make. 1/3 of your life is spent receiving the funds and others

who pay taxes, and that is completely unsustainable. >> hence the problem with this issue. one small piece of this has gotten into a discussion between the two whether it is fair or accurate. look at what they have laid out. all hold much of major issues that have to be tackled. how do they get these things on the table? how did they get them to a point where decision makers have to step up to them? if they cannot clear the commission, how do they get them to the point -- >> i am really struck by what is going on in europe, even in greece, which was the first place with the robert at the road. there are riots in france, england, greece. yet those governments have not fallen. it is almost as if the people in those countrieie are in a lot of pain, a lot more in greece and

then in england or france, but they actually sustain the governments that have made these tough decisions. i wonder if our people would do that. >> unless i am mistaken, congress must extend unemployment benefits by the end of this month or starting next month, 2 million people will lose benefits. >> i think they will, even though it is a republican congress. this call to citizenship, what has happened in other countries, can only happen when you begin to make people think it is fair. the jobless people, jobless through no fault of their own, because of the kind of recovering we are having, have to be look after before you take away their mortgage deduction. >> there is a new bloomberg pole that is very interesting. it says that investors are run e world believe that barack obama is bad for the bottom line. 60% of u.s. investors think that he is bad for business, even

though the standard & poor's 500 index has risen since he was inaugurated and corporate profits have gone to pre- recession levels. >> goldman sachs at bankers got the biggest bonuses this year, $600,000 on average per banker. i don't know how these people can complain. the money obama spent was money that had to be spent in an emergency. it is not the onslaught of socialism. >> here is a poll -- a vast, dry eve -- vast majority of retirees think they were given the opportunity to live the american dream, but they have a forecast a grim outlook. 82% think it will be more difficult for their children to live the american drecm, 1.9% see the grandchildren having an easier time than they di that is connected with what we're talking about. >> but i don't see that, and i

have grandchildren. i expect my grandchildren to do as well or better, because they are getting the kind of the education that i did not have, and there will be better prepared to deal with this world. that is not true of all children in the generation, but there are kids coming along now who are going to be better prepared to deal with this global economy than we were when we came along. >> these retirees are very pessimistic, and is part of the same -- >> well, part is -- look, we are undermining our economy, as we heard from the commission, to the point where we are not going to be able to function, not going to be able to educate or invest it if we don't fix the debt problem. it is not as it is rocket science. it is eminently flexible. i will give you one example. the one success we had over the last 30 years was taxeform of 1986 -- reagan, bradley, a tip

o'neill, where they went and took a hatchet to all the loopholes and deductions in the tax code, wiped them out, radically lower rates. that is what the commissioners are recommending today. rates are 8%. -- 8%, at 10%, 22%. wipe out the deductions, minimize the economy, and the increased efficiency of the economy will produce wealth again. that was done in 1986, the last quarter century since, we have added on all of these crazy deductions. like barnacles on a ship, you sweep them away and a lower rates and ease easy and understandable, but it requires political will and agreement in advance -- you are not going to snipe at each other over

details. >> charles is describing an integrated thing where reduce spending, but whole thing, and it has a sense of fairness for ever wondered what is troubling retirees is that -- for everyone. what is troubling retirees is that there was a sense of an expanding world, i will do better than my parents. that is gone. we fear the chinese since replacing the american century, all the way down. >> is it a matter of psychology, nina? >> it is not just a matter of psychology. we were the ascended power for a half centu or more. now we have genuine competition for that position. nobody exists with the power the way we are, but it is likely going to happen. my 100-year-old father was reading the newspaper yesterday about the deficit commission, and was readingg about cuts in social security. "i am 100, i don't have to worry

about that." [laughter] >> i disagree. sure, my generation is pessimistic, but not the younger generation. the younger generation is not pessimistic. i had my grandson with me in china this past summer, and he saw what we have to deal with an outcome that is, but his generation knows that and they know they will have to do things differently. >> we have had waves and waves of predictctns of american decline. in the 1960's, after sputnik, it was that russia would overtake us, and in japan. guess what, it is not going to happen. decline is a choicand we can choose otherwise. >> thank you for the good news. the president in asia. >> it is undervalued, and china spends enormous amounts of money intervening in the market to keep it undervalued.

>> president obama at the g-20 meeting in south korea with his belief that china at artificially manipulate currency to keep exports cheap. ben bernanke and the federal reserve plan to pump money into our economy and the chinese accuse us of manipulating rrency grid colbert king, a former banker, will explain all this in the language we can understand. >> it is true. it is true for both sides. they are keeping currency rates so that they can sell to the rest of the world, and we're doing the same thing ourselves, and we're going to have a currency war. >> the result of which will be what? >> it will getets to a very dangerous place, almost like smoot-hawley during the depression. they will have to wake up and come to an agreement. but this is a bigger they neighbor -- beggar thy neighbor kind of policy.

>> but this is chutzpah for the chinese to say you are tinkering with policy. >> they have all this foreign exchange they have burned. what are they doing with it? they are investing it. they are earning money that they would never have been able to build if they relied on only domestic consumption. that is what they are doing. finding a way to force them out of that, there will continue to do it. not have a lot of trade. but we should try to have it on an equal playing field. obama has finally forced them to, i think, have this conversation. >> manipulators kerr thyself, and now we try to have power in manipulation. let us hope this bernanke trick works. qe2, that ship no longer sales, and it makes you a little nervous. palin was practically speaking a

foreign language this week on prime pumping and cease and desist and what it might do domestically. >> charles? >> the president had two jobs going to the summit. no. 1 was finalizing a free- trade agreement with the south korea. you don't go to a meeting with the head of state without that wired in advance. he comes out and he handed. he was handed a treaty to the bush administration negotiated one, but of course, always wants to reinvent the world and he has nothing -- obama always wants to reinvent the world and he has nothing. second, he wanted to rally other countries on china and pushing the currency parity. but you don't do that if weeks earlier your central bank essentially devalued the american dollar. it does not give you any ammunition. who attacked us? the brazilians and the europeans and the germans and others, who are going to be hurt by our actions as they have been by the

chinese. if your intent is to go into the g-20 and raleigh our allies, you don't do it a month after you devalue the dollar. it ended up that he had a hard time in korea, at two lack of successes in a row, very hard if you are president -- >> i agree with charles about korea. it was an absolute disaster, and he should not even have gone to the discussions if they were going to be already died but i disagree with that was an ego trip, obama's part back to this going. they pushed this deal l a democratic congress and they did not want it, because the domestic auto industry and labor unions. obama, not because of ego, but because of politics, tried to get more -- >> margaret wanted to talk about india.

>> and he did not get it. the end result was the same, he failed and he should not have failed, but he set himself up for failure. >> i agree, you don't want to lose face in korea. charles, even you must appreciate the warming of relations with india. the india trade was a great thing, and that is one path forward. >> so you read my column where i praised his actions? >> i did not read your column, but nina told me. [laughter] >> "i read it, but not personally." >> 8 let me say one thing about korea. agreed that he should not have gone into a meeting where there was not going to be a deal, but

unlike the deal that the bush administration negotiated, i don't think that kind of deal is feasible and current economic times. >> speaking of the bush administration, george w. bush comes out of retirement with his memoir. >> we had to deal with it differently after 9/11, and the threat he represented as a sworn enemy of the united states was to give weapons of mass destruction to an enemy that had just attacked us. a lot of people were concerned about it. when we did not find weapons, i felt terrible about it and sick about it and still do. >> former president george w. bush with oprah winfrey, discussing his book, "decision points." he thinks that the world is better off without saddam hussein even though we did not find weapons of mass destruction in iraq. >> and we did not find al qaeda, either. whatever you want to say about saddam hussein, a horrible person, leader, whatever, h was

a counterbalance to iran and he had not attacked us then. but there is an extraordinary thing about this book and the tony blair book. both men blamed the intelligence community for misleading them about the presence of weapons of mass destruction, and yet they say they would not change anything they did. that is astonishing to me. if you know that the promise for going to war was wrong and then you say "i had a reason anyway and it was ok," that does not fly. >> there were a couple of good reporters for knight bidder who were riding regularly that there was no evidence. >> what is so interesting about the tour he is doing is that it reminds us why the country actually like him in the early years of his presidency. when the war went south and went bad, the opposition to the policy transmuted into an intense, widespread hatred of the man, accusations that he let us into war, a criminal, a

torturer, etc. you see how affable and he said he is. he has not said a word about his successor, and this is a successor that spoke ill of him over and over, even in the inaugural address, references to how horrible were those eight years when bush was sitting a yard away. what is interesting is that he is not interested in re-entering the arena. this is not a guy who wander from young age like obama or clinton, who wanted to be a leader. he is the son of a president who ended up in the presidency, and he likes to come out of the limelight again and will as soon as the book tour is over. he is a decent guy, and part of the rehabilitation effort, which i think history is going to do, is the appreciation of how decent person he is and how that was sort of not overlooked but misunderstood deep into his presidency when the policies went south. >> you think history will

rehabilitate him, margaret? >> he is a gracious ex- president, but he was not a good president and his legacy is killing us. i actually read the book, and it is not that decisions were made well, but made quickly. he prides himself on this. he did not make the decision to quit on katrina. that is one of his few criticisms of himself. on waterboarding, he says "damn right." why? because his lawyers told him. and how you reconcile the sickening feeling about no weapons of mass destruction with no regrets about going to war? >> i have a different feeling reading the book of george bush that he did what the presidency early, and every pointed moment -- of their appointment on the day of his inauguration where he goes into the oval office and

his father joins thehim, he coms into the room, and george bush, a senior, comes in and says "mr. president," and bush comes from behind a desk and says, when " mr. president." and they embrace. that's a lot about what this meant to him to get there. the other thing i got out of this is the relationship between him and his father. it was distant because the relationship was between george bush and his mother. the fact that she had a miscarriage -- >> let me say a word about his legacy. i always thought he would end up like harry truman. he left office with low approval ratings, reviled, humiliated, and 40 years later he is rehabilitated by the david mccullough book and is considered one of the great

presidents of the century. the reason was, harry truman left in the middle of a war that was a grinding and losing war, at least a stalemate. i think history will decide it depends on how iraq turns out. if it becomes, like korea, a democracy that is an example in the region, history will judge bush the way judges harry truman. >> remember the pollster peter hart's question, who would you rather have a beer with, george w. bush or the other guy? he got elected. >> for the first time ever, they will say that tobacco products are addictive, and they will say in the bluntest terms that tobacco can tell. -- kill. >> the federal government is going to hammer the point home by notifying you on the packets of cigarettes that they're addictive and can cause cancer and lung disease and can harm your baby. is this big brother, charles? >> it is, and on this i am

completely inconsistent. as a physician, i saw the victims of tobacco. the public campaign against tobacco started by the surgeon general in the early 1960's has cut the rate of smoking from 42% to 21%, in half. it is one of the great successes of public help in all of human history, and the amount of ffering it has reduced is great but i think as a result of the prestige of the success of the anti-smoking campaign, it spread to things like smalt and obesity, how you sneeze on your sleeve and your hand. i object to that, but on smoking, i am a hard line. i would abolish it if i could. >> i would, too. all of us know people who have died from lung cancer because of this. my kids stopped me years ago by pointing to vince lombardi, who di of lung cancer.

the more they do, the better. >> and not to be cold-blooded about it, it has cost society a lot of money to pay for people who get all kinds of diseases from smoking. if it is in any state, so be it. we get the bill, so why shouldn't we try to reduce it? >> i'm so happy that government gets a good never something. maybe this will take it to 10%. you have to be reminded how horrible the way you die is. that is what these pictures will. the more the better bre. i love it when they bring out doctors smoking 50 years ago, camels are preferred by 60% of doctors. so long ago. >> last word. see you next week. for a transcript of this broadcast, log on to insidewashington.tv.