from washington, the mclaughlin group. the american original. for over two decades, for the l issue one, the american

dream. >> the economic expansion that began in the middle of last year is proceeding at a moderate pace. supported by monetary policies. we will and fiscal policies. we will continue. >> america is recession weary. now in its third year since the meltdown and more bad news this week, item, jobs vanish. employment last month dropped 301,000 workers. item, banks busted. 96 banks have shut down so far this year on track for the highest number in 18 years. item, markets wobble. the dow fell 6.6% this year. the s and p has dropped 5.0%. item, confidence plunges in june. from 62.7 to 52.9 on the comforts board index. 10 points in one month. item, retail sales,

manufacturing, auto making. all down. little wonder that the fourth annual metlife study of the american dream shows that the percentage of americans who believe the u.s. economy will be the same or worse than last year is 67%. two out of three people, which is consistent with the position taken by the federal reserve board chairman, ben bernanke, in his testimony to congress this week. >> even as the federal reserve continues prudent planning, we also recognize that the economic outlook remains unusually uncertain. >> despite the hardships, optimism lives on. 70% of americans still believe they will some will some day li american dream. >> question, currently americans are resilient. we bounce back. what explains that resilience in americans, pat? >> john, dreams have always died hard in america and the reason they die hard is because this country has been such a magnificent success for so many

hundreds and millions of people. for so many centuries. it really has and americans are resilient people. they are innovative people. they are hard working people. but the problem i think we have now, john, is we are no longer the producers we once were. we are consumers. we used to be a family centered society. we are now a self-centered society. consumerism takes up 70% of everything we produce. we don't save like other countries did. it's the character of the nation and character of the regime, if you will, the government, we are a welfare, big government state that we weren't when you and i were growing up. i think there are a lot of changes. >> why didn't you say the immigration population, because it is a land of opportunity. >> but look, the immigrant population today, they come, john, and the vast majority of them become beneficiaries of government who pay less in taxes than they consume in benefits and that's a change

from the generation of 1890 to 1920. >> eleanor, you think we still have a hard work ethic and hard work brings results? >> i am going to quibble with several of these statistics. the stock market has recovered half of what it lost when the real collapse happened. the gm is going gang busters in china. i wish i had the statistics at my fingertips to refute what you said about immigrants. i think they are the life blood of this country and hard working and they feed into the american dream. americans are optimistic by nature and other people want to come here. they used to think the streets were paveed with gold. they probably don't think that anymore. we have an education system that is pretty accessible to everyone and education is the ticket up here. so we have a mobility between the classes that you don't have in a lot of parts of the country. the one part of the american dream is that the part about

your children are going to do better than you do and i think that's not the case and so some of those values are changing. >> the assumption is that hard work and personal ethic are rewarded in this society. is that still true of today? >> that is true. if you take big risks, there's a chance for a big reward or big blowup. big failure. that is part of the fabric that has driven american success and prosperity over so many decades and so many centuries. i think when you ask about what is unique about america, i think that holds true. if you go back to the founding of the republic, you look at this rag tag bunch of country farmers and country lawyers who pulled themselves together and defeated the world's greatest army, the british. ever since that time, john, we have had this incredible pioneering spirit, whether it's the westward movement or whether it was going off into space. i think now we had a temporary pause. like all temporary pauses we've had throughout our history, this too shall pass and i think

the question of optimism is a good one, because i know all previous generations have felt optimistic, even in times of shorter recessions than the one we are experiencing now. positivity will come back. >> seth, welcome. do you think that the performance of political leaders affects the attitude towards reward and reward is given for good work? does it affect the american dream? whether or not we have good leaders? >> the american people feel that the playing field is not as level as it once was. that the hard work is not all that it takes. it takes a little bit more help than that. and they don't feel advantaged by their leaders right now. they feel disadvantaged by their leaders. to your point about why the dream is alive and kicking with all of this terrible news. one thing that we didn't bring up is that the dream has become as much about the journey as it

is about the destination. meaning that the dream is our guide post. the dream is something that keeps us from, you know, keeps us from getting out of bed in the morning. it's also just as much about the journey as it is about where we're trying to land. >> john, let me talk about the leaders. there's no doubt the leaders do make a difference. let's take herbert hoover versus fdr. whether you agree with fdr or not, jimmy carter and ronald reagan for eight years. the dramatic changes, though they started off with the country really in a slew -- >> there's another reason why he was so popular. he had tax breaks and those tax breaks, an economy that grew by 9.8% while he was in office. >> his ideas worked, but he inspired the country. >> he inspires people into it? he bought their confidence? >> after 3 1/2 years of ronald

reagan before the great recoverytook hold. >> this gets to beth's point, whether people perceive their government as helping them or not. all this massive government intervention, americans want to say, get our free market back. get out of our way. >> as the leader we want to bring back from the 80s. i think -- >> why don't you join now? >> no, let's talk about president reagan. he was at 42% popularity. he had unemployment of 10.8%. and he managed to come out of that. it is way too early. tax cuts have been dancing on the grave of president obama. >> the metlife study, and by the way, congratulations on it, beth. the study shows that average americans are still optimistic about being able to achieve the american dream in their

lifetime. the final question, is that optimism well placed or is it misplaced? >> i mean, i have to agree. i have to agree with eleanor. i think for the coming generations, it's going to be -- our generation worked very, very hard and got a great deal of success. coming generations, i don't know if they are going to do well because of the depth of manufacturing in america. the size of government, the size of regulation, the society, welfare state. i don't know. >> you mean that's squeezing out the basic core of capitalism? >> the government sector is squeezing out to private sector. >> eleanor. >> you can go down all the negative ledger or you can look at the boundless opportunities now that we have this world of the internet. you can look at a new economy that is going to have to come. that green economy is going to have to be produced and you look at more and more opportunities for education in this country and i think the

millenniums, they say great. i'm going to have three careers in my lifetime. i don't have to depend on one employer and i'm going to get a gold watch after 20 years. they look at all these things as opportunity. i think that is in the american spirit. >> monica crowley. >> one of the great things about america, john mclaughlin, is that we are self-correcting. so we have had hard left progressive presidents and administrations before and it produces folks like ronald reagan, pat buchanan, and the country does correct and that's why i think the optimism is well placed. > the first thing he -- >> he can't stand to let the other side speak. it's unbelievable. >> i think it's well placed and i will amplify what monica was saying about self- correcting on an individual level. the reason why is because people believe in the dream because they believe in their

own abilities, attitude, and work ethic. that's healthy. that's heartiness. they also are saying, and i haven't seen this too often, e dream. >> the answer is, it issue two, the impossible dream? ♪ [ music ] >> i'm feeling it. when i shop for food, when i pay my bills, like rent, cable. >> got a 12.5% reduction on my salary and it's affected me a lot. i bought a brand-new car last year and barely can make the payments on it. >> the american dream was once defined in terms of material possessions. their price, their number, the dreams core elements used to be net worth, asset accumulation, buying power, and of course,

brand. lui britone, ralph lauren, east hampton second homes, those were the marks of success. the mantra, he who dies with the most bling wins. not anymore. during this gm, great meltdown, the metlife survey says the american dream has morped before our very eyes. consumption is caput. personal relationships trump bling. friends, family, marriage, children, bling is out. people are in. 77%, almost four out of five people in this country say quality of life is defined by improved relationships and 87%, almost nine out of ten

reevaluated priorities to put emphasis on personal relationships. 58%, almost three out of define the american dream of having family and having children. >> question, what do americans see as the main ingredient of the american dream? beth. >> they see financial security trumping family. although now out of necessity, because they are trying to hang on. >> they want a safety net. >> they do. >> look. i disagree with the end of what you set up. i disagree that the whole idea of the american dream is about who is going to make a lot of money. who is going to have a yacht or home. it always was a sense that community, a sense of family, a sense of group friends and things like that. and enough in life really to get along without all this excess stuff. harry winston, i don't know anybody i ever heard of, except a couple people in new york was interested in that junk. >> that's junk, pat. >> that was pitched for the

ultra rich, basically. maybe a lui viton knockoff, or the average person style. yeah, well i think that always has been an element in american life. it used to be known as keeping up with the jones' is what it was called and a lot of people measured their success by cars and the house in the suburbs. but i do think that when the economy contracts, people look for satisfaction, content, and closer to home. you look at all the internet dating sites are very popular. i think people are looking for relationships. facebook is reaching out, all these fake friends, but friends nonetheless. >> you think becoming italian. friends and family, but also economic stance. >> food and wine and grapejuice. >> maybe, i hope so. >> sweet do nothingness. >> right. well look. i mean, i certainly think that is part of the trend that we're

seeing coming out of this great recession. people are going back to what really matters, which is family, good relationships, because so many other things have fallen away and everything that we once thought we knew for sure, upward mobility, the house we'd always be able to meet that mortgage payment, that is no longer true. people are going back to the fundamentals. that doesn't take away from the threads, that all those things you mentioned, most americans probably don't have them, but they aspire to have them at some point. it's aspirational and that's not going away. >> beth, your study says 67% of americans, that's more than a consensus, believe that the recession is going to last for three years before we recover. you think that's a further indication that we will turn more to family and friends because the country is faced with that as the alternative to high style? bling? >> i think people are going to continue talking about turning to friends and family and

building relationship. more so out of necessity than a deep seeded shift in beliefs. this relationship building, the price is right, first of all. and secondly, you know, they need support at this time. so it's not that people don't care about keeping up with the jones' anymore, they are sort of tempered that a little bit and may see more of that coming back. >> john, in a natural disaster, people tend to come together a lot more. all this individualism goes out the window. this financial disaster is the same way. i will say this, john, there's a big debate whether the economy, not look good. people are talking about this unemployment staying at 7% issue three, the demand deficit >> it's been hard. right now i'm unemployed. >> jobs are scarce. not a little, a lot scarce. >> oddly, the more americans spend and the less they save

makes the economy better. almost 3/4 of our gdp, 70% comes from consumer spending. the american consumer is the engine of global trade. from beijing to london to canbura, the wheels of international commerce are turned by the huge buying engine of americans. the nations that expert to the u.s., notably china and australia depend on americans first and foremost. the asian producers and the american demand keep the wheels of the economy whirling. 93% of americans now say they plan to save. 75% say they spend less now than last year. 77% save now. they are saving, but the result is a consumption deficit. that is a deficit of private

sector demand. that deficit demand kills a strong recovery. some say. remember, the fuel of the new american dream saving is in, consumption is out,d that is the problem some say. >> question, asians are the world's biggest savers. are americans going to replace asians as the world's biggest savers? >> not quite. a lot of americans are saving because the job situation is still so shaky, either they are unemployed or their job is on the line and so they are putting a lot of money into a nest egg, or as much as they can as a work against future upset in the economy. and in many ways, it is like the great depression generation. that generation saved everything. they saved water bottles, are s that, but when the economy comes back. >> you realize the chinese are

saving 10% of their income. >> john can remember the great depression and tell you how they were saving those water bottles. >> i remember roosevelt, which kind of is socialism. still around today. >> i bet you were a ccc boy also. >> that helped us sustain the economy. >> americans save probably now, it used to be 0. we probably save 5%. the chinese are up to 35 to 50 percent. it's mandatory savings and now they are starting to spend more. you are never going to get like the asians. >> the chinese are not presented with the consumers we have in this country. but they will. as they become a more modern society, they are going to over take us, simply by their sheer numbers. i wouldn't give up on americans as spenders, either. not spending as much now because they are scared, but that's going to change. >> what's the answer? >> there is no answer to the

paradox. that's why it's a paradox. >> demand, you have to have consumer buying before you have an appreciable asset in the economy. >> you have to have a consumer that makes things. >> we produce and the export volume is enormous. >> it is not. >> the chinese. >> the trade deficit is back up to 500 billion a year. >> every variation of a ipod and cell phone. >> the biggest export is computers. >> this is different than what the asians savings plan is about. this is savings for an emergency fund to not missing, not falling into disaster if you miss one paycheck. i don't know if i would characterize this as saving, it's not spending. it's an emergency rainy day fund. >> for the first of the safety net that people are desperately trying to build. >> without an agreement that there is a demand deficit. >> right now, there is. yeah. >> right now there is? >> right now there and that is

one of the reason why the economy is faltering. 70% of this economy is driven by consumerism. >> the government is trying to fill the hole. cash for clunkers, that type of program. you think that's the rule of the government? you think the government can fulfill the obligation? >> cash for clunkers and cash issue four, talking about my generation. ♪ people try to put us down ♪ talking about my generation ♪ >> my friends and i are all in a place where everything is unknown. especially those of us that don't have jobs yet or aren't going to school. it's scary. am i under qualified? am i over qualified? i don't know what i'm doing wrong. when i go to interview, there are people 20, 30 years older than me. people aren't leaving their jobs with the economy and

everything. there aren't positions opening up for us. >> economic crisis affects us all. it doesn't affect us all equally, though. its impact is as different as the generations themselves. talk about the baby boomer, the hardest working and most affluent generation in the country. 70% of boomers say they are unemployed and looking for work. barely one in three says they have achieved the american dream. the meltdown liquidated their home values, 401k's, stock portfolios. optimism that they will achieve the dream dropped 6% from '09 and '10. the boomers are swarming the ranks of the tea party, pulling are identical to pulling data on boomers. >> are the boomers reliving their youth by taking their protest to the streets, beth? >> no, they're not. there are 80 million boomers and few people on the street now. so the boomers are right now -- doesn't mean they are happy.

they are more stressed than they've ever been. half of them are losing sleep about making ends meet, but we don't see them taking to the streets in large number. >> do we see correspondent between the tea party and the boomers? >> the tea party is younger age, right under there. >> how about characteristics? antigovernment, antipolitician? >> that was a way back. >> it is gigantic. it was not only in the mud at wood stuck, it wases in the mud at kason. and it went out and voted, excuse me, for ronald reagan, even though there were radicals in the 60s. that's a changing generation and it's the most successful. they have tough times, but a lot of the tea parties are silent generations. 65 and over. >> i want to break

okay, generation breakdown. the nomanclature. greatest generation born between 1901 and no mangeneration x, age 29 to 4 generation neration z, age toda 16. all of these generations, which one fears it is losing ground most in achieving the american dream? >> i just want to finish what i tried to say earlier and that is that the baby boomers gave us a civil rights resolution, and the antiwar movement. so they put their name on the map. >> they gave us gay right protests, too? >> that, the gay rights protests are actually a later generation. you have the latest generations -- >> they gave us civil rights protests? >> they aren't bias against gay people in the least. >> the gay protests go back further than you think. >> the baby boomers are the generation that fear they have the most to lose in this

crisis, because older americans, silent generation, frankly they don't have that much time left. so they have saved and i mean, i hate to sound crude about it, but they already settled in their life. the baby boomer generation is looking forward to retirement and the retirement savings is gone. >> what is between the baby boomers and the tea party? what does not match? >> the tea party stretches across all demographics. it's not limited just to the baby boomers. the rejection of big government. the rejection -- the baby boomers were out in the streets with far left liberal mind set back in the 1960s. >> aside from the age differential, aren't the fundamentals exactly the same? the tea party and the boomers? > generation y, i think is more conservative. the baby boomers are in enormous success and problems, but generation y, they are being drop dead of their jobs, they can't be retrained. they have young people coming

up. here's the thing. >> the baby boomers don't. >> they are caught in the middle between the young people and the economy. >> they have more college degrees and advanced degrees than anyone else. they have a great deal of potential and living longer. i think th the economy is headed for a double dip recession. >> i'm afraid so. >> no, but very stagnant growth. >> no, as long as we can avert deflation. >> no, but stagnant growth. don't forget to join our

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