will look at recent presidents at the midterm point and we will discuss the european debt situation. "washington journal" is next. host: this is video from about 18 hours ago in central london, video from yesterday's street protest over the tax increases and kurdish government budget cuts. could it happen here? could such violent protests have been here over a potential budget cutbacks -- budget cutbacks? the numbers are on the screen.

we want to hear from you. we set aside our fourth point for you this morning on the "washington journal" to get your view of if such violent protests could happen here for college students. 628-0104 and you can also send us a tweet. or an e-mail. this is from the "new york times" in london.

a little bit more from the story -- other violence continued into the night with demonstrators trying to smash their way into the treasury building at the heart of the white hall government district with makeshift france and shouting "-- with makeshift rams and shouting "we want our money back!" of

that is a little bit from john burns in the "new york times" this morning. could such violent protests have been here? we want to hear from you this morning. -- could such violent protests happen here?

we want to hear from you this morning. you are on the air, where are you calling from? >> arm calling from collinsville and illinois. the only think -- the only thing americans care about now is shopping and navy fast food. and we just do not care. -- and maybe, fast food. we just cannot care. we put up with anything, higher taxes, lower taxes, the turmoil wars that will never end. we are done as a country -- each will wars that will never end. if we are done as a country. host: here is a little bit more from john -- john burns article.

our next call is on the republican line from westminster, maryland. go ahead, john. caller: i thought it was curious. i noticed on c-span you have the parliament on -- i think it's every wednesday will monday. i overheard their dialogue.

also, in italy, they had this thing being -- the same thing with the increase in education. i do not know if it was a "washington post" article or not that i saw, but i found it curious that european students are so engaged in our government -- in their government, and these are students. i agree with the democrats caller, there is just so out with -- so much out of the that we have. -- apathy that we have. they could increase the cost of any program in college and i do not think there would be unrest in our care -- in our country. host: the next call comes from mobile, alabama. go ahead, carol, on the independent line. caller: i have to agree with

both the republican and democrat in this. even though i do believe we could have some rights in the streets, as we have had with the run-up to the iraq war. unfortunately, our government does not listen. it is unfortunate, but that is my feeling on the matter. thanks. host: new york city, nicolas on the line. caller: thank you for c-span. i think there is enough social welfare in the u.s. to stave off any such kind of rights. but are not sure there is enough social welfare going to mexico and those coming from south of the border into this country that could not cause us some problems going forward. i have two or three quick points. the differences between the parties, the left and right, they're perceived differences.

the power elite have successfully divided and conquered. we now have four people and the term "mittal plaze pour" on both the right and the left. you have people -- the "middle class poor" on both the bride and the left. you have people on both sides 80 each other. while we cannot and by the -- we cannot buy the things, those things we can only imagine. i do not know if you have ties to any of the networks, but i think there should be a section in the news every night "let's do the math" where it is almost like our remarks, and you go in and fact check. you could have mitch mcconnell

and john vader on the one hand -- drawn gainer on the one hand -- john boehner on the one hand -- host: nicholas, is it enough to get you out to protest? caller: when you have enough argumentation, there is a fact check out there that 97% of small businesses do not earn more than $250,000 per year. there is this argument that has been put forth by the right -- and i can also understand criticisms by the left that the tax break for the rich -- by can look at the faces. -- i can look at the faces. host: we will have to leave it there. tom from pennsylvania. will these protests have been here?

-- happen here? caller: the public civil unrest as it applies to the public, the majority -- in greece, you have the students protesting the raise in the second for their education in greece. the majority of those are being impacted by their pensions. in america, what is going to impact the majority of people is energy. you can see gas is going up now. i think you will see civil unrest in america when energy prices become something that start to struggle americans. host: enough to get us out on the street? caller: i think it will happen. i think it will happen when

people cannot afford to drive to work, cannot afford to heat their homes. host: i want to assure you some figures. a couple of these facts are from the college board. this is average tuition in u.s. public universities. and that is according to the college board. financial aid for undergraduates, currently -- the student loan debt for undergraduates, the average debt for u.s. college since, $24,000. that is of 6% from last year.

robert on the independent line. could such protest happen here? caller: absolutely, with what we have seen with george soros -- george soros and anti- stern. there's no question that a point stern.anti- sterandy there's no question that it could happen. host: elizabeth, a college student in washington. can you give us an idea of what kind of tuition you pay every year? caller: it is exceedingly strangling everything i do. i go to a community college. my tuition exceeds 7 $900. i am $75,000 in the whole former education now and they want to

cut social security. can someone please explain to me why the jails are being paid with social security money? instead of just stopping the checks, they trade overpayment and they pay the jail $400 within the third -- the first 30 days and $200 if they do it within the first 90 days. no payment after that. have the .pdf. that is ridiculous to me. host: could you see yourself out on the street? caller: absolutely. we need to unite, though, in love and not fear. host: this is from chuck in west virginia. and this is steve in kentucky.

the next call is from greensboro, n.c., deborah, a democrat, you are on the air. caller: i hope it does not happen here. i truly feel that the elected officials, whether it is local, state, or in general, were to do their job and we could get back to where there is more equality and the money is needed to go where it needs to go, i do not and that would happen. but i would also like to make a comment. i would like to construct a criticism. i would like to ask, or suggest, that "washington journal" would have just a little bit more in depth on what

the gop are doing. i'm not speaking of this because i'm a democrat. there just needs to be a little more equality of what is actually going on, like the 9/11 response that was voted down yesterday. if c-span and "washington journal" could put a little bit more of what is happening when the republicans are just saying no to anything. i have watched your show for 15 years. thank you for the "washington journal" and for the show. host: thank you for your suggestions. next call from north carolina. what do you think about these protest? caller: i think if we continue with this mentality it could happen here. you have a bunch of students wear their free ride has been paid and they are losing this entitlement that they think they deserve. they're destroying everything because they do not get their

entitlement. we are getting an entitlement mentality here, too. people think they deserve other people's money and what other people work for. you listen to the scholars and they are there. we should take it from the rich, the rich, the rich. the rich are people who, by a stint of their work and their minds, their intelligence, have made something. 80 hours aly work towared week to get to where they are. i do not deserve to take anyone's work. that is slavery to me. we have this entitlement mentality in this country. host: let's leave it there,

shelley. the pictures we're showing you, the video is from bbc. the still pictures or from the "daily mail." this picture, of course, or one similar appeared in nearly every newspaper of prince charles and camilla. the next caller is from bobbi in baltimore. where did you go to school? caller: right now, going on line at the bride. -- devry. host: how much attrition you pay? caller: about $2,000 per course and 35 credits, so you can understand how much that costs. being a recent undergrad in 2008, you can understand why people aged 30 and under are under so much stress.

and we do not believe in the causes that this country will give you. the other people that call in and talk about entitlement, i have a system -- a sense of entitlement because i did what i was told, and the people that amassed a bunch of money, they did what they were told. they went to school and got a post graduate degree, etc. but there are also people who have entitlements because they theire their world past joh-- wealth passed down for generations. host: are you getting financial aid? caller: of course. [unintelligible] suffering budget cuts because i came from a public service background.

host: what kind of dead you think you will have by the end of your schooling? -- what kind of debt do you think you will have by the end of your schooling? caller: who knows? .'m already at $40,000 or more and i did not waste time. host: is it enough to put you out in a protest on the street? caller: you cannot have firearms out there. in america, it is totally different. if americans get out there, i think a lot of people will be afraid for their lives. host: we're going to leave it there. this next call is from very in brookville, ohio. caller: i think it definitely could have been here in america. where there is a private federal reserve system totally inflating our money and pretty much pain

growth in us by making us pay -- bankrupting us by making us pay taxes to international entities. host: phyllis is next. phyllis, you know the rules. you've got to turn down the volume. i will come back to you. this is mike in utica. caller: this is the problem, we've got republicans out there and if you have not learned from the bus, is strictly for billionaires. and these guys want to pass ... more -- pass out more entitlements and tax cuts to the billionaires'. everybody else is getting their brakes. the billionaires are getting their brakes. if we want anything, these guys

are shocklee for billionaire tax cut and it is wrong. -- are strictly for billionaire tax cut and it is wrong host: all right. this is about haiti and its election. this is deborah santelli riding out of port-au-prince. -- debora sontag renting out of port-au-prince. markets in dallas, what do you think about these protests and you think they could happen here?

caller: i'm surprised it has not already have been here. americans are getting sick and tired of everything going on. .'m an independent i'm not against republicans or democrats. i saw what c-span showed the other night and it literally sicken been -- sickened me. host: here is a tweet from dennis. i want to remind college students, we have set aside a special line for you. we want to hear from you 202- 628-0104.

from the hill -- patrick, a democrat, orlando, you are on the air. go ahead.

caller: i think it should happen in this country. i think protests should happen in this country. unfortunately, we have a problem condoning any aggressive descent, -- any dissent, especially with an aggressive agenda. there are people that work that gets whatever they need and there are other people that inherit their money. this is under $50,000 already. these are people fighting over $20,000? by the time my friend is done with his degree he will be $50,000 in debt. the only thing the media condones is conservative

agendas, like the tea party. you give every hour of the day to voice their descent. but if you got code pink on there or some other progressive party, you write them off as crazy. we are supposed to condone everybody's descent. host: from the politico this morning, the deficit summit on the cards. -- not in the cards.

that is in the politico this morning. this is in the "washington post" in a column, a financial writer. he is writing about max baucus.

and this is how steve pearlstine concludes his column today. this is the "washington post" and steve pearlstine's column. the next call is michael vick in daytona beach, florida. -- michael in at daytona beach,

florida. where you go to school? caller: i go to college, state college. host: what kind of tuition are you paying? caller: i am going to school on grants and loans. by may 49-year-old parent. i decided to go back to school. i'm trying to better myself. we cannot come out of poverty if you do not give us a chance. i am trying to come out of poverty. i think this is totally wrong. host: city enough to get you out on the streets protesting? caller: yes, it is. i do not know what i would do if i could not get an education. what would i do for me and my

child? host: what kind of agree with you have when you -- what kind of debt do you think you will have when you graduate? caller: probably about $50,000. i am in my second year of college. i do not see myself getting through school without entitlement programs from the government through the department of education. we are trying to do better and trying to come up out of poverty by educating ourselves. i have decided it's to go back to school. i was receiving unemployment. now they're talking about trying to take away entitlement programs. that is just not right. host: thank you for calling in this morning. i want to read you two little bits of columns from the "new

york times" this morning. this is paul krugman on the tax deal.

that is paul krugman. at the bottom of the page is david brooks column .

this is david brooks, column in the "new york times". next call, go ahead. caller: it is about a week after we were warned what we were getting into here. we were talking about getting a 3% tax cut for people like paris hilton. i think is kind of ridiculous. if we look back on history, in eight years of ronald reagan, we

tripled the national debt. then when cheney and bush got in there, cheney made the famous statement that ronald reagan proved that deficits don't matter, and they do matter. if obama would do what reagan did and triple our national debt, i do not think we would exist as a country. i some point, this money has to be paid back. host: thank you. this is an e-mail from paul. chris is a college student in columbia, south carolina. do you go to the university of

south carolina? caller: that is correct. host: what are you studying and how are you getting through school -- loans, parents, your own money? caller: i'm studying international trade and i'm paying my way as a i work. there are quite a few high school-age students [unintelligible] and the thing about the u.s. is so many of the parents have given students the idea that all they have to do is obtain a piece of paper in reference to a degree and they would be ok. there would be a job waiting for them. that is the perception here by sold many individuals -- by so many individuals that are high school age and even in their 30's and 40's. that is not the case.

they're just trying to get a degree that will allow the least study hours ande of the hour that will not give you a job that is a livable wage. it is something so misunderstood here. and the other countries that we fall so far behind, they are not going to school strictly for a piece of paper. they are going to school for an actual understanding of what is taking place in their backyard as well as others. and they are being productive in making those things happen in their backyard. host: thanks for calling in this morning. from the college board, average tuition and u.s. public universities --

roberts, a democrat in davenport, iowa, what do you think about these protests? do you think they would have been here? caller: i think this stuff is getting ready to hit the fan. if you go back to the clinton office, there was a surplus. since then, they have started two wars, run of the debt. if they have had like a party

and after they had their party that now we are going to have to start cutting the budget. they will come in and social security, start cutting their. cutting social security 20%, 30%, health care and all the rest. once people start becoming homeless, they will not have any chance. i protest every chance i get. -- once people start becoming homeless, they will not have a choice. i protest every chance i get. in the 1960's they would protest. we have been added at the time that if you are afraid to die, adage at -- we had an averag that time, if you are afraid to

die, then you do not deserve to live. host: jim, a republican in allentown, pennsylvania. what do you think? caller: if you look at the film loop that goes over and over again, and watching a lot of these young girls popping and smiling and laughing, just like the daveed trio. a lot of them are just having a ball. it is like being at a grateful dead concert. a lot of them are just following the crowd. but they are doing a lot of behavior is that t party has already warned -- always warned of. people are smashing the windows at mcdonald's and rolling over cop cars.

we've had protests, hundreds of people waving mexican flags and conform tohat we'v their culture. that stuff is already happening in our inner cities. the conflict is going to be racial. there will be a balkanization. it is between mostly blacks and hispanics in the prison systems. they're fighting wars in there. there are major race riots in high schools across the country. they had to ban the american flag because mexicans do not want to see it. host: all right, jim, can you bring it to a conclusion?

caller: we are bringing -- being pulled up to the left, as bill marcell says. in england, they are rejecting socialism and we are adopting it. host: all right, we will leave it there. here is a tweet. and in the "financial times" lead editorial this morning --

that is a little bit from the " financial times" lead editorial this morning. the next caller is from texas. albert, please go ahead. where do you go to school? caller: i go to texas a&m. host: are you getting through school? caller: i am using loans and my parents gave me about $100 per month. i am a sophomore. i pay about $8,000 per semester. host: now give me your opinion on the budget protests in england. caller: the fact is, even though we are paying loans, they are actually getting a lot of their

money subsidized. that is basically what they are doing is raising the rates. i do not understand why they are protesting anything. i understand that people get upset here with the fact that we have high tuition rates. the fact is, is what the gentleman from have to bring it was talking about, socialism is coming here. -- the gentleman from pennsylvania was talking about, socialism is coming here. i am an independent voter, but i'm also 80 party supporter. i voted -- i am also a tea party supporter. if you look at the laws, there are things we do not understand and the reason we do not

understand is because nobody pays attention to the constitution and actually reading it and calling it the way it was intended to be. also, you hear people talk about republicans this and democrats that. this has been going on in both parties since the 1900's, and a lot of people are ignorant of political history. i am a double major between history and political science. it is amazing to me how many people do not know even the cost 100 years of history. host: we will leave it there. thanks for calling in this morning. "washington times" --

riverdale, ga., independent line is not there. it will go to our last call on this topic in baltimore. caller: good morning. if there is any question that

there is going to be violent protest, you only need to listen to the number of callers calling in to c-span this morning who are advocating being in the streets. we have reached a moment and are we going to figure our way out of it? countries in europe are deeply slashing their budgets. we have the dollars coming from china. what is going to happen in the streets with illegals, students, the unemployed, the 99 years? thanks host: for calling in this morning. -- host: thanks for calling in this morning. in the "new york times" --

this is a lawyer with the justice department.

again, this article is in the "new york times." coming up in about 45 minutes, we will look at president obama will.fway grade, if you we will look at him two years into his presidency. but first imam discussion of the trade deal announced between the u.s. and south korea. >> new orleans judge, sporty as it is only the eighth judge in u.s. history to be removed by

the senate. watch online at the c-span video library. it is washington your way. fourth amendment rights and illegal search and seizure radio -- c-c-span's span radio's supreme court cases. >> there was no one that asked for a search warrant. no record of a search warrant. >> you can listen to it on 90.1 f m in the washington area or at c-span.org online. c-span's this book is being offered directly from our publisher to the viewers of a very special price, just $5. this handsome, hardcover edition is the first book to tell the story of the supreme court through the eyes of the

justices themselves. the 10 original c-span interviews with current and retired supreme court justices, including chief justice john roberts, steven briar, sandra day o'connor, and sonia sotomayor. it is rich with history and tradition, with 16 pages of photographs, the killing the architecture and the history of the -- in detail in the architecture and history of the landmark building. to order copies of "the supreme court" at the very special price of $5, go to c-span.org/books and be sure to use the promo code c-span. >> "washington journal" continues. host: now on your screen is a wooden reinsch, president of the national foreign trade council and he is here on the wall "washington journal" to talk

about the u.s.-south korea free trade agreement. why has it been chosen now to promote and push forward this trade agreement? guest: it is partly because of export initiative. they decided to increase exports to increase growth, which is right. correa is a big market, and a good opportunity. it is partly for political reasons. korea is in a difficult part of the world and cemented the relationship is important. economics is always present. -- is always present. and frankly, it is quite defensive. if that goes through when we do not do that, that means our major competitors in the telecommunication and manufacturing will have a huge advantage over us. host: what is the status of this agreement? guest: that is a good question.

the agreement was signed in the bush administration. aret is being negotiated now i some things to make it more balanced. they are scrubbing it, putting in more legal language and it will be submitted to the congress next year. it is eligible for what is called fast track. once the president formally submit the bill, it cannot be amended. it must be voted upon. there is no filibuster opportunity. what that means in practice, though, is that this is a series of long negotiations between the president and the congress over what he should submit. they will say, if you submitted this way, we will not pass it. if you submit it this way, we will. host: why, in your view, has its -- is it important to pass this? guest: ago produced jobs and growth.

we have been a slow-growth economy and have been for some time. if we want to grow and create jobs, we cannot do it any longer on the strength of the american market. we have to become a trading nation. these agreements -- not just this one, but others as well -- will help us do this. this will increase imports by about $12 million. host: where you get those numbers? guest: from the itc and others. we will see. there is 20 years of data from numerous places that suggest that companies that engage internationally, hire more people, pay them better wages, pay them better benefits, they go broke less often. i think that it is incontrovertible.

host: the numbers are on the screen if you would like to call in and participate in our discussion about the u.s.-south korea free trade agreement. i guarantee a lot of our callers nafta.ring up naphth what has nafta done for our country? guest: i think it has increased trade between the u.s. and canada and mexico. it has created jobs, but certainly less than what was promised. it is always less than what was promised. it produced fewer jobs than was promised, but was not as bad as ross perot said it was going to be. i would say it is a necessity in

a globalized world. the political dilemma is that the people, who get the creative jobs are not the ones who lost the old ones. -- who get the created jobs are not the ones who lost the old ones. you have these people who lost their jobs and they are not the winners. we need to deal with them successfully. two host:-way trade between u.s. and south korea -- what kind of exports to do we send to south korea? guest: now, a good amount of agriculture, pork, commodity products -- brains and things

like that, but not rise. -- grains and things like that, but not rice. we do send them beef. manufactured products, machinery, and a growing amount of services. $7 billion in services, health communications services, audiovisual services, movies, financial services. host: how does the u.s.-south korea free trade agreement change agriculture? guest: it will require -- both of us, but mostly them because it is lower tariffs. commodity products, -- there will be someone on the phone who will disagree with me, but in general, a soybean is a soybean. if we are more competitive, we will sell more sorbian.

if they have -- and we will sell more soybeans. if they have to reduce, we win. host: what are the advantages to south korea? guest: lower tariffs on our side and what will help them is mostly manufacturing tariff reductions. the significant point of contention, if you will, in the last couple of months, is where they already have a significant share our market, automobiles. one of the obama >> laurie wallace, a public citizen was on this program on tuesday. she spoke a little about this agreement. daiwa to get your reaction >> you want safe imports and disagreement limits imports this agreement has a chapter

about deregulation. parts of that chapter of the agreement basically forbids limits on risky new financial services like derivatives. suddenly we would not able to decide what is too big. the craziest thing about theagrn corporations to private the enforce it. guest: i don't have a lot to say about the financial services sector. what i can tell you from the standpoint of the financial- services industry is that members view themselves as big gainers in this particular agreement. it will allow them to undertake

activities in korea that they are currently prohibited from. that is a win. if you have a strong view about banking regulation, you will be unhappy with this. from the standpoint of the american banking sector, they see this as a game for them and a gain for american jobs. i disagree with her views about international tribunals who gets to make the decisions. i think she's not an internationalist. we live in a global world. if you are going to do business in the world, you have to develop processes for working out differences and commercial and legal disagreements. over and over again, the best way to do that is by arbitration procedures and

procedures that have neutral parties. look at things neutrally and render judgments of commercial disputes. she does not like that. many don't like that because they believe in american sovereignty, that we should get to make the decisions and we should get to win. we don't live in that world anymore. we have to get used to it. host: some key facts about the u.s.-south korea's trade pact. the u.s. will phase out the 2.5% tariff on vehicles made in korea over five years. cut tariffs on u.s. imports from 8% down to four% for five years and then eliminate them. it would eliminate the 10% tariff on american aid trucks and south korea would import 25,000 u.s. cars per year that to do not meet south korean safety demands. and retain 25% u.s. tariff on trucks for eight years,

eliminated after 10 years. when they talk about importing 25,000 u.s. cars if without meeting south korea's eighth demands, where did that come from? guest: they meet u.s. safety and environmental standards, so these are not direct -- these are not direct vehicles. relect products. we have been selling 6000 cars per year to korea. we think parts of the reason is they have had to standards that go way beyond necessity. this provision will allow us to get more cars to korea. it is a significant concession on their part. a victory for the administration. >> is there a market for u.s.

cars in korea? >> we will find out. when you are selling corn for soybeans, people don't always pay attention. people would get the labels on consumer products like vehicles. people may not want to purchase our products. i think the industry view has been if we can get them in and if they are price competitive and high-quality products, people will buy them. if you look at other similar environments like china, we have done rather well not only with imports but we have domestic production. of the buick is one of the largest selling vehicles there. ofthere are lots opportunities if you are creative. >> president of the national foreign trade council. mike is on the republican line.

caller: good morning. i have a question that has to do with the size of the american economy, if there is such a figure. i have heard numbers in the multi trillions of dollars. i'm asking the question in the context of how large the economy is -- the larger the economy is, the more stimulus that would have to be put into that to get it to move. in the context of what the gentleman is talking about, vehicle imports, i would think that it would take a lot of cars being exported in order to show up as compulsive benefit to the overall american economy -- composite

benefit. what is -- is there a number for the total economic value? >> i just happened to -- i was just looking through a couple of resources yesterday. 14 trillion dollars, looks like the u.s. is the second-largest economy if you keeping the eurozone as a single economy. that's at about $16 trillion gdp. ours is about $14 trillion gdp. $5 trillion in japan. i just happened to look at the study yesterday. guest: i think it's a good question. if you take the thing in pieces, each individual peace is not going to be that big, because we are such a large economy. the international trade commission reviewed the agreement and that's the conclusion. piece by piece, a lot of the impact would be small.

when you add it together, you have a significant impact. $10 billion or $12 billion of exports. i think that is significant. you are right. to break it down, each piece is small. host: springfield, ohio. go-ahead. caller: i think this segment follows up nicely on the last the 17 free trade agreements that george bush and republicans passed lost 8 million jobs for us. it's going to be the unemployed people that cannot find a job that will be out in the streets. i am one of the oldest baby boomers and i will be leading the pack. peter, i have a bone to pick with you. the last time i called, i said i had been watching 30 years.

and you said that you had only been on the air 15 years. otty ofhat was kind of snuggi me. caller: that was a lie. host: this show came on air in 1995. so that's what i was talking about. caller: you tried to discredit my comments by making me feel like a liar that i had watched the show 30 years when i had. host: i apologize. that was not polite of me. caller: i did not appreciate it. host: thanks for calling. to her point on the free-trade agreement, i have to try to remember.

guest: someone born in january of 1946, i am an even older baby boomers that new. i think i have a different view of what the country needs. there's a debate in washington right now in trade circles about the value of the free-trade agreement that we already entered into. there's one set of economists that will tell you we have a trade surplus with all of them. there's another set of economists that will tell you that's wrong. in my organization we have spent a good bit of time looking at those two assertions trying to figure out what the truth is. i think our conclusion is both of them are a little misleading. it depends on how you count. it is clearly not accurate to say that they have collectively produce the kind of deficit that you are talking about. most of them are very small economies. the truth is their effect on the overall economy has not been

great. host: the next call from bill writes on the u.s.-south korea free trade agreement. in the deadline, barbara. boomer.i'm a baby i grew up in cleveland. i spent my childhood going up and down the cleveland shoreline with my father. i wondered what all of the flags were. ever since we started as a free trade deals who only help the upper 2%, wal-mart has become the nation's largest employer as opposed to when gm had a high union wage with benefits and health-care. i would really like to know if you have heard of ian fletcher, he wrote a book and used to be an economist with a hedge fund. the name of the book is called

"free trade does not work." he's not anti-free trade -- he is anti-free trade, excuse me. he says all we are doing is putting -- gutting manufacturing. he says that we should not trust economists because they go with the flow. 50% of marriages failed in this country. till death do us part, that is a legal contract. how do we expect the rest of the world to abide by a contract where there's already pirating? guest: this is the kind of question that i was expecting. there's a lot of things going on in the world that we don't like. as a baby boomer, you grew up in the eisenhower administration

and so did i.. a different world. we don't live in that world anymore. we live in the world where everything is made over. people are cheating. we tried to do something about it? yes, we are. this administration in particular is trying to deal with those issues promptly. if this is the world we have. we have to deal with it. we have a global economy. we are not growing. if gm is going to rely on the american market to sell cars, they're not going to make it because there are not that many people growing here to do that. we have to rely on trade. 95% of the world outside our borders. we need to rebuild the economy. the free-trade agreement would retain the colombian tra -- retain the korean tariffs on board until

2015. and continue to bar imports of u.s. beef from cattle more than 30 months old. guest: i'm tempted to say a lot of old cows will be scared. pork industry has been cleared in a continuing disagreement. the reason goes back to the korean tariffs on pork against the u.s. will come down faster than they will against the europeans. if you are thinking about competing, these things are a race. it's important that we have the advantage. we still have the advantage over the europeans in pork. the larger part of the american beef industry has an agreement and advised the president to go

forward with it notwithstanding this issue of older nbeef. this is not in the issue. we came to a separate agreement with the koreans outside the fta. those negotiations will continue. the president is committed to pushing the koreans to give more although beef over 30 months requirement. i hope we get there. host: abilene, texas on the republican line, sandy. caller: i don't know where to start. i'm starting to feel that you are either an american or local list and you cannot be both. maybe you should move to south korea. he obviously has no love for america. the free-trade agreement has gutted this country. we cannot produce anything.

quds all i have to say. i'm sad for our country. he looks very well fed and rich. is money is probably in hedge funds in another part of the world anyway. hostguest: i'm sorry if i look l fed. i do my best on that. rich, i don't think so. live within government 30 years. 20 years on capitol hill and eight years on the clinton administration. i discovered the private-sector if after the 2000 election. i am new to this part of it. i don't want to talk about who is the better american. i have always been an american and always will be. as i said before, we have to with the world that we live in

and not the one we would like it to be. when you say we don't make anything anymore, i have a concern about that. something the previous caller mentioned. we have been losing manufacturing jobs in this country 40 years. we have not lost just to the koreans and chinese. we have lost a lot of people. productivity improvements. we are making stops more now than ever. 2009 was not because of the recession. we are manufacturing more stuff than ever. we are doing it with fewer workers and there's no question about that. there's a lot of pain in the economy about that. but it's not true that we don't make anything. we may be losing our capacity to make cutting edge stuff that enables us to maintain market

advantage and maintain global leadership in technology, which i think is the important thing. we are in a race. for along time the people we were running against or three laps behind us. we are still running fast. a lot of the others have caught up with us and we don't like it very much. once they get caught up, there's always two choices in the race. you either trip the other guy or run past him. what i'm saying is tripping the other guy does not work very well. they will break the rules anyway. the secret for us is to run test them. run faster and innovate faster and manufacture faster. host: bill spent 20 years working on capitol hill most of them as a senior legislative assistant to the late republican senator john heinz and senator rockefeller of west virginia and

served as undersecretary for after that for export administration in the u.s. department of , is under president clinton. do you see any new ones differences? guest: there was not much difference between clinton and bush. either of the bush presidency. this has been harder issue for president obama partly because trade has become more controversial. it is always more controversial during a recession then when we are prosperous. so he suffers from difficult times. it has been hard because he pays a lot of attention to what unions advised. unions are divided on korea. uaw supports its, but steelworkers are not. it's been more complicated for them. if you look at his -- they have

been pro-trade. if you look at over a long time, the difference of opinion is less partisan than it is regional. if you are from the rust belt, as i am from chicago, spent time in cleveland, if you are from that part of the country, you are feeling a lot of pain. if you are from the west coast, where allot of jobs have been exported to japan and korea, you are experiencing certain things. host: go ahead, caller. caller: both republicans and democrats are for it. you are trying to compare yourself with europe, forget

about it. we are so far behind. minimum wage is a disgrace. the chinese bought 700,000 volkswagen vehicles from germany. they have an agreement where they have to spend as much money in germany as germany spends on chinese products. you are nothing but a bunch of nandua talks -- of neanderthals. guest: he is wrong about franklin roosevelt. he was a proponent of free trade and reversed the policy of protection that previous administrations had. the highest tariffs were in the 1920's during the republican administration. the trade act of 1934 put the country on the course it is on now. you may not like it, but he is

wrong. host: illinois on the line. caller: hello, peter. and mr. william reinsch, a u.s. promise of commerce. guest: i'm sorry. caller: don't be sorry. one difference i found in our products that we tend to buy now from china, they are very low quality. what americans used to make was quality, it would last. 30 yearsnderstand why of free trade and our deficits and why you guys keep on going through this insanity is unbelievable. you guys have built up more debt for this country with free trade

than any other administration i have heard of industry. there has always been tariffs, but the american people paid for their goods from overseas at cheap prices. putting american businesses out of business. i feel people like you have beat out benedict arnold a long time ago. thanks for listening. guest: you have put a lot of things together and i will try to undo them a little. i'm not sure what you mean by debt in this context. i was impressed by one of the callers on the previous segment. i was watching before i came on. there were talking about the british situation and he said when clinton left office we had a surplus and then we had a

party eight years with two wars and that was not paid for. there's a lot of truth to that. clinton left office with a surplus. if he was paying down the debt. it's not a 30-year problem. it's a relatively recent problem. my view is about where the blame lies. it should be about what we do next. you had nothing to say about what we do next. you had condemnation of the past. what are we going to do in the kind of world we live in? the chinese are there. you may or may not like the stuff they make, but millions of americans buy them. walmart is essential because people stop there. esther neighbors y dayjet walmart and why they don't buy stuff made in america.

your answer will be because there's no stuff made in america that they cannot buy. that's not true. we went through this debate in the 1980's with japanese cars. we had the same debate about japanese cars. the fact is a lot of this stuff is consumer driven. consumers bought toyota vehicles and honda vehicles. they did not buy for vehicles and chrysler or chevrolet. ask people why they did that. the blame is not on the producers in every case. regardless of the blame, we live in an economy now where all the foreigners are catching up to us. we have to deal with that. i think the way to deal with that is not to whine about how we got here. we have to figure out how to a- innovates and out run them in a race has gotten a lot more difficult. host: the next call is from

spring lake, n.c., barry is a republican. caller: good morning. i have a couple of issues. in the stand the incentives and psychology in dealing with the general public. i can look at incentives that have been laid out for the american. american the incentives have been set by the people in power. the incentives have been set to purchase cheaply made goods. the quality is going to be low. the incentives have been set to go a certain route for us. why has the incentive not been set for us to grow our own food and manufactured things. not just a certain group of people but to a certain person, to prosper in this country, if you are connected and you do what they say to do, which means you have to destroy your

country, then you can have a job. that does not sound like a country i want to live in. guest: we do grow our own food. we are a net agricultural export. we have not been one of the most efficient or productive -- we have one of the most efficient and safe and productive agriculture industries in the world. most of what you eat is homegrown. if you want rice in the middle of december, it's probably going to come from chile, but that has to do more with the the weather. 30 years ago, you could not get drapes -- grapes in december, but now you can. is that a bad thing? you decide. i forgot what i was going to say. host: let's leave it there.

someone asking whether wages and benefits are the same in south korea and the u.s. or does one have more disposable income? guest: we are the high-wage, high-benefit economy to the benefit of our people. there's is lower. that makes it a challenge to compete against low-wage economies. the koreans are not as low-wage as bangladesh or other developing countries. they are rapidly catching up. that's one of the things that enables us to compete successfully, because their wages have gone up and they're middle class is growing and they are demanding more benefits. one of the things the labor unions in this country have insisted on comically for a long time is insisting that our trading partners pay their workers proper wages, but they

allow their workers to have unions and that they allow a collective bargaining. a big agreement we have with the chinese. one of the results of that is that we are bringing up labor standards and wage levels all over the world. i think that's a good thing. it also makes us more competitive. host: pat, a democrat, good morning. caller: the morning and thanks for your coverage and its outstanding. this gentleman kind of successfully dodged the question about 30-month-old peace. that has to do with the fact that at that point you can't tell that a = -- can cow hazmat cow disease. the chinese have safer standards and they don't want our beef.

this gentleman says there's nothing we can do about this, that it is a "crossroads thing and we cannot do anything about this. -- that it is a global thing. these free trade he says the attorneys are trying to violate what do this is a good angle bad thing and how many people are employed. they could talk to scores of people in this country that are agilent of a job. talk to them. they will know. -- that are out of a job. guest: i don't think i'd said that. there are things we can do about it. what i said before is this is a race. you win the race by running faster. we need to out-innovates and

stimulate research and development and stimulate invention. we need to do a lot more with education. i have two sons and i'm worried about their future if from a lot of perspectives. i want to make sure they are educated to function in the economy that they grew up in, which is different from the one i did. there are a lot of things we can do. i would never want anyone to think that i believe there's nothing we can do about this. we have to be realistic about the situation we are in. host: the last call comes from kentucky. caller: i just want to ask you, you say there are a lot of things made in this country. when i go shopping, i cannot find anything made in this country. i go to the better stores. all of the clothing is made overseas. host: have you tried to buy

american? caller: i have. i've looked for american. there's nothing made in america. walmart has run a lot of small stores out of business. guest: i think you are right about the clothing and about shoes for women especially in the united states. men's shoes that are american made, that is difficult to find. if you go beyond clothing and textiles, the most obvious kids is cars. you don't have to buy japanese cars. you can buy a chevrolet or ford or other american cars. there are a lot of products that you don't see that we make. if the machinery that makes automobiles and airplanes, the airplanes, themselves, machine tools, measuring equipment. when you go to the doctor if and

get an x-ray and you have a cat scan or whatever or have your blood pressure taken, those machines most likely are made in america. if you don't buy them because we don't by x-ray machines. it's not a consumer item, but those items are manufactured here. those are high-tech items and those are items that deploy a lot -- that employed a lot of americans. host: bill runge is president of the national foreign trade council. he's been our guest to talk about the u.s.-south korea's free-trade agreement. guest:. thank you. host: about an hour-and-a-half ago. a look historically and contemporarily, presidents at the midterm with rutgers historian david greenberg. we will be right back.

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than 100 million houses and provided as a public service. >> washington journal continues. host: david greenberg is the history lesson of their on online magazine "slate." thanks for joining us. guest: thanks. host: how have the president's done midterm in their first terms and contemporarily, how is president obama's doing? guest: in terms of the midterm elections, it is almost always the case that the president's party loses. there have been a couple of exceptions. franklin roosevelt in 1934. bill clinton in his sixth year, 19981 seats for the democrats. george bush in 2002 won seats.

the noam is for the president to lose. president obama, the democrats lost trinidad -- lost pretty bad. we don't know to what degree the terrible economy affected debt. host: when you look back and you see george w. bush in his second term in 2006 losing seats or ronald reagan in 1982, jimmy carter in 1980, historically, has it been the president's fault or is it things congress has been up to? guest: it's always a combination of things. first, there's a dynamic by which there's surges and declines. you win big and you bring in

two-year congressman and you bring senators. two years later, the congressmen, some of them will be swept back muscoda with the tide six years later. some of it is the dynamics. it has to do with the economy. when times are bad, voters are motivated to go and punish the party in power, which they tend to identify with the president. that certainly was the case this year, i think, where the voters out were much more republican and upset with how things were going on than the ones who stayed home. host: contemporary presidents like to compare themselves to harry truman. there seems to be a trend in that direction.

you have recently written a column "to give them hell, barry." put the truman era in perspective for us. >> truman is an interesting president because he came into office as a virtual unknown. he inherited the office, got america through to the end of the second world war, for which he knew that america was going to been at that stage. but there's a lot of uncertainty over who this man was. when he was forced to kind of run on his own, not himself, but the democrats to run without fdr as their leader, he did very badly in 1946. truman had a choice. he could have capitulated and gone with the republican agenda. some people in his own party suggested that trumann should

resign and appoint a republican secretary of state and the election was a referendum and truman had lost. he should turn over power to the republicans. other people, liberals, wanted him to fight harder. what he did was instructive. he reached out to achieve bipartisanship, but not a centrist compromise to meet the republicans have way. on certain issues, particularly domestic issues, his fair deal, a program of economic well- being, he really stood his ground and fought. in some cases the republican congress, they passed anti-union bill that truman vetoed and they passed it over his veto, but he went down fighting on those things.

on foreign-policy, he established principles by which he could lead in a bipartisan fashion. some have stepped up to the plate to say we are going to form a bipartisan anti- communists policy with you. that included the truman turkey in fighting off communism and include the marshall plan. it's included nato. he was able to have it both ways. he knew how to get bipartisanship in a principled man and he knew how to be partisan in a principled way. when it came time for 1948, both things work in his favor. he was now seen as a stronger foreign policy president than he was before. and he was more beloved by liberals and democrats and people who felt he was sticking up for the working man.

bipartisanship is important is bee lesson, but it should no based on principles that the party in power, which is the white house, feels is important. host: given the anger at the left toward president obama, working on the tax bill with the republicans. guest: i think there are different elements in that anger. some of it is that the bush tax cuts for the very wealthy have been for a long time a thorn in the side of those who believe in greater economic fairness. for that reason it was a painful blow for liberals to swallow -- a painful pill. there's also the issue of the

negotiations did justifiably, the left field that obama has not been the most skilled negotiator. remember, he has never done anything like this before. people should not forget. obama came to the presidency -- and i generally support him -- with less actual achievement to his name bandied about any president in the preceding century. he really have not had a hard lesson of accomplishment. he certainly had not engage in anything like negotiating with congress over major issues. on a number of issues, i think, people justifiably feel that he did not negotiate well. he gave away too much without getting things in return. he gave things upper upfront instead of maybe giving in that tends to get more. on different people have assessments that very.

if you look at dollars allocated, or go to liberal democratic party's than republican priorities according to some people. others point out that democrats gave tax cuts to the about the early and maybe could have gotten more in return. host: david greenberg is a professor at rutgers university and he writes a column for "slate"magazine. send us a tweet on twitter.com/c-spanwj or send us an e-mail. on the independent line from georgia. good morning. caller: thank you. how are you?

host: good. caller: the economy in the midst that it's in, you have them fighting over a bill that could help millions of people. the republicans will not give in on the tax cuts, give that to them. if they want to be greedy, let them have the tax cuts. host: anything you would like to respond to? guest: yes, people fight for their economic self-interest, if i understood the kollar correctly. that is going on. the parties do represent, for the most part, different

segments of the economic spectrum. they do see real fights over things like tax cuts and distribution of wealth. host: given the current situation after the 2010 elections, do you see president obama changing course over the next two years? and is their historical parallel? guest: it seems that this last tax deal is an effort to be more conciliatory, to give the republicans a little bit more of what they have wanted in terms of negotiations. i think all presidents have done some of that. people talk about bill clinton as having done that. there's a soft parallel. there's a myth that i read in the newspaper this morning, did almost as fact that bill clinton

moved to the center after his first two years. people forget that his tax bill, his budget bill of 1993, even though it did not receive any republican votes, was a centrist bill. it really puts the emphasis on deficit reduction, which at the time was what republicans and ross perot had pushed in 1992 and it also included more progressive taxation for liberals. it was a hybrid bill. bill clinton also did nafta, it's a lot of people in his party were not happy with. the health-care plan was a market-based scheme. it was not a liberal plan. at least not compared to the other offers on the table. clinton did govern from '93 and '94 for the most part s the new democratic that he ran on.

once he lost the congress, his hand was forced and he did compromise on some things, but he still held out on some things. i think all presidents do some conciliation and some holding the line on principle. the question is really on which issues you hold to heart. host: phoenix, on with david greenberg. caller: good morning, on the tax extension plan, i think for many democrats we see it as a billionaire bailout plan. those to benefit the most will probably be the estate tax for over $5 million. i read a book many years ago on thomas paine. the author claimed that the george washington made a statement to thomas paine and

some others that they had to remember the most overriding principle of business was that they will do anything they have to do in order to line their pockets with gold. the reason he made that statement was because during the revolutionary war, while his soldiers were going out food and shoes and blankets, american businessmen were selling supplies to the british for- profit and he was extremely angry over that. can you verify whether george washington made that statement or not? that: i don't know statement or quotation. i am not sure whether washington

said that. it certainly was true that there were people prospering in the american business community, merchants and so on, even as soldiers were going cold and hungry. people tend to sometimes be defensive towards this or deny this. it is one of the aspects of capitalism. business works in its self interests, seeking to maximize profit. i use the job as government to make sure that it does not exploit those not making a profit, could the there is a modicum of fairness involved in the economic system. it's quite natural for business to want to do that. host: new hampshire on the republican line. caller: you have to bear with me. i called and made the statement and reminded you of the wendy's

commercial with where's the beef. i got cut off unfortunately. i have a quick question. i am little new to the history stuff and looking at things through these elements of how the world changes. you made a statement about clinton lost the congress. it is odd. by all accounts that i have been able to cross reference and research, he did a lot of good stuff for the economy. i am trying to understand this whole thing in retrospect of how president obama seems to be following through --excuse me, my children. he already proclaimed he wanted

to make changes for the average common person and now changing. not wanting to give the tax cuts to the wealthy seems to be a big dispute. i am trying to understand this political machine that seems to run like a big sledgehammer in the people's face, because it was told to us, the people and for the people, united we stand. host: we are going to leave it there. guest: a couple of questions there or comments. i think about clinton, i agree that he did a lot of good for the economy. the 1993 budget bill is one of the great unappreciated accomplishments of his presidency. it sets the groundwork for the growth and prosperity of 1990's. he did not get a lot of credit

for it at the time. partly there was republican united opposition to it. he was forced to scrounge up every last democratic votes. what's also interesting and you have seen this with the stimulus and some of what obama got passed, people were convinced clinton raised their taxes in 1993, where is far more people got tax cuts or lower taxes. people felt their taxes went up. sometimes it takes a while for people to appreciate the benefits of a bill like the 1993 budget bill. by the time clinton ran for the election and by the late 1990's, there was a recognition that there was new prosperity at the end and we had a new economy and there was the internet thriving.

so sometimes there is not necessarily a correlation between the positive policy good that a president achieves and how he does the next time around at the polls. host: david brooks, i will read part of his column and get your response. the big story of the week is president obama's is returning to first principles -- guest: well, i think the latter part of the statement is true enough. i do think clinton and treatment fit this, presidents do know how

to reach out in different directions from where they stand to build alliances in different directions. i mentioned earlier that clinton went one way with nafta and went another way with the economic plan. even though those were passed within a few months or weeks of each other. brooks is interesting. he often has a tendency to bring in all lot of kind of social science or scientific research, of watered down popified column to give it some novelty. i'm not a network president. about: we are talking presidents at the midterm in recent history. democrat line, georgia. caller: hi.

host: we are listening, calvin. caller: my comment is i really do not feel sorry for the unemployed. i do not feel sorry for the people that are out of work. if they had gotten up out of their bids in 2010 and voted on tuesday the second, we would not be in this situation right now. we would not be in this situation because republicans would not be getting back into office. democrats will get these bills passed. guest: i think there's a kernel of truth in what you said. obviously, i did see poll numbers that showed the unemployed, there turnout was relatively low and those less affected in the economy, there

turnout was higher. on the other hand, in a way it begs the question, the reason people do not show up to vote has to do with disaffection and test to do with feeling abandoned by the political system, including, rightly or wrongly, by the democrats and the president. in retrospect, i did it is clear that more should have been done to stimulate the economy early in obama's presidency. more should have been done in particular to get a jobs program through. whether or not that would have been possible is a difficult question, of course. but i think people are not always fully into and with, you know, the relationship between voting and their economic situation. to be fair, there is often not a

direct correlation. if it still would have been hard going for the unemployed. i guess i have a bit more compassion even if i wish more people had voted otherwise. host: professor greenberg, 1982 was not a good year. not for the economy. did president reagan to any altering of course or was he pretty much set on course? guest: you have a somewhat similar story. ronald reagan did suffer a setback in 1982, the democrats gained seats. they had already held the house of representatives and lost the senate in 1980. the democrats were strengthened. the key reagan budget bill had already passed, the institutionalized structure for

taxes. reagan was forced to back off on a number of items. like a lot of republicans, going back to the 1930's, they had wanted to reform or privatize or duel with social security. he was forced to back off of that effort. instead ronald reagan moved to eventually do in the social security commission that came up with much more modest reforms that kept the basic system intact. so ronald reagan did a lot of compromising and is remembered to these days as a true blue republican conservatives. but he did his share of negotiating. got a lotn o'neal

of negotiating done. guest: portland, maine. you are my favorites moderator on c-span. everybody calls to say which one is their favorites. you are my favorites. professor greenberg, i would like you to talk about hamiltonian trade policy. we had a person previous to you talking about free trade policies. one of the areas where president obama has taken a hit is on free trade. he did speak during the campaign about renegotiating naphtha, things like the korean trade deal, and he has yet to really address that. i think he took a real hit, also, with the tea party making a lot of leeway on this type of area. we have seen the decline over the past 30 years in the industrial base and our status

as a superpower relative to other nations. it has to do with the erosion of our industrial base. if you could talk about hamiltonian trade policy that the country is based on and built around and build into a superpower, i would appreciate it. guest: well, trade policy is not my particular expertise. obviously, alexander hamilton is sort of the patron saint of those who would have a strong nationally directed economy, government support for manufacturing, and this did help to build the united states into a superpower, a self-sufficient economy. on the other hand, i think both parties, at least the leadership of both parties, is aware that we are in a different era now on a certain amount of free trade is, if not inevitable, certainly

why -- wise. the trick is to try to promote trade actively, which will improve all economies, while at the same time trying to nurture the american business. whether or not there's a future in heavy manufacturing as there once was is a debate i will leave to others. host: we have about 15 minutes left with our guest, professor david greenberg. are you teaching this semester? guest: i am not. i'm spending this year in washington at the woodrow wilson center, for visiting scholars -- a think tank that has positioned for visiting scholars are run the country. i am working on a book that i'm calling "a history of spin," looking at how presidents from theodore roosevelt on and have developed a whole machinery of

public relations and media and the whole apparatus that surrounds the presidency. host: what have you learned that may surprise us that will be in your book? guest: one thing that is interesting is that we have a tendency to think that this all is a fairly recent development, maybe with television or maybe with a model reagan as the television president -- ronald reagan as the television president. i find you go back to two-door roosevelt, really the first president to have press conferences, and they were in formal press conferences. he would be getting a shave, and he would have a flock of correspondents around him. roosevelt was very good at cultivating the press. you had these mass-circulation newspapers that or try to get on the front pages each day. even then, there were critics who were denouncing him, saying his entire presidency was built on media manipulation, just about getting the press corps to eke out of his hands -- eat out

of his hands. you also had those who would criticize the president's failings as failures of communication. this whole this clause we have about presidents fooling us with -- this whole discourse we have about residents of cooling us with spin and using the media and other tricks to give a false impression of themselves really goes back a lot farther than a lot of our commentary would suggest. host: next call for professor greenberg, brooklyn, new york. go ahead, mike. caller: my comment is, i am very interested to hear all the people complaining about president bush caving in to republicans on tax cuts. i believe that comes from democrats. i believe that comes from progressives, and you have in your democratic call-lined different people, progressives mixed in with democrats, liberal democrats, i would call them. barack obama would say that the

notion that not raising people's taxes is a tax cut -- not being a tax cut considered -- especially people picking $250,000 or less, and people , it is not athat millionaire. it's quite a long wait before you reach that market grouping those people -- it is quite a long way before you make that mark. it is gripping those people with millionaires and making them and villains. i believe that if we have a person who can run from the middle, that would be good. you have people upset and unhappy on both sides. host: we will leave it there. thanks, mike. professor greenberg, anything you want to add to that? guest: well, obviously it the color -- the caller supports

the continuation of the tax cuts, however you want to free -- phrase it. on his comments about "progressive," about 20 years ago, i think about the dukakis campaign as a key moment. the word liberal started to fall out of favor. democrats who were aboard the left, most democrats, started, some of them, at least those who work activists, started looking for another label. "progressive" is a funny word. it has been associated with theodore roosevelt, who had this sort of hambletonian republican -- hamiltonian republicanism associated with him. bill clinton used it. these days it seems to represent

-- i would distinguish it from "liberals." i think of different magazines. "the nation," further to the left, the progressive magazine, and "the new republic," where i once worked and occasionally write for, i think of as a liberal magazine. liberals are strongly anti- communists, still tend to be for free trade. the progressives -- sometimes used as a synonym for more of the far left of the democratic party. but everybody uses these terms is little differently. it is safe to say that on the whole, most democrats would have preferred the tax cuts expire on those making over $250,000, or there was a proposal to take up to $1 million. that did not make it very far. i think it is said to said that

liberals and democrats favor a more progressive taxation. host: professor greenberg is the author of three books already shadow," "calvin coolidge," and "presidential duels but as i remember that book. i have got -- "presidential doo dles." i remember that part. -- that book. guest: they went to the archives and brought it to basic books, or the editor there came to me and said she wanted a story to put this in context and to an introduction. it seemed -- she wanted a historian to put this in context and to do in a direction. it seemed like a fun project.

and also, our growing interest in the personal and private and even psychological sides of the president's or the course of american history. the president has become, on the one hand, so far out of reach, but on the other hand has had to effect populist style to feel like he is one of us. these doodles are a way to imagine getting inside to what they are. host: charlie, thanks for holding. you are on the air. caller: i have, not a question, but a comment, more or less, with the tax is a president clinton and president obama. i feel that under 1993 -- on the the 1993, president clinton -- there was an equal vote in the house, and vice-president gore

had to break that tie vote. that was a tax increase. the reason why the republicans fought that was because it was a tax increase on the super-rich and the international corporations. that has contributed partly to our surpluses. not all of it, but it was a big help, that tax increase for the upper ridge. and now our great president, mr. atma -- i'm really a liberal social issues, but i'm very conservative on the monetary side. but i feel that the liberals, or the democrats, seem to have more those that are least fortunate than ourselves. host: professor greenberg? guest: that is certainly t

rue that people who are lower on the economic ladder and vote democratic, and the wealthier -- these are generalizations -- tended to vote more republican. it is true that clinton did raise taxes on the wealthy. in 1993, there were cries that this was going to ruin the economy. it did, with the ensuing prosperity, lead to the surplus is beagley had. that is one example in history -- the surpluses we briefly had. that is one example in history. whenever there is a call to raise taxes, on anybody, but particularly on the wealthy, there is this rhetoric that it will ruin the economy, and that has not been borne out historically. host: this sweet - -- tweet --

guest: it is interesting to say that it seems more fractured. i come in some ways -- by, in some ways, would have said the opposite, that it seems that you have that kind of core groups of activists. this is for a long time been the case with the party's. they seem especially vocal and especially noticeable in the political debate these days, when the because -- partly because you have cable channels that cater to those groups, partly because you have blogs and other outlets where they can have a louder voice, and also partly because some of the mechanisms by which congressional representation is a dined -- is done, both parties in congress to be further to the extreme than where the lion's

share of their voters are. on the other hand, it is important to stipulate that is not delete symmetrical. -- not really symmetrical. sometimes we talk as if both parties have got to the extreme. the republicans -- there is a great book called "office center" that went into this a few years ago -- the republicans are for more to the right and democrats are to the left. -- far more to the right to than democrats are to the left. it is right to criticize the democratic activists for rescuing the party more to one side, but it is not on a scale like you a scene with the republican party. host: go ahead, wanda. caller: wasn't it at the y2k, and theble, republican congress that made

the clinton economy? guest: i'm not sure what that really has to do with it. i mean, there was some bubble obviously involved, but there was also a real growth and investment in the high-tech sector. you cannot say it was all a bubble. as far as the republicans, they opposed the 1993 bill which laid the groundwork. yes, bill clinton did work with republicans, with other legislation like the telecom bill. host: professor greenberg, where are the operations when it comes to terms -- aberrations when it comes to midterms? guest: the enormous for the party in the white house to his congressional seats -- the norm is for the party and the white house to lose congressional seats. the exception is 1998, because

the republican congress over reached with the impeachment. most americans were against impeaching bill clinton. they did not approve of the lewinsky business but they were ready to move on. republicans pushed the through and in november they were punished the polls. 2002, we were coming out of 9/11, and there was fear and vulnerability and anger. people looked to the president and his party to provide strength on national security, which for a number of years republicans have done better than the public on those issues. very cannily, the republicans brought up the question of an iraq war a vote before the election and put democrats and a hard spot. when the debate was on a national security, democrats ended up doing poorly on 2002.

those exceptions should give us some pause about the iron laws of history. yes, there is a good reason why there is a tendency for the party in the white house to lose midterms its, but it is not an iron law and it does not have to happen. there are a lot of individual -- the individual presidents and congress can do to make otherwise. host: last call. go ahead, bob. caller: it seems to me that there is a world of difference between the clinton administration years in the contemporary years -- and the contemporary years. since 2000, we have gotten into two wars, and the interesting thing is that the people on the right, more perhaps than on the left, have really become prisoners of what we might call political stereotypes.

it is a concern to me, because i think it term elections, especially midterm elections, do not give us a feel for how the nation as whole really come in other words, feels about a particular issue at that point in time. guest: well, absolutely. you can only read so much from a single election. clearly, we can read dissatisfaction with the democrats. but beyond that, it is hard, exactly, to know what could have been done differently. sometimes in washington punditry we fall into these cliches. obama went too far to the left or clinton too far to the left in his first years and he is going to attack to the center.

those explanations are really superficial and don't help us much. in all cases, there is going to be this mix, with obama as with clinton. there were times in the first two years when they went left and times when they went centrist. yes, you need to see this as an ongoing issue, and the state of the economy, most people would agree, is the overriding issue right now. host: you can read david greenberg in "slate." "history lessons" is the column . he is also a history professor at rutgers university. thank you for being on "washington journal." we will be talking about the debt crisis in europe, why it matters to the u.s. we will be right back.

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companies. >> "washington journal" continues. host: bruce stokes of "national journal," what is the european debt crisis matter to the u.s.? guest: because we are increasingly integrated as a transatlantic economy. there are more than 3 million americans work for european countries in this country. our second largest trade partner is europe, after canada. a huge percentage of the profits of corporations, for business in europe. --, from a business in europe. when the economy struggles, as it is now doing, we have to pay attention to that and be worried about how it is going. host: specifically, is the entire euros on having trouble? or is this a country-by-country basis? guest: some countries are doing worse than others. ireland had to be bailed out. there is great belief that portugal may be the next in that

line. some worry that spain may follow, although bench economists would disagree. there seems to be a domino effect going hundred on. -- going on. greece was the first country to go. if that continues, we cannot be totally sure that the french and german economies are not also be affected. host: how did the average debt to a situation where they would need to be bailed out, and how was the different -- how did the irish to get to this question were they would need to be billed out, and how is that different from before? guest: the irish had a run-up in real-estate prices, and as a result, this frothy market, this overheated market, eventually collapsed. the bubble collapsed, as the housing market it in the united states. banks were holding mortgages

that were under water at the property was not worth what they meant it for. the banks got in real trouble. the government stepped in to bail out the banks because they were afraid that the condom -- they were afraid of the economy imploding. the was on the shoulders of irish taxpayers could debt and deficit in ireland got too big and they had to be bailed out. host: why the talk about portugal as well? guest: the portuguese economy will like the contract next year. -- likely contract next year. they have not maintained competitiveness with the rest of europe. and the housing bubble that you have in spain and ireland -- but they still have gotten over extended. portugal is a fairly small country. but the problems stop at ireland

or portugal, this is manageable. very bigwever, is a country. if it spreads to spain, and that is a debatable point if that happens, we ought to be worried. host: bruce stokes our guest, with "national journal." this is his article, "why your matters c- -- why europe matters." but you report that u.s. banks have $1.70 trillion, with a t, in outstanding loans in europe. guest: there has been concern in the past by german banks and lending to places like greece and ireland, and french banks and their lending, but what we have not paid attention to is after germany and france, the

u.s. is the largest bank lender in europe. now, most of all loans are from places like the netherlands or germany, which are fairly stable and we think they are in good shape. but we would be kidding ourselves -- if the german bank loans go bad in places like spain, that will affect the german situation, and that will, by extension, begin to affect our banks. we have to be worried about that. host: wendy euro is owned looks at the u.s., do they see us as a debtor -- when the eurozone looks at the u.s., to the seat us as a debtor nation? guest: we have the ability to print money if we have to. in the short run we can solve the problem. we are in a much better shape than in ireland or portugal or even spain or italy.

i think the more immediate challenge reface is that a slowdown in europe could cause a slowdown in the u.s., could make it very difficult for the president to meet his goal of doubling exports over the next five years, which would help our economy, and we could see a slowdown as a result. host: these are facts and figures from the u.s. census bureau. i just want you to walk us through these a bit. in 2009, u.s. imports from europe and u.s. exports to europe, $281 billion, $220 billion, negative balance is $61 billion. in 2008, u.s. imports, $367 billion, $272 billion. there was nearly and $80 billion drop in some of these figures. host: we have to be worried about this. we saw in 2002, when the

european economy slowed, and then in 2009, a drop-off in our exports. we have to be mindful that we need to somehow pay for all the imports we do into this country. if our markets in some of the biggest economies in the world, even a larger economy than the united states -- those exports begin to fall off, our deficit to become much worse. host: why do they call it a sovereign debt crisis? guest: because what effectively has happened in europe is an increase -- in greece and ireland -- is that you haven't governments become more indebted than -- all governments are in debt it, but more indebted than they can sustain. in ireland, what you saw was private sector get transferred

to the public sector, which enormously increase the public sector obligations. governments have to issue bonds to pay their bills. they are constantly doing this, all the time. and they are sovereigns, and terminology. it is a sovereign debt problem. what we have seen in europe is that investors are charging governments more and more to lend money. the comment way that people measure this is how much would you charge germany to borrow money from you and how much would you charge agrees or ireland? -- greece or ireland. the irish and the greeks have to offer more to investors than the germans do. when those spreads begin to increase, the country is in trouble. host: bruce stokes is our guest,

"national journal." dallas, a democrat, you are on the air. caller: how is it going, bruce? guest: hi. caller: is it possible for us, the rich as part of the united states -- are we able to help these other countries to bounce back and do it in ways that will not cause us to go into much more debt, or it is possible just to say that or we carrying a lot of this debt into other countries? host: thanks. guest: a very good question, and to allay your concerns, we are not increasing our debt to help out these countries. the only way in which we directly help these countries, or indirectly, actually, is through the international monetary fund, which is part of

the bailout and a grease -- in greece, will be part of the bailout in ireland. we are a very important member of the international monetary fund. when the imf lends to these countries, the money we have contributed to the international monetary fund has some obligations attached to it. but we already have passed legislation to meet our commitments to the imf. there is no need at this point to increase those commitments. but we should be mindful that that things go from bad to worse in europe, there may be more demand from the international monetary fund, and then it is not beyond the realm of possibility that we might have to increase their contributions. host: is this endangering the euro as a currency? guest: i think there is a growing sense that the euro is in danger.

we have to separate -- when people tell us that, there is a group of conservative economists who since the creation of the euro have said this could never work, and now they are coming out of the woodwork and saying, "we told you so, this could never work." they created a common currency with a common monetary policy, and there is an interest-setting body called the european central bank, but not a comment fiscal policy. we in the united states have a common monetary policy and common fiscal policy. at the time, people said, "book, you have to of both or neither -- look, you have to have both or neither." the debate going on in europe now is do we have to create is the policy? that means lost sovereignty, said the taxation to the ability -- central taxation capability, a number of things that individual countries in the

european union are reluctant to give up. but i do think that the challenge facing the euro is they may have to create a common as a policy or it --, and fiscal policy or some countries may have to leave, which may create other negative consequences. host: florida, republican. caller: the basic trade agreement is crazy. it should be a fair trade agreement. losing this amount of money in transactions, it hurts our economy when we are strengthening their economies. it needs to be equal or it is not going to work. we have talked about this for 20, 30 years now. another thing is, a comment that you made, i believed it was about the euro not going to work in the euro is going to come out strong in the next year or two at least with no

problems. we are going to be the ones that is going to be hurting. guest: keep up with things. i think you are right over time -- two things. i think you are right over time. trace needs to be cyclical -- traded needs to be cyclical. we have gone through a periods when we have had a trade surpluses with european union said, and more recently we have run trade deficits and they've run surpluses with us. balance, -- as long as there is the general balance, that is fine. we should not mistake our trading relationship with europe with our trading relationship with china, which has been very negative for a very long time, or our trading relationship with japan, which is a totally different magnitude. but i agree with a color that the goal of trade policy has to be -- the caller that the goal

of trade policy has to be worldwide that the u.s. runs a more balanced trade arrangement with the world. that is the only thing that could be sustainable. host: what is the fed's exposure to europe right now? does it have any? guest: we should not confuse what the fed did, which is not involved at the time the crisis. there was money -- got involved at the time of the crisis. there was money from european companies that might have been based in the united states. there is a separate activity that the fed engaged in during the crisis, and conceivably might be called upon to do again, which is a swap arrangement with the european central-bank, where we would make dollars available to them in return for their currency. on paper, it would be no different. we would have assets back on our

part and they would have dollars awhich they could use dealing with the crisis. it would be controversial, however. we shouldn't kid ourselves. what the potential consequences of this crisis going -- of the potential consequences of this crisis going badly in europe is that the fed would be asked to help out the european central bank, and even though an argument could be made that it would not expose us in any significant way, i think there would be people in congress would raise serious questions. host: i want to show you what we have from the federal reserve. "overseas firms getting federal reserve money." european central bank, $8 trillion? guest: right, right. but we have to understand that that was not a gift, not a loan. it was an exchange, a swap of

assets. now, one could argue, what of those assets they gave us to deteriorate in value, etc.? but at least in the short-to- medium term, i don't think that is a serious issue. the reality is that the fact that these numbers are out there, the fact that the caller has been asking and you have been asking, is a political problem for the fed. it is particularly a political problem for the fed to they have to do more of this. it is not beyond the realm of possibility if the european crisis gets worse that the demands on the fed could grow. let's be frank, it would be in our self-interest because of what we have talked about before, that an impression of the european economy -- implosion of the european economy -- we would suffer. we should not kid ourselves about that. host: next call for bruce stokes, oregon.

caller: good morning, steve. if you would give me just a little bit, we had the gentleman talking about trade agreements. i was a little miffed, because you can find things made in america -- i was a little amused, because you can findings made in america. there is machines and technology, devices, which we're going to tax, and yet we are told that we are our consumer society, that is our strength. but we don't seem to be able to find too many american products that are still made in the united states that we can purchase, even when we look for them at. guest: well, i think the caller is onto something. when we make our own adjustments, we have been running, up until the crisis, 5.8, up 5.9% of gdp trade deficit. that clearly was unsustainable. it contributed to the crisis.

we need a more stable tradable said, and that means we have to produce more for we consume -- more stable trade deficit, and that means we have to produce more of what we consume. that means we have to do a number of things. we have to have a weaker dollar for a long period of time. we have to have conscious policies that encourage production in this country. that would have to be preceded by a debate in this country whether we do it industrial policy or whether that is un- american to have industrial policy. host: bruce stokes is now a contributing editor to "national journal." he began there in 1984. he is also a senior transatlantic fellow with the german marshall fund. what is that? guest: the german marshall fund was created in years ago by a grant from the german government to thank the u.s. government for the marshall plan.

there were so appreciative of our help rebuilding europe after the war that they've made a grant to the u.s. government, which the u.s. government used to create this independent -- no connection to the government -- but to create this independent think tank that was existing to facilitate exchanges, intellectual activities, research on the transatlantic economy. now, what is interesting, a sign of the globalization of the fundthe german marshall is active in dealing with china, india, japan, because all the past to do with the transatlantic economy and cannot avoid that. host: linda, go ahead. caller: hello. good morning to you. i would like to find out if bruce knows anything about, like, these -- every country in the world is going through this,

especially europe -- well, especially us, to -- but the banks behind it. any foreign banks, to you know that? can you give me a hint or tommy? -- or tell me? guest: i am not sure what the caller means by "behind it." i believe that the failure to regulate the financial sector contributed greatly to the financial crisis. after that, we can blame the financial sector, we could also blame ourselves for not regulating it appropriately. host: the european countries getting in trouble as well because of their so-called safety nets, their questions? -- cushions? guest: that is a very interesting question, because for a longtime conservatives in the united states have said that european countries are not

growing as fast as ours because they are too soft on people who lose their jobs, they are too strong of a social safety net, no encouragement to work. in fact, when the crisis hit, the fact that they had a social safety net to stimulate the economy had turned down -- there were payments for automatic and they went to people and they spend the money and kept the european economy from going down as far as it might have otherwise. it is true that many european countries had a larger segment of the economy that is dependent on the state. but actually, a study by oecd, a think tank of industrial countries based in paris, showed a couple of years ago that if you accurately count what we spend, not just our operations from congress, but tax expenditures, for example -- do we subsidize people to the tax code rather than to the budget

-- rather than through the budget -- even the most generous of european countries, like denmark, only spend a few percentage points of gdp more on their social safety net than we do. we spend more than the europeans do. the question is, do we spend it wisely? we spent almost nothing in this country retraining workers. they spent more of their gdp returning workers. it is no accident that the danes have been more resilient in this crisis than the united states, or some european countries that don't spend it that way. host: ronald tweets in -- guest: it is an interesting question. i think that one of the things we have lacked in this crisis is any sense of shared sacrifice.

that question of goods back to what happened during world war ii, when people were encouraged to save as part of the war effort. subsequent studies, historical studies, suggests that well, a lot of things we did during the war -- can drive, people collecting old tires, contributing to the government -- probably has little effect on the war effort. but it mobilize the public and suggested we were all sharing and the ever -- sharing in the effort. what we have lacked in this crisis is the sense of a shared concern. at a personal level, i think it is not the case -- the reality is that the government has probably reached a limit of what it is going to spend. we are probably not going to spend much more. we need consumers to spend more if we get out of the crisis, and we need to do it in a regulated way so that it does not become another bubble. host: mark, canton, ohio,

republican line. caller: i appreciate your expertise, sir, on the transatlantic issues. i have two questions, what about germany. they seem to be the strongest economy in the eu. i might be wrong about that. but germans come from the anecdotal point of view, germans i talked to, they seemed relatively anxious to maybe break away from the eu because they seem to be carrying the brunt of the load for the other countries there. that is part wondered if i could get your views on that -- that is part one. if i could get your views on that. and i could prognostic tight on whether there would break away. -- prognosticate on whether they would break away good and how can you justify the imf helping the other countries? guest: a very good questions. i would say that the frustration among the german public with

the euro in particular is a rising. i have been involved in public opinion surveys, both of which showed that a majority of germans still want to keep the euro and not go back to the deutsche mark. more recent surveys have shown that the number may have gone down a bit. i think there is real frustration by germans that they, the german taxpayer, is paying the bill for this. i think that what the germans failed to recognize is that they would either pay the bill to help the irish or the greeks or, if there is a crisis in europe, their own banks are fairly weak. they have not on the type of reform that most people think they need to. you will pay one way or the other. but i think the viewer is correct that there is growing frustration in germany with the euro and the european union.

on the imf, it is interesting. there is this frustration, why should we be helping out the imf and bailing out other countries? that presumes that if we don't help those countries, and they don't reform, we are unaffected. the more likely outcome is if there was not the imf, we would have to be directly bailing out these countries and we would then become the bad guy, because we would be the ones imposing, as the lender -- you take our money, you have to fix this and that -- and it people blame us. it is convenient to have the imf blamed in the stand -- in these negotiations. that is why they brought it into the irish bailout in the end of the day, the germans to not

want to be blamed in the public eye. host: growing demand for american goods overseas pushed exports to their highest level. "the commerce department says the trade as it never to $38.7 billion in october -- trade deficit narrowed to $38.7 billion in october. exports rose 3.2%, the highest level since august 2008. sales of american made machinery and farm products and automobiles fueled the growth. imports dipped, with lower demand for foreign oil and 4- made cars." guest: i think we have to be careful. monthly statistics a jump around. the decline for oil is probably a significant contributor here. we should always remember that a huge percentage of the monthly import bill is for petroleum.

that is probably a sign of our own weakness, not a good thing. but it is good, we need to come over time, increase our exports and decrease in imports, narrow the trade balance. we need a relatively weaker dollar. one of the dangers of the european crisis is that if money flows to the united states because people are afraid of keeping money in the row, our dollar could strengthen and that could make these numbers worse. host: bob, maryland, please go ahead. caller: perfect intro. this kind of an accounting question, but it passed with foreign policy and defense policy -- it has to do with foreign policy and defense policy when we sell these fighter planes to somebody, i suspect that the purchase price counts positively on our trade balance. but when we station troops in foreign countries, say, germany or japan, if they offset the

cost of that, do those numbers show up in the trade balance anywhere? otherwise, how does foreign aid show? is it accounted for in the trade balance if there is no material exchange? guest: those are good questions. one of the criticisms of foreign aid is that a large portion of it often has strings attached, which requires recipients to buy computers or medical equipment or whatever, buy it from the united states. from the american taxpayer's point of view, that is a good thing. it helps the trade balance. from the recipient of foreign aid's point of view, it may not be the most efficient use of money, because they might be able to buy it more cheaply elsewhere. on military equipment, a very good question, because we need to watch this for it closely. often those deals have agreements embedded in them or if we send jet fighters to a country, and obviously, the

country would in theory have to give us x billions of dollars, part of the deal is that it has to be offset rate maybe lockheed martin or boeing has to buy something from that country. the impact on the trade balance, which would come up by the headline, look very positive, is almost completely offset by the language in the deal that requires us to buy something from india or saudi arabia or whatever. often we don't get the bank for the puck out of those deals -- bang for the buck out of those deals that we would hope for. host: christine in fort lauderdale. caller: i was one of the first to get a master's degree in economics in brussels. my first comment, the u.s.

dollar. the dollar declines about 60% since the euro inception in 2000 for. -- 2004. how do we increase the exports? we don't produce. i suspect that half of this is gone forever. host: christina, i apologize. very quickly, a second point, and that we are running out of time. caller: second point is the trade agreements -- hello? host: we are listening, go ahead. caller: the trade agreements were created for free trade of labor, boots, and capital. free movement of capital --

[unintelligible] trade agreements don't serve the purpose or advantage to equalize the standards of living. host: i apologize, we're running out of time. guest: i think the caller is right that without a policy to subsidize, although subsidies are part of it -- but to nurture manufacturing in the united states, a weakened the dollar will not in itself solve problems. although we have to understand that it sends the right signals to the market that is better to buildings in the united states then import them. guest: well, i think in

retrospect that that is one of the problems, that central banks are always afraid to take the punch bowl away from the party. i think that as alan greenspan's old phrase. let's face it, if alan greenspan, and i am not defending him, but if he had radically raised interest rates at the time of the bubble, there would have been a torrent of criticism of him for prematurely denying people the benefits of this great economic bowl. the lesson we should learn is that is often what we pay these guys to do and they should be willing to take risks. host: springfield, missouri. caller: mr. stokes, i would like to talk to you about the panama canal. whenever that is finally widened, you will find that this will really affect our economy, with the interstate freight that

goes across the continent now. we will bypass through the panama canal and will affect us did something for you to look into. guest: to be honest, i never thought of that. it is my own ignorance here, and i will look into that. very interesting observation. host: tennessee. good morning, dave. caller: i just had a comment and question. i agree, as far as trade is concerned, it has got to be cyclical. that has -- there has got to be benefits on both sides, and we have to know more about the countries we are dealing with for benefits to take place. i hear a lot about regolith -- regulation, regulatory problems, and i don't think people are looking at the regulators enough.

when you of got a central bank involved their names as what is going on -- their name it says what is going on. you have a central bank attempting to centralize power. i want to get your feelings on that, and figure out white more attention is not being paid to those responsible -- why more attention is not been paid to those responsible for the crime scenes. guest: the caller and i may differ on a basic philosophical premise. in the era of globalization, there are some functions that need to be centralized, and there are others that need to be decentralized. one of the challenges that we and the europeans and others face is how to get the balance right. i do think the major economies need a central bank. the caller is right that we should be more rigorous in our demands on the central bankers to make the right calls.

as we talked about before, in retrospect, it would appear that we did not raise interest rates fast enough for the crisis took place. we may have been able to take the edge off of that. that was a failure of regulation. but to suggest that somehow if we had been more decentralized in our monetary policy, we would have had a better job, i don't think that would be the case. host: bruce stokes of "national journal" is our guest. the topic is the european debt crisis. what is going on in england with the protests -- are we going to see that happen with other countries as more and more budgets are cut or look at? guest: one of the things that we as a nation have to be a bit worried about is that europeans are going through a period of austerity going forward. there will be consequences of that austerity. when is the rising of tuition rates -- one is the rising of

tuition rates in britain. there will be cuts in social welfare spending, cuts in defense spending. the already spent a lot less than we do, and we have complained about that for years. there will be less of that. the burden of defending the world will fall even more on our shoulders as a result of this. one of the great accomplishments of post-world war ii era is peace and stability in europe to to the extent that that depends on the social welfare net in europe, if that social welfare net becomes more porous and more people fall through the cracks and there is greater political instability as a result, we have to realize that there may be some consequences here that will destabilize the transatlantic relationship in ways that probably won't be in our self-interest. ,ot much we can do about that

but i do think there is a consequence. will we see that kind of social protest in the united states? my guess is not to that extent. there had been historically, at least in recent times, less of that than in the u.s. but we also or in uncharted territory. we have an unemployment rate that has been higher than at any time since world war ii. if that persists, we will see a type of instability. what we have accept political instability when we have these huge shifts in -- what do we have accept political instability when we have these huge shifts in congress in short period of time? host: you have 30 seconds. caller: my question is about the moral hazard of bailing out , and thatonomistes

creating political problems in other countries, and allowing them to spend, knowing that they will get billed out themselves? guest: great question. europeans are asking this right now, how much of a penalty should bondholders pay? the contradiction is that even suggesting that in 2013 bondholders will have to take a hit, the markets went wild and the government had to intervene to help out ireland. there is a timing problem here. i agree with the caller, though, that at the end of the day bond holders have to take a hit in the crisis. host: what is going to happen next in ireland? guest: there will be essentially an election, very soon, actually. there is some strong belief that there will be a change of government in ireland. host: