obviously the dow down big yesterday. asian, european markets down today. we'll break it down with our crew on "morning snow." ♪ >> every stock in the nasdaq 100 closing down. >> down 512 points. >> the market dropped 155 points in the last hour of trading. >> nasdaq closed at 5%. worst day. the dough jones fell like 513 points. could you have seen this coming? >> all right. good morning, everyone. yeah. all right. never mind. it is friday, august 5th. welcome to "morning joe." a lot to talk about this morning. with us on set to do that, we have the president of the

network reverend al sharpton. watched you yesterday. >> thank you. >> i like it. >> thank you. >> we also have columnist ezra klein who is filling in for martin bashir at 3:00. really? could they spread you all any thinner? starting at 6:00 a.m. we have richard here to talk about the global impact, the financial, can i call it a meltdown? >> you can, yeah. >> in washington, former chairman of the national republican committee, michael steele. it's good to have you on board as well. there's a lot of politics to talk about. willie is here, how are you feeling? >> good. >> joe is on the way. let's start with a massive sell-off on wall street. the headlines sending the dow plunging as they raise new

concerns of the strength and stability of the u.s. economy. we await the july jobs report due out in an hour and a half. the markets are tumbling this morning. the dow tumbling 500 points. a 4.3% loss in what one analyst calls an absolute blood bath. >> it's the worst since december, 2008. it was the ninth down day for the dow in the past ten sessions after posting modest gains wednesday. is there any hope of a rally after washington's debt ceiling fades? oil, gas and silver fell by 5%. the u.s. bond market is back on track for the sharpest week-long yield. the outlook is not much better overseas. european markets have been

sharply lower during big sell offs in asian. the nikkei closed lower. also, while we are at it, let's look at the political ramifications of the last week. the long debate over the fight of the debt ceiling sent disapproval of congress to an all-time high. a poll shows 82% disapprove of the job congress is doing. that's the highest disapproval rating since the times asked that question back in 1977. the same poll also shows after the debt negotiations, 66% of people are pessimistic about congress' ability to deal with issues. 12% say they are optimistic. 46% approve of the president's handling of the debt deal. 47% disapprove. public opinion of congress'

handling of the debt deal was not as promising. 21% approve of the republicans handling of the negotiates. 28% approve of the democrats work on handling the crisis. when asked about the motivation about the disagreements over the debt ceiling. 82% said it was for lawmakers political advantage. 14% thought politicians were doing what is best for the country. we will get to the tea party in a moment. let's open it up to the panel. ezra, looking at the polls and starting with the numbers and the plunge we saw yesterday, i have to tell you, i can't think of a reason to smile or be perky this morning. >> i'm going back to bed. >> yeah. let's characterize it as it is. politically and in terms of the economy, what is the word that is used at this point? >> i'm not worried about the politics, yet. if we get the economy right, politics will take care of

itself. this is an important point to make. we in washington, well i guess we are in new york, but in washington we look at everything globally, it's a debt ceiling deal. how much stimulus we do or don't do. what happened yesterday, in addition to no gross prospects for us. the early jobs data is very, very poor. the euro is cracking up. it's not clear if there will be a euro in a couple years. china is slowing down. you have a situation where there's not a clear space for recovery in the global economy. the markets are waiting for a story of hope. >> reverend sharpton, i'm struck as we look at the numbers, how little politics mattered. a two-month fight in the debt ceiling in cuts. we were told the markets would

be calm if we could reach an agreement. the dow dropping 512 points. it's like the fight is irrelevant. >> the fight was relevant and we were having the wrong fight. >> right. >> the problem you have when you deal with the market is you deal with certainty versus uncertainty. you deal with confidence. i think embellished by -- as ezra was saying, what's going on in europe, the whole euro zone, you combine it with our dealing with the deficit reduction mentality rather than a job creation mentality that moves consumers to spending money. do you make a milk shake for disaster? we drank it yesterday. >> richard haass, big picture, global picture, how would you characterize where we stand in terms of the global economy?

>> well, the bottom line is you have to be worried. what you don't see is growth anywhere. behind all the numbers in the united states, an anemic u.s. recovery. way below historical norms. europe has been drifting for years with the exception of germany and a few other countries. you have the reality when you strip it all away. the growth is low. jobs are not being created. they are disappearing. when you speak to people in the economic policy -- we had a meeting. what was truly depressing about it, you look at the normal things you would do. you can't stimulate the economy. the federal reserve system in the united states is basically done. interest rates as low as they can go. you say to yourself the normal instruments have been tried or taken off the table. it's hard to avoid serious pessimism looking down the road.

>> there's no tools in the tool box. it's what everyone is saying about our economy. what is being done about jobs? what initiative is out there that should have been jump started a year ago, maybe two years ago. this is a little, i have to say, i'm nervous. i'm nervous. >> you should be nervous. >> ezra. >> richard mentioned, a lot of the tools in the tool kit, it's not that they aren't there. what's fascinating, the debt went down to 2.4%. they have not been lower. the market is begging us to give them somewhere to put their money. we have, virtually for a moment, anyway, capacity to do the stimulus to help the recovery. >> not going to happen. >> you don't. it's the point. things that are not politically

feasible are not feasible. >> i want to look at another poll number. the tea party approval at a low. 20% have a favorable opinion of the tea party. it's down from 26% in april. what is left for the president if we work on the assumption that a new giant stimulus package will not make it through? it's kind of a nonstarter at this point. what are the options left on the table? >> there are very few. the reality that everyone in washington, new york and europe are having to face this. we are all in recess. mr. haass hit it right. you look at the fed and the european financial centers, the reality is folks are looking in the tool box going what is left. to ezra's point, it's not enough to get us to the next phase. there has to be a political solution with the financial

solution. it's what it is for a lot of folks right now. you have two philosophies of how to stimulate the economy. >> michael? >> yeah? >> it doesn't seem like anyone in washington wants a political solution. everybody is accountable to that. >> i agree. absolutely. that's the politics of 2012. you are not going to see the kind of solutions that are going to be necessary, whether it includes revenue enhancements through cutting waste, fraud, abuse, looking at the various programs that have real costs associated with them. nobody is going to touch that. no matter how you dance on the pinhead, no one is going to do anything serious to address the problem. >> richard, al, both of you, we are at a situation where this president passed up twice on the bush tax cuts. passed up twice on the opportunity to reform. let's not talk about tax cuts,

let's talk reform. we can use different words, if you want. twice passed up. am i right? >> i don't know if he passed up on it. he had to pass it. the problem is he didn't have the votes. >> there was a window. there was a window. >> i think on to michael steele's point, the only way this is going to happen is with this crisis. i think the public is going to demand we get past the politics. when you look at the polling numbers of the low confidence that the american public has in congress, at some point, they all have to run. >> by the time the public gets through to washington. what i meant was, richard, in terms of the opportunity for tax reform for revenues, how can we not have that, yet cut entitlements, which i'm all for if we are fair about it, to some of the most needy people of the population. we are going to have a big problem in your society.

i don't want to sound extreme here. we are heading down a dangerous road, are we not? >> you are right. i's not limited to the united states. what we are seeing in the united states, in europe and japan is the so-called mature economies. they are having not just an economic crisis. you can no longer build political and social support and consensus for doing the things you need to do. it's frightening. it's not simply a level of economic performance. we are facing unemployment not as a transitional reality, but in a permanent reality. what will it mean for social stability? how are you going to provide the necessary social nest for societies where a lot of people are elderly and needy? they need to absorb it. what you are seeing in europe, what you are seeing in the united states, what we have seen for two decades in japan is you cannot get the politics to mesh.

if you are not worried, you should be. people want to say we have always worked it out. it's going to work out. it's not true. it's not going to happen by itself. adam smith is not going to appear. there's not going to be an invisible hand that does it. what you are seeing in europe, it's too much. it's too big. the scale of the problem in places like italy are not easily fixed. the political machinery is not up to the challenge. in the united states, we are not sure if our political machinery is up to the challenge. >> .3% of growth there. .3%. we want to turn to cnbc. they are live in london. good to see you today. ezra pointed out, this is not just an american problem, it's global. what's happening this morning with the markets over there? >> i'm tired. i am tired. the markets have been open for three hours.

a half hour into trade over here and things started flip-flopping. it was really negative heading into the markets with indexes lower than 100 points. we opened super low then went higher on the italian banks. we were talking italy and the process of whether or not they would be able to bail out italy. it couldn't. italy is one of the biggest economies here. the italian banking system is relatively sound. they have been undergoing changes in how to structure the banking system. that is why maybe we are seeing a buying up of the italian banks thrown out with the baby, with the bath water and toys yesterday. higher by 6%. all higher by somewhere in the region of 4% to 6% to give you the tone of what's taking place. we are seeing a lot of losses

across the board. to give it to you in another term, in terms of losses, they are trading lower by 3%. we have seen a shift within the past half hour. in 20 minutes, really. the main losing factor is real estate, down by 5%. this morning, basic sources and financials were trading off completely, now real estate. >> thanks so much. italy is the focus there now. let's talk about the jobs number coming up at 8:30 this morning. we'll have it live here. it feels like that baked into the cake. no one has an expectation it's going to be a great number. what does the number mean if it's 75,000 or 90,000. >> that means we are where we expected. we were here for that last month. it was carnage.

75 or 80, we need 120 to keep up with population. if you get less than 120, forget digging out, we are backsliding. if you see numbers like 200, 300 or 400, we are not recovering, yet. >> michael steele, i'm sure there's a republican candidate with all the answers and is going to be the saving grace for this country. truly walks around with a light shining over his head or hers because he's such a vision of hope. >> okay. >> do you have a question? >> is that a question? >> i'm just saying we spent a long time getting into this crisis. i'm not saying this isn't this president's problem, it is. it took a long time. you don't get to these numbers in two months. >> you don't. you get into a crisis like this in ten to 15 years.

it goes to a lot of spending and other policies put into place. with respect to the republican candidates for president, more argument has been for quite some time, this is a good moment to lay out a clear pathway you would articulate. it hasn't happened. it adds to the level of doubt and confusion of what tomorrow looks like. >> a good moment to lay out. you should have stopped there. a good moment for them to lay out. >> it's a great point. a great opportunity. i just don't see -- >> no. >> too cautious, the politics of it. >> tippy toe. >> it's not just tippy toe. it's tough. you have to suggest thing that is are going to go against orthodoxies. >> the republicans don't have have offer an alternative. it's a referendum. >> anyone thinking this is the

moment for an independent cant? >> it's time the president stands up to republicans saying they brought policies that led to this and blocked him all the way. >> it's not just that. that's the problem. you want to play that ball, you are going to wind up in the same position we are in now. >> look at the polls, michael. it's not what the american people are saying. >> the problem here is congress. the idea we can fix that by changing our presidents, i have never heard a clear story of how bloomburg changes or transforms congress. >> michael bloomburg is going to be on the show monday. we are going to talk about his $130 million program for blocking latino men. $30 million of his own money being put in.

>> they are on wall street. okay. coming up this morning, we are going to bring in jor john kerry, maria bartiromo. up next, politico's top story of the morning. don't miss willie's week in review. first the forecast with bill karins. bill. >> the markets tanked yesterday, so did tropical storm emily. it went over hispaniola. now, we have turned our attention to the story with us all summer long. that's the heat. 108 yesterday in dallas. our friends in oklahoma city were 108. it's where the worst of the heat will stay. beautiful from boston to new york and philly. dry and beautiful weather. as far as the rest of the country goes, another beautiful day in texas and oklahoma. let's go through the weekend forecast. a chance of showers and storms from new york down to d.c.

hot in dallas. as we go through our sunday on the eastern sea board, afternoon showers and storms. sunday is going to be cloudy, cool and damp. if you are waking up over manhattan, you are watching "morning joe" brewed by starbucks.

♪ that's right, it's that time of year again, folks, when the president tries to convince us he was born. we're not buying it, obama. everybody knows that american presidents are born in february. that's why it's called presidents' day. i'm not the only one who is angry. so is sean handy's voice. >> the economy remains in

tatters. how does the president react. he throws himself a lavish birthday bash. >> instead of going to a birthday party, he should have been working on the recession. now it's going to last four more hours. >> jon stewart had a great bit last night where he presented the president with a birthday gift. >> oh, dear. >> we'll show you that later. patrick has a look at the politico play book. patrick. >> good morning, everybody. >> tim pawlenty is feeling confident with his chances in iowa. let's listen. >> i think we are going to do well. i'm confident of that. the same straw poll is more of an organizational thing than a

poll. when my record gets out, reducing spending and doing health care reform with no mandates, government take overs and justices and more, we are going to get more momentum. i think you will see that next week. >> where is he getting the confidence from? >> the expectation, two notable things he said i'll do well. what does very well mean? also giving him an out. this organizational popularity. he's only polling 7%. it's behind michele bachmann and myth romney. he's not going to throw an organizational power behind the straw poll saturday even though his name bb on the ballot. saying if i lose there, everybody is going to say i don't have a chance of winning the iowa caucus in february. 4%, for him to say he's not going to participate in the

straw poll, it's hard to see. he doesn't have the financial or organizational strength to compete. he's $1 million in debt. he hasn't hired anymore staffers. to be at 4% and to say i'm not going to participate in the straw poll. how his campaign survives after this is hard to say. >> how big of a player is tim pawlenty? joe threw his name out as a great vice president candidate. >> it surprised me. it's hard to say. he was supposed to be a front-runner. he could with the vice president choice. he appeals to conservatives. if you listen to him, he said he did health care reform the right

way. he did a lot of things but health care is not one of them. i don't think he's figured out what he brings. if he doesn't uniquely bring anything, nobody is going to want him for vice president. >> is michael still with us? >> i'm here? >> who are republicans most energized about at this moment? >> probably bachmann and perry waiting in the wings. >> you think perry gets in? >> yeah. he has a chance to change the play here. the question is as you have seen with pawlenty, gingrich and bachmann to a degree. once they are in, it's a different ball game. how things settle down once you are past will tell the tale. when perry jumps in, probably

around labor day. >> patrick, the iowa caucus, it could be pushed up a little bit. explain that. >> yeah, right now, you see arizona and florida threading to move up their own primaries. they want to get a big part of the action, media attention that comes with being a big name. if arizona moves up their primary, then florida would move up their primary. you could be looking at an iowa caucus in december of this year. it could come early. i think this is academic exercises. these states want in on all the action. >> the order stays the same. it might move up a bit. thanks so much. >> thank you, patrick. coming up, a developing story overseas. a nato attack in libya killed

one of moammar gadhafi's sons. [ p.a. announcer ] announcing america's favorite cereal is now honey nut cheerios! yup, america's favorite. so we're celebrating the honey sweetness, crunchy oats and... hey! don't forget me!! honey nut cheerios. make it your favorite too! and i saw another store's ad for these crayons at a lower price. no problem -- i can match that right here. oops -- i don't have the ad. you don't need it. oh, what about a coupon for these pens? yeah. easy. what if i saw an ad for a special loyalty card price? done. can you spell "hobo" on this calculator? i can. o-eight-o-four. but upside down. nice. [ male announcer ] get low prices every day, on everything you need for back to school. backed by our ad match guarantee. and get free shipping on hundreds of thousands of items online to any walmart. save money. live better. walmart.

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♪ a live look at the white

house. good morning. welcome back to "morning joe." 32 past the hour. a quick look at the news. a spokesman in libya says one of moammar gadhafi's son is among 33 people killed in an air strike. the attack coming in the western part of the country. he was the leader of the army's 32nd brigade. nato says there has been bombing in the area. a spokesman cannot verify the report. one of gadhafi's other sons were killed earlier this year. before we go to sports, richard -- >> where are we on libya now? >> the world began with the humanitarian operation and escalated it to regime change. you escalate the goals, but not the means, it's prolonged. >> this is going to be a days long operation, it's dragged on. it's costing us billions. >> a lot of people losing their

lives. it began as humanitarian. we have a prolonged struggle costing a lot of lives. >> it's like somalia in 1993 except for the fact we got out quickly when people started dying. >> we have fighting among the rebel leaders. it's a reminder that if gadhafi were to go, that then you succeed. >> willie and i go to the orphanage at 2:30 every morning. we're driving and i'm looking at twitter. i have it here. i actually have it projected here. like the minority report. anyway, there's a quote from ross westgate, our good buddy. he said something like there are

decades that go by when nothing happens. then there are weeks that go by where decades happen. reverend, we are there right now. look at europe crashing. asia crashing. the united states, what we are in the middle of. it looks like things are going to get worse. look at libya and syria, look at egypt. egypt seems like it happened three years ago. >> i mean, it feels like mubarak in the cage after six months ago. unemployment numbers are coming out in an hour and a half. we can't get stabilized in one crisis before there's another. that is what has led to a lot of the uncertainty we are seeing around the world. the people at the bottom that have to live through this, imagine the stress and strain that you are trying to juggle living and you have all this coming at you.

no jobs. stock market plunged, no health care. congress is locked into a battle. >> it's so depressing. mika, you saw -- by the way, you saw last night brian williams great newscast. he comes in, sums it up. he goes to maria bartiromo. another broadcast, mika was talking about an amazing piece that they did at cbs about these five people in their 50s who don't have work -- >> it was a window of where we are at. one person was one week away from running through all 99 weeks of the unemployment benefits. these are talents, educated people in their 50s, looking for two, three years for work and

cannot find anything. multiply that across the board in this country, plus the young people, the drop-outs, the african-americans, the latinos. >> the drop out rate for african-americans -- >> it's terrible. >> we are talking act about getting into situations. >> it's a transitional phenomena. this is something different. these jobs are disappearing forever because of technological change or global composition. the skills they have become more and more outdated. if you are 55 years old, you may have years to live. the idea you are going to go back to school full time? come on, it's not going to

happen. people who can't get into the labor force. >> what about people graduating? when you hear people are graduating from ivy league schools and can't find jobs, think of 17-year-old african-american guys in the south bronx or gary indiana that drop out of school. they are looking at 30, 40, 50 years of unemployment. >> there was another great piece, you mentioned the "nightly news." ron allen did a story about a town in rhode island that declared bankruptcy. it had so much debt, it was cutting firefighters. the fire chief's salary was cut in half. this was going to happen in bigger and bigger cities. it's a snapshot of a small town.

how to pay out pensions and health benefits for city workers. they can't run up more debt. you are going to see that in bigger and bigger cities. >> it's much more like grease and other countries in europe. they are going bankrupt when you talk about it. >> i'm going to sound completely out of touch with reality, political reality, ignorance truly is bliss, michael steele. >> yeah. >> the past couple days have felt different to me. the days after the shooting of gabby giffords. i felt something was going to change in the media world and it did. it really did. i really think the crisis we are facing now is going to weigh

down a double dip recession is going to weigh down washington so much you are going to see democrats and republicans, the president and congress starting to work together. we are getting -- we are getting, if this is not wartime footing, i don't know what it is. a double dip recession will cause tragic consequences across this land. >> joe, i agree with you. the problem is the politics. the politics in this town as ezra and the reverend can tell you and others who talked this morning, it's so poisonous right now. the people, i think this is a people's moment. we saw the beginning of it other the last two years. the tea party explosion, i thought you saw more of those moments. it was constant. people felt under attack not so much from a partisan.

i think you are going to see a march on washington of untold proportions if this thing begins to escalate if people feel the pinch of joblessness and education. >> they need to focus on recolling and retraining the work force and get prepared for a new work environment. jobs are going away. they are going to be replaced by something. we have to repair and train not just the young, but those in middlemanagement. those out there looking for employment. >> if it were just as easy as all of our jobs being shipped over to china or india, fine, we could figure out a way to be more competitive. that's not the case. bank of america. i heard four out of five of all

transactions touch bank of america. 20, 30 years ago, that would have meant tens and thousands of employees in every community. now, i can't tell you the last time i have seen a bank teller. it used to be, i would get a bank teller if i needed cash or to deposit something. i'm not knocking bank of america, i can swipe and go. >> you can check out your groceries without a check out person. >> airports, everything. it makes it better. richard haass, there's a statistic. if the united states of america was only as productive as in 1993, we would have 20 million more jobs in manufacturing. we have become so productive,

these are the jobs you are talking about that are not coming back. >> it's why corporation balance sheets are doing so well. it's something of a jobless recovery. they producing much more with fewer people. this is where the training comes in. the jobs are just not going to come back. >> in the middle of that, the infrastructure is crumbling. >> consumer spending. that's the problem. consumers will have more. >> sports is next. we'll be right back. [ male announcer ] this...is the network --

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golf since problems with his knee forced him to miss three months. yesterday, tiger looking good. the putter looking on 16. a long birdie. 31 feet on that one. he shot two under 68. it went well. the leader, by the way, is adam scott. >> look how thin he is, by the way. he's really thinned down. look at him in the earlier days. i guess he decided to go trim. >> adam scott is the leader who is using tiger's former caddy. can you imagine if tiger somehow got in the final group and it was tiger, scott and williams? >> did you see the giants play last night? >> san francisco giants? >> yeah. >> i did. funny you should mention it. >> barry bonds was another guy who used to be trim.

>> giants threatening in the fourth, lee strikes him out. cliff lee with a complete game shut out. the pitching staff is ridiculous. 3-0. >> the championship series, if the phillies don't win the n.l., it's crazy. >> the giants are looking good. >> yeah. >> the american league. >> american league, man. >> we get it tonight. >> a-rod's publicist says the third baseman is looking forward to cooperating with the mlb as they investigate a high stakes poker game. the yap keys now won seven strait. look at that point. boston lost to cleveland. the yankees and red sox tied in

the american league east. they get together tonight to start a three-game series at fenway. >> is that not perfect? >> no better. >> the only way it could be better is we are not in the rotation this weekend. >> you have friday and sunday. >> john luster agaips cologne. joe, this is for you. first college football poll is out. number one team is oklahoma sooners. 42 of 59 votes followed by alabama, oregon third. lsu is going to be good this year, then florida state. >> can you believe that? >> now, they are going to be number five in the country. one name not on the list, auburn ranked 19. that's the lowest rank. >> you know danny sh yny sherid.

he's talking big people. >> up next, willie's week in review. labored breathing ]

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i'm excited. what's it going to be? >> the week in review. >> what made the cut? >> you are about to find out. ♪ >> at number three.

remember this crew? after a month of national focus on the debt fight in washington, the 2012 republican field stepped out of the shadow. >> we should have a president who agrees to cut cap and balance to the federal deficit. >> mitt romney was silent during the debt debate. he finally managed to come up with an opinion after the deal was sealed. >> he did this. he waited until it was a done deal then came out with a statement. >> jon huntsman dazzled people with his "charlie brown" theme, "tickling of the ivory". michele bachmann held a iowa campaign rally over the phone? if you want me to vote no over raising the debt ceiling, raise your hand. >> number two, the last pan

bender. russian prime minister vladimir putin dropped in on summer camp where he did rock climbing, arm wrestling and frying pan bending. with putin's embarrassing public failure to bend the frying pan, critics suggest he stick to what he does best, martial arts, fly fishing and singing. the number one story of the week -- >> on the surface it looked like a satan sandwich. >> the august 2nd time bomb was diffused this week by a last-minute debt deal that tasted like satan to some and like a slice of heaven to others. the lone bright spot in a depressing process was the

surprise appearance on capitol hill of gabby giffords. she helped pass a deal that brought calm and comfort to the market. >> the stocks fell off a cliff. down 512 points. >> 513 points. could you have seen this coming? >> the economy was vaporizing before our eyes but the president celebrated the 50th anniversary of the day he was born, somewhere. >> i was born in hawaii, august 4th, 1961. >> the 50-year-old president turned toward winning another four years in washington, at least one member of his economic team, couldn't wait to get out of town. ak a number of people's trays are not in the full upright position. >> that was good. that was good. that was good. >> a long week in washington.

mike barnicle is going to join the conversation. where's he been lately? >> sleeping? oh, that's sad. someone wake up grandpa for the tv show. we'll be right back. the safety of onstar is now available for your car. ♪ [ recorded voice ] onstar. we're looking for city hall. i'm sending directions to your car. [ recorded voice #2 ] turn right on hill street. go north for two miles. ♪ [ man ] this is onstar. i got a signal there's been a crash. do you need help? yes, please. i've got your gps location. i'm sending help. [ female announcer ] introducing onstar fmv. get it installed on your car at best buy or visit onstar.com for more stores. energy is being produced to power our lives. while energy developement comes with some risk, north america's natural gas producers are committed to safely and responsibly providing decades of cleaner burning energy for our country,

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>> massive 500 point sell-off. >> the bears are mauling wall street. >> watching it fall. >> the worst day for s&p 500. i don't know what happened. >> happy birthday to you. >> top of the hour, welcome back to "morning joe." reverend al sharpton and ezra klein along with michael steele in washington. i'm joined by mike barnicle. >> let's talk about the sell-off, then to mike barnicle for what happened yesterday. >> the dow went plunging over the strength and stability of the u.s. and european economies. we await the jobs reports due

out in an hour and a half. the markets were already tumbling this morning. the dow falling 500 points. posting a 4.3% loss in one analyst calls an absolute blood bath. it's the worst single day point drop since december, 2008, during the height of the financial crisis. the ninth down day for the dow after posting modest gains wednesday. as any hopes for a rally after washington's debt ceiling fade. commodities didn't fair much better. oil, gas and silver fell by 5%. the bond market is headed for a decline. the outlook is not much better. >> the news must be better in europe, right? >> no. >> rising tide with -- how is that going? >> no can do.

european markets opened slightly lower. japan's nikkei closed 360 points lower. >> mike, it's all, everything is coming together in a horrific way. europeans doing really good. i would say buy gold. maybe glenn beck was right, buy gold. even gold was down. maybe glenn beck was right. mike, the situation is absolutely terrible. the united states of america is, we are going to have to push the reset button and washington is going to have to figure out a way to get the economy kick started in. >> can they? we have been through three months, joe, where it's really, really necessary to reduce

government spending. it is necessary to reduce the size and scope of government. how do you reduce the size of government spending and grow jobs at the same time? i have no answer to that. >> ezra klein, i was recommending that we actually destroyed all of our support on separate basis by co-authoring an op-ed together. we may actually agree on something together. you can do two things at one time. if congress steps forward and says we are going to make tough choices on entitlements, defense spending, war spending over the next 20, 30 years, the markets will recognize that and give them what they need. spend money on infrastructure. you can do two things at once, can't you? >> many in washington would like

to pretend this is so tough we can't do anything about it. the tea party is so tough we can't do anything. what they say they want, deficit reduction and stimulus is not imposed. there are two great takes that go together. the bond market lends us money at 2.4%. you cannot tell us, if we spend $100 billion building the infrastructure where there are 15% to 16%. we cannot get a return equal or higher than 2.4%. >> you get more deficit reduction. >> ezra, here's the deal. you say $100 billion, let me as a small conservative government say if you take care of the debt over 30 years, again, it may be tough politically, but in accounting it's fairly simple what you do. you take care of the long term, the markets let america borrow

$500 billion, a trillion. >> the problem is, you cannot have a jobless consumer rise. it just doesn't happen. you have to put money in the consumer's hand. aside from what is happening in europe is the markets are uncertain because consumer spending is down. consumers can't spend what they don't have. you can't have a focus just on bringing down the deficit and not creating jobs. >> in the long term, you take care of the debt. a lot of the changes don't happen for five, six, seven years. the markets will recognize that. it's like readjusting the 30-year mortgage. in the short term, you can make investments. >> right. how do you do it with a political climate where they are playing the 212?

>> i think you can. we do it on the show and everywhere, the fact washington doesn't agree on something, you can't not talk about it. when you try to tell people what makes sense, you back off because congress won't listen. 311 compromise. $3 spending cuts. for every additional dollar you get more deficit reduction later. tie them together. it is $4 of deficit reduction over ten or 12 years. it is exactly what the economy needs. it makes perfect sense. there's not an economist around that doesn't say we can't do that. it's not a good reason for people outside to back off and stop saying this is what needs to be done. >> michael steele, let me go to you, fellow republican -- >> yes, sir. >> if you are talking spending more money now, obviously, a lot of people are going to be

concerned on the right. >> yeah. >> it's like if you talk about addressing entitlements in the long run. the people on the left are going to be concerned. let's talk reality. this is the reality we face and you can do whatever you want with the reality. you can ignore it if you want. the fact is, the economy is starting to slow down now because government dollars that helped state and local governments are hurting the economy. you are seeing crises on the local level go to the state and national level. it is a reality. it's something conservatives are going to have to face like liberals are going to have to face. >> without a doubt. i think ezra has an interesting point about the 311 theory. it touches on the right

buttones. you didn't get back to the same spot. what programs are we cutting and what are we replacing them with? the more we talk about this, the better this thing has to move forward. the talk can't be in town. it's going to take place in municipalities and board rooms across the country. it's going to push washington to act. it's a zero gain town. you win, i lose. the argument is not an either or. we can have a strong national event and education our children at the same time. we can provide border security and keep jobs at the same time. what are we prepared to sacrifice? we have not been asked to sacrifice anything. going back to when the war began under the bush administration to this current moment. we need to come together around

an action plan that moves the country forward with all of us making the appropriate sacrifices. yes, i'm going to feel more coming out of my paycheck because i know it's going to help that brother on the corner get a job. >> right. >> i'm going to fee more coming into my economy because i know people are helping to build a bridge to the future. it's what people are looking for. the candidates on the republican side have a real strong chance to make that argument. >> you know, mike, as far as the economy slowing down, we have massive deficits for five, six, seven years. it has to do with big spending with bush and president obama. you know, obviously the slowdown makes it much worse. if we had a double dip recession, it goes higher. the debt is going to go higher. >> if you don't reinvest in the

economy, stop a double dip recession. you are mazing a massive slowdown. '95, '96, '97,'98, the freshmen class went and fought the cuts. cuts that were small by washington standards. then, when the economy took off in '97-'98, it was like you saw a huge wave, trillions of dollars crashing into the federal government's coffers. it's when bill clinton rushed back to washington, d.c., to sign a balanced budget plan. if he didn't, they advised him, the budget would fix itself. >> something happened. it's cultural more than political or economic. it is this. we now have a tendency as a

nation, as a group, rather than to think you know, geez, what happened? are we in a recession? what happened? now the first instinct is to blame someone. it's obama. it's obama. he did this. the tea party did that. we have a tendency to blame someone or something. in washington, they go at big business. big business goes at washington. they refuse to realize they have a common thread here to make us better as a nation. corporations, fortune 500 companies, they are responsible to their shareholders. that's how companies grow and companies prosper, by taking care of their shareholders. in congress, they don't think of us, voters, citizens and shareholders, but we are the shareholders in this country. how about doing something for us as shareholders?

>> we need to call a shareholders meeting. >> you have to fire them. >> you really do. >> mike, this is how people feel about congress' about to deal with the debt negotiations. 12% are optimistic. 66% pessimistic. 19% tuned out, no effect. 3% totally tuned out, no opinion. >> i think we have lost sight of the theory we have. every percentage point of growth you have is $2.25 trillion in spending growth. you don't need as much on medicaid. it's much easier to pal balance the budget. it goes the other way, too. the reason you worry isn't because it's a moral issue.

the reason you worry is when the economy is doing well, the crowd does a private market. if they can't borrow, if they can't borrow, they can't grow. it is so weak and there's so little demand. you need government until you see the crowding out, then the government has to get out. it's true. spending on the other side. government has to cut back and give it room to grow. the economic theories under our concern. deficits are always bad and growth will come back. it isn't how it works. we need to take this stuff seriously enough to try to understand it. >> as mike said before, michael, you look at, i'm sorry.

you look at idiots on the right blaming obama for the debt. >> right. >> alone. and idiots on the left blaming the tea party. like yesterday, yesterday's drop, we hear it's because of that stupid nothing debt ceiling deal. it had nothing to do with it. both sides are pointing at each other. people are not stepping back, like ezra said and figuring it out. why did the '90s go the way they did? because bill clinton made tough choices in '93 and '94. republicans made tough choices in '96. you talk the 311, spending cuts, massive revenue growth. >> you did. all of that went the way of the

do do in 2000. the mind set in the town changed. it became an either or proposition. the things we are talking about here were kicked off the table. if mike barnicle is successful, then ezra is not. if ezra is successful, i'm not. it's not how we have worked up to now. tip o'neill and president reagan came together over big issues to solve big problems at a time the nation needs them. the people of the country need the government to step up, grow up. >> president obama saying he can't get the party to work with him. >> here you go. >> here you go, reverend al. >> we start talking about not dealing with the red and blue, it's straight out of red and

blue. >> he was making a good point. >> he was and you ruined it. >> he channelled what a lot of people have been saying, like the president. i think what we need is on both sides. >> right here. >> yet you tried to blame one side. >> no, i tried to exalt one side. >> exalt. >> that's the point. wait a minute, reverend, that's the problem. >> hold on michael. >> you know what, the president is a lot more interested in exalting whatever, bip bipartisanship. >> the president and the republicans say to their respective sides, we have to make tough choices. hopefully, out of what happened yesterday, we are going to have to come to that kind of

leadership. whoever does it on the republican side will challenge the president. >> at the end of the day, it's important how we figure it out. we have to get more paychecks into people's hands. they go to the movies, out to dinner and we are on the road to recovery. >> michael steel, thank you. >> we are sorry that reverend al engaged in mean spirited -- >> yeah. >> it makes me sad. >> go to higher ground. >> coming up, senator john kerry, tom brokaw and eugene. also andrea mitchell. first, bill karins with a check on the forecast. bill. >> tropical storm emily fell apart. we are focusing on the incredible heat wave.

we are on pace in dallas to break the record in 1980 of 42, 100 degree days. here is the forecast 108 to 106 this weekend. we continue in the 100s next week. we are eight away. it's a close call. not a record you want to break. the forecast in the northeast looks great. no problems for the get away friday. record heat continues in the middle of the country. storms in the southeast. a quick peek at the weekend showers and thunderstorms to the east coast. a cold front coming through. sunday, you'll notice the same areas have a chance of storms. d.c. cooled off. dry day today. thunderstorms over the weekend. you are watching "morning joe" brewed by starbucks. i love that my daughter's part fish.

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♪ the white house doesn't create jobs. the government, together, white

house, congress creates policies that allow for greater job creation. there's not one single measure that solves this problem. we can also do what this president has done is cut taxes for small businesses. small businesses are the greatest job creators in this economy. >> with us now from new york stock exchange, the host of "closing bell" maria bartiromo. host of "andrea mitchell reports," andrea mitchell. i don't know where they get the names of these shows. >> amazing. >> maria, andrea. >> they deal with market research. >> exactly, the focus groups. wall street takes a terrible tumble. asia follows, europe follows. people waking up today are

trying to figure out what is going to happen. what are the futures going to look like? >> a lower open. it hinges on the employment number that is will be out in an hour. we are expecting job creation. 75,000 jobs expected to come out for the month of july. if it's weaker than that, it could be problematic. yesterday on the heels of weakness in europe, this is also partly europe because of the european debt crisis going on and worries that's spiraling there. there are a number of issues people are looking at. it's not just the u.s. economy and the lack of job growth. probably will see weakness today. >> i was watching the coverage late yesterday, there were a lot of people with their hair on fire. your analysis, you seemed like you were saying this is one plus one equals two and explaining

the reasons this happened. there are many. you didn't seem surprised, am i wrong? >> right. i wasn't surprised. we have an economy that was looking like a soft patch and worsened. the problem is, if we were to see the economy weaken further, it's not priced into the market. i mean we have expectations for earnings. the corporate sector is the strongest area. companies hitting on $2.5 trillion in cash. they are lean and mean after the 2008 blow up. they cut jobs and spending. they got the balanced sheet strong. the corporate sector is strong. we are now worrying that's going to change because of the worsening of economic growth. if we were to see the earnings picture get impacted because people are staying home, not spending money, losing their jobs, that's the reason to see a market that is further declining

in the future. i would not underestimate what the last two months of craziness, the back and forth of the debt ceiling. i would not underestimate what that did to the month of july in terms of economic growth. we will see the result of that in the next months. it made everyone stop and not make long-term commitments and we were unable to move forward. >> andrea, let me ask you what we do next. what does washington do? does bernanke go back to the well? are we looking at qe3? what are we doing? >> maria would be the first to tell you, there are no bullets left. you'll hear the president make a speech. he's going to talk to veteran groups about entering the work force. he's got to speak about the

economy, no matter what happens with the jobs numbers. the problem is, him and every other leader is saying it's about jobs. there is nothing in terms of policy they can do, not politically viable. i mean you can talk about all the prescriptions you want but nothing is going to get through. in this area where one party is talking austerity and the other talking stimulus, they are going to have a hard time even having this supercommittee. you may be facing triggers at the worst possible time for it to happen in terms of the economy. >> i think she's right. the political polarization is real. i think the climate change has to come from the city. they are going to have to be a push from people on their legislatures to really find this to be unacceptable. we have to produce jobs.

i think the private sector, they are saying you are having mayor bloomberg on. you have to have people from the private sector as well. you are sitting on $2 trillion in cash with private corporations. they have to say, yeah, we are nervous, but we have to invest in bringing society back. we are the ones making it. in all this, we are making more money and it's costing more jobs. we have to invest in where society is. >> mike? >> maria, as you know, i am in charge of asking the dumbest question of the day. here is the question. >> okay. you have a lot of competition for that. >> i don't know. >> i keep reading and hearing this is a jobless recovery. i want to know, if it's jobless, how can it be a recovery? >> it's a great point, actually, mike. it is recovery because if it were a recession we would see

negative growth. the official definition of a recession or going back to a double dip is two quarters. we are in a recovery given the fact we have seen economic growth but small. as you heard jay carney say the white house cannot create jobs, businesses create jobs. they will not create jobs if they are afraid of the environment. yes, they have $2.5 trillion in dash, but they are not spending it for two reasons. they don't know who it's going to look like in six months. dodd franks rules are being written as we speak. they are worried about their expenses going higher, taxes, a host of issues on regulatory and policy issues. they are worried the demand is not going to be there. businesses want to create jobs.

they want to do so. it's not realistic if they believe the business is not going to be there. adding new heads to the payroll and having to get rid of them. business leaders who recently tell the president, the president came in and asked, why aren't you hiring people? go hire people. they looked at him, didn't say it to him, but thinking are you kidding me? so many of these companies were on just three years ago because they overextended. they are making profits right now. again, we talked about it this morning, if the consumers aren't buying things and you don't have the demand out there, then you are not going to hire more people to work for your company just to sit there for a couple months and get fired. >> that's in the market. it's why we are seeing this in

stock prices. if demand is not there, businesses are not comfortable enough to create new jobs. the earnings picture is going to get hit. we are all worried about it. maria, thank you. andrea, stay with us if you can. >> three families changed in different ways because of the war in iraq. >> anybody who says they are not scared is full of it. when you have it coming at you and bouncing off your hood, it's going to scare you. >> we are going to talk to tom brokaw about his new special, the road back, when we return. [ woman ] welcome back, jogging stroller. you've been stuck in the garage, while my sneezing and my itchy eyes took refuge from the dust in here and the pollen outside. but with 24-hour zyrtec®, i get prescription strength relief from my worst allergy symptoms.

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it was like a ritual. 6:00, 7:00 in the morning, mortars in the gate. every time i heard a bomb, i would call him, are you okay. he said stop worrying. the next morning, i got the phone call. >> saying? >> he got kidnapped. >> that was an iraqi woman. tom brokaw follows three families through the war in iraq chronicling their lives from 2002 to present day. he joins us now from big timer,

montana. this looks compelling, tom. >> mika, we chose montana because i live close to here in the summertime, but also they have 3600 residents and 48 people in military uniform right now. young people, men and women. 22 of them have served in iraq or in afghanistan. in communities like this across the country, the war is an every day reality. since this war began, i have been reporting on three families one living in baghdad. one an iraqi family who left iraq then went back to try to help rebuild it. another ran a squad rant. let's meet sergeant charles weaver. four months before the war began

i met charles weaver in ft. stuart, georgia. he was training his platoon because the sense of conflict in iraq was in the air. >> do you allow yourself to think, god i may get hurt or may not come back? >> of course. >> reporter: his wife dawn shared those fears. >> what happens if i lose him? what am i going to do? how am i going to prepay myself and explain it to my kids? >> reporter: march 19, 2003, the u.s. attacked baghdad to shock sue dam hussein into submission. weaver and his unit waged the battle for baghdad. when it came time to pull the trigger, no hesitation? >> no hesitation. >> after almost a year in iraq, he returned home to his base in

georgia. however, after the invasion of iraq, he was a changed man. wrestling with injury, sickness and just getting back into the rhythms of normal life. >> did you lose some friends? >> yeah, i did. >> reporter: there were more battles ahead. the great recession cast a shadow over the weaver family. >> i have been retired for a year and still looking for work. >> reporter: you know, as the rest of us are watching the stock market and paying attention to the debt limit debate in washington, d.c. and wondering about the future of american politics, these families so deeply involved in a war that has not come to an end, they have their own struggles every day, mika. we don't know when those struggles are going to end for them. >> mike barnicle. >> first of all, this is sort of a public service, this kind of

program. we live in a country where fewer than 1% of the people in this country are touched by the war at all in places like where you are right now, states like vermont which has the highest per capita casualty rate in iraq and afghanistan. could you give us a sense, because america doesn't have a sense, clearly of what it's like to grow up to try to raise a family, lose your job in an environment where so many have served this country. >> reporter: well, times are tough here. montana is tough. they deal with the elements and have been dealing with the economics for years. the state is doing well. the governor has more than a $300 billion budget surplus at the moment. the rivers were high so the fly fishermen couldn't come in. they have an enormous pride in big timber.

the people who go up and serve in uniform. when my friends complain about their kids not getting into a big league school, i say in montana the first choice the is marine corps. 48 people are in uniform now. we can't show it yet because it's still dawn but on every light post, there's a wooden, yellow ribbon with the name of someone serving in the war. they all know who they are. when i called to find out the numbers and who was serving, everybody had a keen sense of that. in these kinds of communities, mike, they have a longer view. they never, ever have a sense that they don't have an obligation in some fashion to enlist in the military in some form. >> andrea mitchell in washington has a question. andrea? >> you know, tom, one of the things that is striking and

brought home in your reporting is that the extraordinary number of people, the percentage from rural america contributing and participating in the military compared to the rest of the country. i was talking to the agricultural secretary and he says 44% of the people in the military come from rural america compared to 17% from the rest of the country. it's disproportional. >> yeah. you do, the working class communities and middle class communities, this is a long tradition. i add one more statistic to that. a number of the young men and women serving are in families that served in vietnam or world war ii before that. the idea of going into the military is not exceptional to them, it's routine in their lives. they feel it's part of their obligation. in other instances, they get the

opportunity for education with the g.i. bill or a skill they would not get otherwise. we have a military made up of people coming from outlying areas, small towns like big timber, montana and across america. this is a town emblemmatic of towns just like it. if you go to the other end of the scale, we have almost no participation from the educational institutions we call elite. the ivy leagues are just coming back to getting an rotc on campus. at the very top of the food chain economically. you get very little participation. statistically, it's not the case. >> hey, tom, it's willie. going back to staff sergeant weaver looking for work now, the numbers are staggering.

unemployment for veterans is higher than the average person. 20% to 25% homelessness. what are we doing as a country? what are we doing as government to reverse this problem? i don't think enough attention is paid to it? >> reporter: well, the new chairman, pardon me, the outgoing chairman of the joint chiefs of staff devoted a lot of his career to that issue. it's calling reintegration. how you find them jobs and also how you get them back to a civil society. 40% of the veterans coming back have ptsd which is post-traumatic stress syndrome in one form or another. there are a number of programs around the country in communities and at the veteran's administration to help communities recognize it and deal with it. what is striking to me is you

get little complaining from the veterans. charles weaver has not been able to find a job. i met with him in wisconsin. his wife has a job as a special education teacher. then you find so many of the others who say if i had an opportunity, i would like to go back and serve again. i don't mean to preempt your title but it's way too early in montana. >> you got me beat by an hour, tom. >> we thank you for being on the show. the "dateline" special, "the road back" premiers sunday. tom brokaw, thank you. coming up, the hacking scandal involving tv host piers morgan and paul mccartney. more when "morning joe" returns. [ male announcer ] imagine all of your missed opportunities

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♪ all right. 48 past the hour. there are new developments in the hacking scandal that brought down news of the world. >> really? >> yes. >> what happened? >> lawmakers in the uk are calling on piers morgan to testify before a parliamentary committee. >> are you kidding? >> he's denied he had any knowledge of phone tapping when he ran it from 1995 to 2004. morgan's name was brought back into the scandal on wednesday night after the bbc reported phone messages between paul mccartney and then girlfriend heather mills were hacked. >> it's got nothing to do with

him. how does that have anything to do with piers morgan? >> he mentioned a heart-breaking phone message he heard from mccartney to mills. in the article, morgan reportedly wrote, he sounded lonely, miserable and desperate and even saying, we can work it out into the answer phone. >> oh, my gosh. >> what is an answer phone? >> we went from big timber to big trouble. >> big trouble. wow. >> meanwhile, paul mccartney says he will contact them over that hack. all right. >> wow. andrea mitchell? >> andrea?

>> where does it go from there? so far they have stabilized the murdock regime in this country.t the major interests here are affected. that has not happened so far. >> and this hacking though -- i don't know -- he's admitted it, right, this guy? piers guy. >> i don't know he has admitted. >> he said he never illegally hacked but he listened to the phone message. >> maybe he didn't write the article. >> maybe he's friends with paul mccartney. >> maybe we've made a mistake. >> and paul said hey, piers listen to this deeply personal -- >> put him on speaker and played it. >> what are you talking about? andrea, i don't know if you know this, andrea is hosting the 9:00, the 1:00, she's got the 2:30, the 4:00, a hardball -- what else?

>> overnight shift. >> the 9:00 and 1:00 -- this is a great warm-up though. >> thank you so much. >> let's just pick an hour, what do you got at 1:00 today? >> at 1:00, hilda solis talking about the jobs numbers and we'll talk to tom brokaw. and we've got julian tet from the "financial times". >> great stuff. >> we'll be right back. >> thanks, see you later. >> we'll be right back, everybody. >> is what piers did legal? [ man ] this is my robot butler. say i'm missing england. i type in e-n-g... and he gives me a variety of options. would you like to have a look at a map, my lad? ah, why not? shall we check on the status of your knighthood? yes. again? yes, again, please! thank you. with my digital manservant, i'll never be homesick again.

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we've talked about a lot this morning in two hours and we've waited too long to get to the story of the day. today begins -- i don't know, i'm not a lawyer. >> i'm not either. >> andrea says he's in trouble. >> stop. >> what are you looking at? >> this is going to be a huge series this weekend, new york post called the yankees the bean stalkers, they've won seven games in a row. the red sox lost last night. the yankees, the big money red sox getting together at fenway, tied for first place with three

games starting tonight, john lester and bar toll lo colon. your predictions, two out of three the sox? >> two out of three, c.c., best pitcher in the major leagues will beat them tomorrow. i get a real kick of the fever pitch over the yankees and prospects and coming into fenway tied. i'm almost under the impression that you people think the world series is played in august. >> you can't flip the historical arguments you made on to us now. >> the little engine that could. >> you got the biggest payroll in baseball, we've got a bunch of kids -- you know what, like stick ball. >> i think i can. i think i can. isn't that inspiring story refer end al? >> hits me right here. he's a red sox fan too. >> yankees or mets, which way do you go?

>> according to -- who are we talking to? >> put your finger up in the wind. i'm a new yorker, you've got to get along. >> are you on tonight? >> straighten our tricks live at 6:00. >> i love it. >> he's got a message. >> i love it. your show is fantastic. love it. you've got pretty good too -- >> you know what he told me, you can't lose when "morning joe" leads into you, even though it's about ten hours early. >> exactly. >> there you go. thank you, reverend. >> thank you. eugene robinson next and john kerry and the big july jobs report coming up in a half hour. [ male announcer ] this...is the network --

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every stock in the nasdaq 100 closing down. >> fell off a cliff, down 512 points. >> the market dropped 155 points just in that last hour of trading. >> nasdaq nose dive, 5%, worst day -- >> a disastrous day of stocks in the u.s., the dow jones industrial average fell a stunning 513 points. >> could you have seen this coming? >> welcome back to "morning joe." a lot of people saw it coming. mike barnicle is with us. joining us from washington,

winning columnist and associate editor of the "washington post," eugene robinson. >> great to be here. >> yesterday there was a massive sell-off on wall street. and mika, that sent the dow tumbling down 500 points. >> plunging as investors raised new concerns over the strength and stability of the u.s. and european economies. the meltdown comes as we await the jobs report due out in 28 minutes. >> that is a big number at 8:30, isn't it? >> it could have another ripple effect. we'll see. the markets around the globe though already tumbling this morning. the dow falling 500 points yesterday and poechting 4.3% loss and what one analyst calls an absolute bloodbath. >> the president loves to talk about politically when somebody

launches a stupid attack, we're in silly season. it seems we're in serious season here, really serious season here. and i'm -- i really believe that washington may have to wake up a bit. if we have a double dip recession, that is horrific for everybody, not just economically, but politically. >> yeah, it is horrific for everybody. we've got to look at the jobs number at 8:30 and this amazing and disturbing and potentially disastrous debt crisis unfolding in europe. and wee've got to come to terms with the fact that things are not likely to go well unless we get -- unless we get serious and you know, dare i say it, kind of come together on policies that will be good for the economy now and good for the economy later. and we haven't really done that. we spent months arguing about a

debt reduction package that in the end doesn't do a whole lot. and doesn't do anything for the economy now. it seems like we need to refocus and in a hurry. >> you know, yeugene has a grea column in the "washington post." >> let's move on to our bigger economic problems. i did nothing and now i'm waiting for the bush tax cuts to expire at the end of next year. if we let income tax rates go to what they were, a debt problem that now may seem overwhelming suddenly looks quite manageable. a little growth, a little tinkering with entitlements and we're set for another quarter century or so. problem solved. now let's do something that might actually benefit the country. >> what we were saying last

hour, if you look at these problems that are supposedly impossible, the fix. there's some pretty simple fixes in there if politically our leaders in washington can figure out how to get from point a to point b. >> i think it is good to be humble. i don't know what we can fix but it is easy for washington to make it better. one thing that worries me on the show, i keep hearing people say things will get so bad, washington will come together and figure it out and -- and the thing i think -- this is a mod much people have long had of washington, it's proven to be wrong. the other party sees opportunity, they don't see a reason to come together. hey barack obama is going to lose this one, can you wait for rick perry, me neither. we have more problem coming together in times of crisis -- >> i just shuderred. hold on a second. go ahead. >> and so one thing i think we

should be clear about doing and it's why i keep saying you can't just talk about what's impossible. we have to be honest about what stands in the way. it's not just disagreement and not that people want the economy to fail. but there's no reason to believe right now that economic failure makes the two parties less partisan. initial stimulus, whatever else you want to say, barack obama's first initiative did not get one republican vote in the u.s. house of representatives. >> let's see how the shareholders as barnicle calls them feel. congress's disapproval rating at an all time high. and new new york times, cbs news poll shows, 82% disapprove of the job congress is doing, the highest since the times started to ask that question. >> who are the 14%? >> back in 1877. >> he asked the same question last year. >> who are the 14%? i'd like to meet those people. >> the poll also shows after the

debt negotiations 66% of people are pessimistic about congress's ability to deal with issues, only 12% are optimistic and 46% approve of president obama's handling of the debt deal. but public opinion of the debt deal is not as promising. only 21% approve of republican's handling of the negotiations and 28% at this point approve of on democrats' handling of the crisis. when asked about the motivation behind the recent disagreements over raising the debt ceiling, 82% say it was for lawmakers political advantage and 14% thought politicians are doing what is best for the country. now to the tea party. tea party approval also at a new low. only 20% have a favorable opinion of the group that's down from 26% in april. and 57% disapprove of house speaker john boehner.

>> so -- >> yikes. >> gene, are you as excepskeptis ezra that washington can step down and do something. as he said, a lot of republicans may be thinking we need to worry right now about getting a republican elected and a lot of democrats are thinking, hey, you know what, we've got to use paul ryan's plan against him to win our seats back and reelect the president. >> there may be two phases of crisis, i think. let me modify ezra's theory and say it's true that when we're in a crisis like now, the parties don't get less partisan. when everyone's hair is actually on fire, as right before the t.a.r.p. legislation, for example, in fact, washington can do things in a hurry. now whether it be -- did it do the right thing or wrong thing? it did something big in a hurry because we thought the economy

literally had fallen off a cliff. when things get to that point, i think we can -- we can get stuff done. but you know, those figures from the poll -- those figures in and of themselves are a problem because it indicates how little trust we have that our leaders to make stuff better, it indicates how pessimistic people are and that pessimism itself becomes a factor in kind of sustaining this or retarding the recovery and sustaining this sort of almost stagnant economic situation seems to be drifting into a second dip. >> well, on that note, with us now from the chicago mercantile exchange, rick san telly. what can you tell us? >> what do you want to talk about? >> what's it look like right now? >> let's talk about something happy. >> you want to talk about what movie you've seen lately? you want to talk about baseball

or the world markets on fire. >> we could talk about the world markets, you know, it doesn't sound pretty and it's nothing i ever thought i would say on tv but after all of the programs, the band-aids and failed policies and promises, whether in greece, portugal, europe, the u.s., intervention by the japanese, panic by the swiss that everybody wants to pile into their currency, close to $1700 goal, we're seeing worldwide somewhat forced financial enema that will cleanse the system because it has to happen. and no force is going to prevent it from happening and i think it's a lot more orderly than i would have thought. it's going to progress and i think when we're done with this we'll be better off for it. it's kind of sad we had to create this debt to come back to the same intersection and have the same accident. >> did he say forced financial en -- >> he did. do you have a question for rick? >> the intersection you're talking about, are you talking

about a new normal that we're going to arrive at over the next six months or a year? joe earlier was talking about if we are in a double dip recession people out in the street, you talk to them, they think we're in a recession now. what is at that intersection that you just discussed? >> mediocre growth and mediocre job creation, higher costs even though our financial leaders are saying deflation, we'll probably see stubbornly high commodity prices and i think there's a very good chance if we continue to meander through the huge issues, if we still see our political class thinking that the poor people and people that are promised programs and payouts down the road, we're not going to be able to deliver, you can promise all you want. it's sad. a new normal, call it what you want. but i think the days of 3.5, 4.5% growth coming out of recessions, you can see what

happened when the kool-aid of these programs, when the helium pumped into the marketplace turned into normal air and reality, we see what's happening now. so yes, i think it's going to be a new normal in terms of growth and all of the things that we expect after a recession, which is supposed to be a cleansing process, but it was prohibited for years. you know, many of the bankers for years have tried to prevent things like recessions. >> ezra klein. >> i'm as much with you on the cleansing analogy, which can mean too far. recessions i don't think are periods of cleansing fire, per se. >> but they are. >> ken rogoff -- we can agree to disagree. the best work on financial crisis have said we got this wrong from the beginning -- >> sorry? >> i said that in february of '09, didn't i?

a bit early. we can go back to the tape. >> we certainly can. about 3 million people have. >> what ken rogoff thinks in order to get past this, we're going to need a round of significant inflation. what ken rogoff has argued, we keep saying what is congress going to do and the politicians going to do? in washington, in the media generally, we overlook the roll of the federal reserve. if he thinks and rin heart thinks we'll have to go through a period of recession and it's going to be painful and move money around in ways that are unfair, is that simply the only hope? >> well, money doesn't move around in ways that are unfair. people that have it, control it or invest it, it's theirs and they put it places they deem appropriate. any outsider looking at that process using adjectives like it's unfair -- >> the shift of wealth from one side to the other creditors and

dealter --s. >> all of the assumptions are wrong. that's why the programs haven't worked. >> it seems sort of beside the point. >> it is the point. if we're going to talk about the economy -- >> should have failed it would have brought religion to the system, would have been a good thing but we prohibited that from happening. >> going to ezra's under lying question, do you believe that needs to be sped along now? >> i think any involvement by outsiders, feds, european central bank isn't going to help, no. i think we should let this play out as it's playing out. once we come to a new normal or a new stable foundation, maybe lower equity rates or lower interest rates, at that point maybe we can actually see congress after 2012 elections but we can see maybe they can

pull out knees crazy dodd frank bills that nobody can understand and cleanse the system of everything that seems to be slowing it down and let the entrepreneurs invest and maybe we'll deliver promises to people that are having rough times today. >> rick santelli thank you for injure cleansing thoughts. we appreciate it. >> ezra, what do you think? there's some people that have been arguing since february of '09, we can try all we want to try but at the end -- >> it's a school of thought in the great depression. it is a cleansing fire, everybody needs to fail. it is the unproductive being swept awap for the productive and it was a school of thought that failed and kept ugs in the depression longer than we needed to be. we were supposed to have learn ed from this sort of thing which ended with a massive injection -- the form of world war ii. that there is a roll for governments and central banks. ful we have forgotten that,

we're in worse shape than i thought. >> what do you say to the rick santelli's who would say the obama administration promised us if we did a, b and c, we would have 8% unemployment. it's worse because now we're hearing from a lot of people, that the doesn't work. >> the intersection rick was talking about, the political class in this country will do everything it can to prevent us from ever arriving at that intersection because it means defeat for most of them. to ezra's point about the great depression, one thing that we didn't learn from the great depression or perhaps have forgotten is that the history of the great depression. today writers write ballplayers play, bosses boss. in the great depression, leaders led. we have two few leaders today leading. >> gene, stay with us. coming up, we're a few minutes away from the july jobs report, a very important number this

morning. we're going to bring it to you live from the new york stock change coming up next, senator john kerry will be with us. you're watching "morning joe" brewed by starbucks. f!

with us from boston, democratic senator from massachusetts and chairman of the foreign relations committee, senator john kerry, he'll also hold senior positions on the finance commerce and small business committees. we wanted you on today to talk about faa and we'll get to that in a second. i've got to do rapid fire questions for you, you're known as -- like me, a guy of few

words. this is going to be easy. let's begin with what's happening up in syria, senator. so critical. what can the united states do? >> very little but i think what we can do is what we did at the united nations the other day. the problem is we don't have an enormous amount of leverage, nobody knows what the option is in terms of alternatives. we have to condemn violence that exists. i think president assad has really lost legitimacy. it's going to be difficult to see where this goes in the future but we don't have a lot of options, nor do others in the region. >> moving south, let's talk about libya. reports coming in overnight that another one of gadhafi's sons killed. are we making progress there? >> i believe we are. gadhafi is extraordinarily isolated. the fact is the opposition has grown significantly in its abilities. gadhafi will never run the country again under any

circumstances whatsoever, we have prevented slaughter from taking place in a number of communities and we've given these folks an opportunity to decide their future, particularly those who are pressing for democracy and for rights. i think we have to be more patient. it took ma las vich a full year before he left after the bombings in serbia. i think we have to learn to be patient. the pressure is real. i believe ultimately gadhafi will leave. >> the questions get more difficult now. yesterday a massive drop, 513 points, asia followed overnight, europe is following. are we in danger of a double dip recession? >> we are in danger of that, joe. it's one of things i want to talk about. i think people are -- look, i'm more in the ezra klein school as i listened to your conversation for a few minutes. this is a moment for leadership and people to step up and get serious about what our problems

really are. the debt deal we just did is barely a scratch on the surface of what we need to do. what is triggered what is happening in our exchange and globally is really europe. people are mistaking -- we are contributing to it. the perception that the american economy is weak, the perception that we have used up the available remedies that we have, the perception that we don't have a lot of ability to absorb shocks and the perception that europe can drive us even further towards that recession, all of those things are contributing to people getting out in the market. but there are margin calls in europe. europe has spain and italy $12 trillion of debt between them. and what happened is recently when the european community came together, they put a band aid on a wound that really requires major surgery. everybody knows that. the result is people are bailing and that bailing is triggered

into our market and that's generating additional fears of this double dip recession. the bottom line is that what we need to do -- and i feel very strongly about this, we've got to step up and start dealing with facts. with reality. and too many people in congress are making up their own facts and too many people are avoiding this reality and pretending that the only thing you need to deal with is the debt and deficit. the real truth is, america faces a long-term structural debt. i even heard you say this a little bit. it's not the immediate cuts. in fact the cuts for next year are about $22 billion. the cuts the year after about $44 billion. we can deal with that. but when people are looking at is the absence of a willingness to try to really deal with america's two-fold long problem. one, the structural deficit on medicare and medicaid and social

security and two, the lack of job creation, a flat economy, and an economy that frankly needs stimulus and needs a growth plan. >> that's what we've been talking about this morning. we can -- and the question is how do we get these two parties together? we can do two things at one time if we take care of long term strurkt toural debt, medicaid, social security, defense spending, all of the wars we're involved in right now and we make those long-term cuts and send the message to the markets, we are serious and we have taken care of the long-term problem, let a lot of tax cuts expire, close tax loopholes, do all the right things that send the right message to the markets, does that not give us in the short term, over the next four years the freedom to actually inject more? whether you want to debate tax cuts or talk about new spending

programs, talking about on the left and right, doesn't that give us the space to do that in the short term? >> almost completely but not quite completely. that is absolutely a critical step of it. it may be 50, 60%, can't tell you which, it's enormous. we have to do it. but we also have to do something immediately which is put a plan on the table for how you are actually going to grow america and play to our strengths. i'll give you an example. everybody is screaming for bipartisansh bipartisanship. kay bailey hutchison of texas and lindsay graham of south carolina and mark warner of virginia joined with me in proposing an infrastructure bank allowing us to take 5 to $10 billion and leverage about $650 billion of investment immediately into rebuilding america. if we did that, we would actually attract sovereign funds, money from china and

other places in the world which is looking for investments to get a decent return on investment. that is one way we could immediately put literally hundreds of thousands of people back to work. >> ezra, you bring up we can borrow that at 2.4%. >> where can they get more of a payoff than 2.4% over the long run? >> absolutely. >> i want to ask another piece of this. infrastructure bank is ano brainer -- >> we need to do it tomorrow, get it done right away. >> you mentioned $5 billion or $22 billion in cuts in the debt plan next year, but what wasn't in the plan was talk of the payroll tax cut. if those expires that takes billions out of the economy in 2012. what are the prospects for those two policies to get extended through 2012 this year in congress? >> we have to change the minds of those people in the house of

representatives who have appropriately focused on the deficit and debt but who have completely inappropriately left out any kind of plans whatsoever for how you create jobs and grow america. i mean, we literally -- everybody has talked about it, yes, congress was taken hostage, the ku country, the economy was taken hostage. we have criticism of the president, frankly the president had no choice here. congress had no choice here. we did the same thing the president had to do, which is save america from a default because a default would have been far more disastrous. what we had was a group of people who are completely unaware or didn't care about the consequences of their actions. they were actually arguing for a default, which would have been even more catastrophic with respect to what's happening in europe and what's happening here at home now. so we have to break that. and i have to tell you, i say

this to you positilitely. the media has a bigger responsibilities than it's exercising. they have to begin to not give equal time or equal balance to an absolutely absurd notion just because somebody asserts it or simply because somebody says something which everybody knows is not factual. it doesn't deserve the same credit as a legitimate idea about what you do. everything is put into this tit for tat equal battle and america is losing any sense of what's real, who's accountable or not accountable or who is real or isn't, who's serious or isn't? >> we're about a minute away -- >> barnicle has written this down. this is your responsibility. >> a minute away from the july jobs report. we're going to kill the break and keep this conversation going and simon hobbs will be joining us. >> can i add one other thing? >> in 15 seconds because the

jobs report is coming across. >> the crash of '29, it reminds you roosevelt took his foot off the pedal in 1937 by -- we went up to 14% unemployment. i believe we must do job growth now and i think the president ought to convene the g-8 and bring the leaders and we ought to get the european central bank, we need to get the federal reserve, the imf, we need to respond to this crisis so that the world knows we are leading our way out of it. >> and you just -- i'll just zone in on one thing you said, senator, as we have to have job growth now, nobody disagrees with that. the question i do hear around the table, and across the board even, is what is the jobs program? what is the initiative? whatever it is, shouldn't it have been started about two years ago for anything to kick in and have dramatic effect? we're in deep -- >> there are certain things -- >> mika, look -- >> that have an impact on the

economy and grow the economy. you can look at certain things -- >> they are coming across right now. >> we're coming around to the number up 117,000 nonfarm -- >> that's terrific. >> that beats the target. >> 9.1% is the number. >> 9.1%. >> ezra? >> again, it's better than expected. expected is 85,000. i can't go with terrific xgt we need 120,000 jobs a month to keep up with population. when we're under that, we're not only not recovering but back sliding, this is another month in which the labor market has not recovered one bit. >> let's go to cnbc's simon hobbs for a full analysis of this and we'll join back in our conversation. >> good morning. as you were saying there, we generated 117,000 jobs in the month of july. yes, it's very low but better than the market was expecting. we were looking for 85,000 job creation. the futures have turned around

quite substantially on the news. we're looking at an open of 141 points and climbing after a devastating day done here. because we've fallen so far in the market and spoken so much about the soft patch in the second half of the year being extended. i think this will be relief for the market because it will have priced in a figure. 168 points at the open. people down here are exhausted. this is some res spite from the selling at least at the open. >> we greatly appreciate it on breaking news. we've got senator kerry with us, we're going to back to him. right now, senator, not great news but i would guess today a lot of people on wall street, washington, across america, will take good news, it's higher than expected. >> let me tell you, it's a hell a lot better than being below

85,000. it's absolutely correct. we need somewhere 125,000, 200,000 jobs a month in order to really grow. i believe there are ways that we could very quickly put people to work in america at minimal costs. one of them is as i said infrastructure bank where foreign money helps to rebuild america with a return on its investment. another for instance would be it doesn't sound big, but let me tell you it is, there's a gentleman in massachusetts with a company currently doing energy efficiency on the congress, on the jefferson building, library of congress, buildings around america. it's a company that comes in and says, look, we will fund -- you don't have to pay for it. we will put the money up to receipt electroretrofit your building and put people to work doing it. all you have to do is guarantee us x portion of the savings. that's how we pay for what we're

doing. no money down, put people to work, we can do that all across america and those are the kinds of things we can do. we can have an immediate effect to a different kind of automobile that saves fuel and makes us more independent and gets detroit kicking into gear, benefit, win-win, more security, less energy dependency, cleaner air and people go to work. there are all kinds of things we can do. we have to -- have to find a way to get some of these people in congress who are locked into one view about where we can go. and that's really what's hamp hampered us, when i have a top senator in the republican leadership tell me he's been calling members of his delegation and can't persuade them to do something reasonable here, that all they are focused on is cutting, cutting, we have a problem. when we have people who think

default is a good thing, we have a problem. i keep viscerally getting very upset -- i keep hearing people refer to congress is broken and congress can't do it. it's not congress. and the institution is the same institution that was there when tip o neil and ronald reagan got together. it's the people in congress. and in this case, it's the minority of a group of people who are literally willing to throw the baby out with the bath water and do whatever they want because they've got a hard ideal logical point of view. the media and people at home have to begin to hold them accountable to a different standard of behavior. if the joint committee, the joint committee cannot -- john boehner, please. mitch mcconnell, please, don't appoint people with a preconceived idea of exactly what they are going to do. that will not serve the nation. it may serve party but that's not leadership. they need to put people on that

committee who are going to work for the interest of our country so we can decide how to deal with our long-term structural problems and put people to work now. >> all right. senator john kerry, thank you so much for being with us. we greatly appreciate your time. when we come back, we'll talk to gene robinson and the panel about the jobs report and what it means ahead when we return. [ male announcer ] want to achieve more with your money?

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40 past, taking a look at the jobs numbers for july, nonfarm payroll is up 117,000, unemployment rate at 9.1%. our political round table continues. u gene robinson is with us from washington. eugene? >> we'll take it. it's better than we thought. the market clearly overshot yesterday i think this will be an opportunity for a good day on wall street. that would be a great thing. the point that ezra made a few minutes ago is right though, this is not even quite sustaining rate of job creation in this country. so it doesn't mean that we're out of the woods, we've got a lot of work to do. that number needs to be twice

that essentially to really feel we're in a recovery. >> 9.1% but willie, the question is, what's the hope to get it to 8.5%? that's the hope to get it to 8%? right now you look at the sectors and not a lot of bright spots. >> there are not. we play this game every month of expectations where wall street sets a number, we had it yesterday, 75,000 or 8 o,000, anything above that was supposed to be good news. if you look inside the numbers, it's not great news, ezra was talking about the private sector added 154,000 jobs. we get to the 117 number by subtracting government jobs. the tick down unemployment rate from 9.2 to 9.1 is because people stopped looking for work. on the surface, you can say it's better than we thought but only because it exceeded some expectations by wall street. >> i don't want to give this -- everybody keeps saying it's okay, kerry called it terrific.

this is terrible. it's a terrible jobs number after a terrible three years. we cannot keep growing beneath population and we don't have any private sector -- enough private sector jobs coming back to sustain it. let's say we got to 200,000 a month, it would take until 2017 to recover. 200,000 isn't good enough. we need it to be much higher. we keep talking the deficit is an emergency. the jobs crisis is an emergency. the deficit needs to be handled but handled later. this is a pressing now problem. if we don't get this under control, this laughable to think we'll handle the deficit when we have 9.2 not having jobs. >> for first two years around this table we were saying washington needed to be focused on jobs while the democrats were focusing on a lot of other things. and then over the past six or seven or eight months, we're still talking about jobs and

republicans are talking almost exclusively about deficits and debt. i think the american people have been very clear for three years now what they want to focus on and washington is not paying attention. >> i think every single poll for the last three years, this is what people want us focused on and you know, it's not possible to really make progress on debt and deficit unless you have the economy growing. so even on that basis, it only makes sense to focus on jobs and growth now. but we have been saying that for years and it's something about washington is this sort of bubble of unreality that people don't get that. >> yeah, no doubt about it. >> gene, thank you so much. >> we appreciate you being here. i hope you have a cheerful weekend after this very happy

week. >> same to you. >> oh, my lord. i will tell you though, mika, buddhist monks when they go through a particularly trying time, you know what they do? >> what do they do? >> they go to msnbc and look at willie's week in review. that's coming up here. >> they play it on a loop. >> and willie, we've got that next so happy days are here again. >> the dalai lama has ordered today and we're going to review.

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♪ all right, it's been a pretty sobering show. that was the throw. i think you pegged me with it. let us now intox indicate you with a week in review. ♪

>> at number three, remember this crew? after a month of national focus on the debt fight in washington, the 2012 republican field stepped out of the shadows. >> we should have a president who agrees to cut debt and balance the federal deficit. >> mitt romney had been notably silent during the debt debate but managed to come up with an opinion after the deal had pretty much been sealed. >> he did this, waited until it was a done deal then came out and made a statement that he didn't like the deal afterall. >> john huntsman dazzled voterwise his charlie brown themed tickling of the ivory. ♪ >> michele bachmann displayed the difficulty of holding an iowa campaign rally over the phone from washington. >> do you want me to vote no on raising the debt ceiling? raise your hand. >> at number two, the last pan

bender. russian prime minister vladimir putin dropped in on a summer camp where he did rock climbing and arm wrestling and for reasons that remain unclear, some frying pan bending. with putin's embarrassing public failure to bend the frying pan with his bare hands, critics suggested he stick to what he does best, martial arts, shirtless fly fishing and singing fats domino tunes. ♪ on blue berry hill >> and the number one story of the week. >> on the surface it looks like a say tan sandwich. >> the time bomb was diffused this week by a last minute debt deal that tasted like satan to some and little slice of heaven to others. >> i've got 98% of what i wanted. i'm pretty happy. >> the lone bright spot in a

depressing congressional process was the appearance on capitol hill of gabby giffords. her vote helped to pass a deal that just as so many had predicted brought calm and comfort to the markets. >> a disastrous day in stocks. >> fell off a cliff, down 512 points. >> 513 points. >> could you have seen this coming? >> sure, the economy was vaporizing before our eyes but president obama did manage to celebrate the 50th anniversary of the day he was born somewhere. >> yes, in fact i was born in hawaii on august 4th 1961. >> as the 50-year-old president turned his sights toward winning another four years in washington, at least one member of his economic team couldn't wait to get the hell out of town. >> there are a number of people there who's trade tables are not in the full and upright

position. >> aus tan goolsbee's last day and can't leave soon enough for him. we'll be right back.

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welcome back. it's time to talk about what we learned today. ezra klein? >> better than expected is not good enough. >> not good enough. >> the number is not good enough. >> what do we need? >> a lot more jobs and we need

more action in washington to get us there. >> what did you learn, willie? >> this weekend the new york yankees will get their chance to topple the empire. >> that's sweet. >> well, and mike, that's a statistic made even more amazing by the fact that the sox don't pay our players what the yankees pay theirs. >> how truly pathetic and sad it is. >> sad and pathetic. you're excited about watching lackky pitch saturday night. >> can't wait for him to jump up there on the mound and give up seven runs in five innings. >> would you be wearing your running shoes at the game? >> yes. >> did you sleep in those things? >> yes, i did, very comfortable. >> you are guys are slobs. what time is it. >> it's "morning joe." everybody have a great weekend and watch mr. klein own