuring them. you know, i think that's probably not entirely accurate. you know, there's also the question if it's a split decision, does it somehow create deficit reduction that then is beneficial to the economy? you know, i don't know the answer to whether it has a huge impact on the economy right now. i don't think it does. my guess is it's fairly minimal. it will have a huge political

impact. it will invalidate one of the president's signature achievements. it will be a major negative political story for the white house. whether it has an immediate impact on the economy and job creation, my guess is no. >> yeah, i deplecompletely agreh what ben was saying. it just depends partly on whether the entire act is struck down or just the individual mandate. if the entire act is struck down, one of the provisions was a medicare investment tax that's to come into effect next year. that is actually one of the pieces that makes the fiscal cliff so steep. if that's invalidated, the fiscal steep won't be as bad. >> i think it will be very good news for the economy it the whole law is struck down. the conventional wisdom on wall street is that the law will stand. conventional wisdom among attorneys is that the law will stand. i'm unabashedly a capitalist. i grew up in an era when there

was no health insurance. i was the eldest of six. we always had the doctor at house. we managed to survive. we were not rich. i think a capitalistic approach to medicare is the best approach where you spend more out of pocket and you have maybe catastrophic insurance for the big stuff and you negotiate with the doctor for your treatments and you don't go for silly treatments that you may not need in the first place. we all know what they are. i won't embarrass the medical profession. with insurance, we're being treated for things we really don't have to be treated for today. that jacks up costs. so i think the best way is to get back to the nation's capitalistic roots and get away from the socialism. >> i think we have time for a few more questions. >> i'm with the think tank third way. the congress and president just signed into law the jobs act, and it repealed a number of financial regulations for small

companies going public. i wanted to hear your thoughts on that as well as facebook's ipo. >> facebook's ipo, my initial thought on that was that it was bad. it didn't perform well. you know, $38 to $21 or whatever it is now. i think we joke about facebook being, you know, overpriced and overhyped and all that stuff. to some degree, you know, it's poor performance and negative headlines surrounding it. it impacts the market and general psychology and people's feelings about the market, which in turn are a major factor in the presidential race and in electoral politics in general. . the direction of the dow matters in terms of how people wind up voting. the jobs act, which, you know, is intended to allow crowd