much for watching on christine for well we're back here in an hour and a half. cutter's that's so much the same you're going to make a lot of the place look at japan's unique and the world's first when a disaster hits a major economic and trading power the forces of globalization punish the.

wealthy british. market why not. find out what's really happening to the global economy with max cause or run no holds barred look at the global financial headlines tune in to kaiser report on our cheap. download the official. i phone the i pod touch from the i choose ops to. chauncey life on the go.

video on demand season minefield comes an r.s.s. feeds now an up. one of your. wishes on the call to. kick. start. the. flow and welcome the crossfire gang peter lavelle japan's agony and the world's anx globalization we are told is a process that can benefit all that's when times are good but when a disaster hits or major economic and trading power the forces of globalization punish the entire international system where does japan go from here. we can. discuss the impact of japan's multiple tragedies i'm joined by patrick young in vienna he is

the executive director of devi advisors and dallas we have lloyd dumas he's a professor of political economy economics and public policy at the university of texas at dallas and author of the book the technology trap and in chicopee we cross the michael lynch he is president of strategic energy and economic research and another member of our cross talk team yelena hunger all right gentlemen is this prospect that means you can jump in anytime you want michael i'd like to go to you first the first question a lot of people are asking looking at these horrific tragedies being played out in japan is what about the global recovery this friday gyle global recovery how much of it is japan's do railing right now temporary or long term going to affect the global recovery of the last two years. well the hope is that it's going to turn out to be a fairly moderate impact on the global economy the fear is that if japanese industry finds itself disrupted for a lengthy period then stock markets around the world could take a hit and we could be back in

a double dip recession but that still remains to be seen whether that's going to happen ok what are you patrick i mean what are the it when we look at the macro scale the global scale here is that we should mention here a lot of people are looking at the industrial capacity of japan which is key to its economic prosperity because it's an s. export country what would it take for us for investors in for the international community be worried about japan's recovery i think what it's really going to take peter is is the whole idea that we see further problems in terms of how we're going to fund the recovery because really the difficulty here is with government government have shot all their bullets they've spent all their money to pounds more noticeably than anybody else i mean they've got two hundred percent debt to g.d.p. ratio i mean that's three times the government debt of the united states of america and the united states of america doesn't look pretty by any extent and i think really the problem is that we're going to see ultimately the governments are going to try and kick the can further down the road in terms of keeping the economy going

but ultimately japan's impact on the global economy is not going to really help us in the short to medium term i think we'll find it difficult to avoid the double dip recession but at the same time i believe that actually in the medium to longer term this event is going to mark the end of or at least the beginning of the end of the terrible recessions and the terrible stock bear market that has played to japan for the past twenty years and it's interesting lloyd a lot of people are looking into it from a very different trajectory because japan is amazingly indebted but it's indebted to itself and and the japanese are horrendous savers here i mean taking virtue from the city some people say that is the kind of a blessing and economic blessing in disguise long term it will actually make the japanese government spend a lot of the savings that have been accumulated and to actually modernize the economy. he very difficult for me to believe that this is any kind of a person for japan or anyone else it's a terrible tragedy and it seems to me one of the things that illustrates is that

cole who is asian has a downside to that is we become dependent on each other on some disaster occurs in a particular area that's especially important and makes it send shock waves through the rest of the world economy for instance there was an earthquake i believe it was in taiwan a number of years ago he did near a facility that manufactured a lot of the semiconductor chips on which the world depended is a very serious matter i don't know the extent to which the news industry has been damaged by these events but it could certainly send shock waves all over the world and possibly trigger a double dip recession michael you think about it there are people that are saying that if the japanese can recover quickly enough from these tragedies big trading partners will look elsewhere and i'm thinking about our china and south korea their south korean economy makes many of the same things that the japanese do i mean this is something that the japanese have to be very worried about remain competitive as they reconstruct. i think it is there's always the possibility that you know you'll

see car sales for example especially south korea's is very closely compared it with . but i think what you're going to see you know the sendai area was not a big industrial area with most of the damage occurred so i think what you'll find is that in the course of a week or two industries will be able to patch things together and they'll be up in operating not not at full capacity but close to full capacity in most of the japanese and just and the export sector especially so yeah i think you'll see some some work shifted to factories in china south korea for example but i think the japanese are very resilient people and i think we will see a recovery when you think about there patrick i mean it is we is be point he's already had. i read it i mean i think the history. i've just come back from seoul i'm actually just was there until two days ago very clearly the people

of south korea are incredibly upset and worried about what's happened to their near neighbor in japan but at the same time of course i mean there is a possibility that we're going to see some shifting of things like semiconductor production in favor of korea the south koreans are making increasingly better and better cars which could substitute in the u.s. market and i would have to say i somewhat disagree with something that lloyd said which is you know this is a peril of globalization i mean i think before we had globalization of this sort of earthquake it had japan then they would just switch the light side and that would have been the end of the economy i actually think that you know the whole benefit of globalization is the incredible mobilization of efforts that we've seen around the world because this is just not tit for tat or a zero sum competition this is a whole business of growth and that's why the first people who were on the scene in the course of the last few days from the international community to try to help were actually the biggest trading partners with japan and also actually the biggest economic competitors with japan because it's all in all of our best interests as lloyd has also said to absolutely do everything we can to try to help this terrible

tragedy lawyer was going to go to you anyway i mean the perils in the benefits of globalization i think within this program we've already had it on there i mean does cut both ways and which way it will go we still don't know go ahead. yes i think what concerns me is the tendency toward over concentration of suppliers for critical elements in a few places that exposes us to dangers from natural disasters and that's a real downside but i think it's also true as was just said that this interdependence internationally is a very powerful thing a very positive thing and certainly economic growth is not a zero sum game we help each other in circumstances like this and in more normal times i think though part of what happens in japan i want to send is not in austria larry itself part of what happens economically in japan is dependent on what happens to those nuclear reactors because if things go to wrong and the wind shifts and the radiation drifts more over japan there could be

a very serious difficulty in getting people mobilized getting people out of their homes to do what needs to be done within japan itself and other areas let's all hope that that doesn't happen but that still remains to be seen ok well lou you kind of jumped ahead of me i was going to reserve the energy part for a lot of part of the program but michael fine go to you i guess a lot of it does kind of depend on what direction we'll go into is what's going to happen with those nuclear power plants which as we're doing this program no one seems to know what's going to happen there and unfortunately it is a pessimism is set in there i mean not only for japan but for the entire nuclear industry globally a lot is at stake right now and i don't want to forget about talking about oil on this program as well go ahead michael. yeah there's no question that i think that nuclear power station which has seven plants i think for those will be just lost forever which is going to mean a nice little boost in oil consumption in japan as they switch it would or

a lot later elenchi to replace that i don't think that will have a big impact on world markets though because there's still relatively slack despite the high prices which might seem to indicate otherwise but yeah you've got you've got to think that outside of places like china. maybe there is people are going to have second third and fourth thoughts about nuclear power now obama has said he's still pushing ahead but i think they're going to fight it the industry is going to fight just the it's public resistance when you think about that patrick is it still an open question here because i mean as i explain to my colleagues on this program we've been debating nuclear energy as long as we've all been alive you know it consciously alive anyway go ahead. oh absolutely and i think one of the big worries for me is not in this discussion but i think in the general news media that there's been an incredible amount of sensationalization of what is of clearly a very very difficult and precarious position but i wonder because it looks to me as if the whole nuclear industry our thoughts on of it has been framed more by the

simpsons television cartoon show than they have by logical and reasonable analysis and certainly when you look at the idea of you know mrs merkel who in germany is clinging on to power with only by a thread has suddenly said arts and crafts simply because she's trying to find anybody who might vote for in the near future that is not good for business and it's not good for the economy and i would posit two things in terms of the nuclear debate one is that i think we need nuclear anyway i do of course think that we need to look at the idea of were these plants were placed in relation to fault lines and so on the second thing i think is to kick the ball into the very long term court and maybe this is something that the japanese are going to pick up and run with because they've been an incredible nation of long term researchers and that is moving away from fission power in the nuclear world through its fusion power because fusion power is a lot safer a lot easier to use but of course it's going to take ten maybe twenty years of scientific development before we get there the difficulty is with the way that the politicians are reacting at the moment we could all be living in mud huts and caves

by the time they get around to actually building these plants because certainly there's no sensible debate towards an energy ok lloyd what do you think about that i mean with the nuclear power it's going to stay with his irrespective of the outcome of this tragedy being played out in japan today. i certainly hope not at least not in the long run nuclear power is an inherently dangerous technology it's not just natural disasters we have to worry about but also things like ordinary human error and even targets for terrorists for example in terms of ordinary human error the chair noble accident involved design problems with the reactor and the shutting off of a number of safety systems and the operation of the reactor at levels that were known to be dangerous all as a result of human error we will never get rid of human error we need to deal with technologies for energy and other purposes that are much less dangerous and give us a much more a much larger margin for error human fallibility and make us less of a target for terrorists in the short term we're not going to be able to do without

nuclear power and as we move in in the few toward the future the energy direction should be in the direction of renewable energy jump in here when you can see this important discussion after a short break we'll continue our discussion on japan's disaster state.

it's.

the official publication. i pod touch from the i choose our. video. feeds. on the. welcome back across the pond you know about to remind you we're talking about japan's triple disasters and its impact on the global economic recovery. but first let's see what russians think about the global economic recovery all

encompassing tragedy the disaster in japan has heard of the country its people and has a great impact on the world that's many now say it might disrupt big global economic recovery the agency levada said asked russians the prospects of russia's economy. sixty three percent say it will remain at the current level sixteen percent see negative changes and fifteen percent say it's about to improve but will to pass earth quake tsunami and nuclear disaster have the global economic impact and will modify the course of recovery that. ok patrick i'd like to go back to you and there's been three things that we mentioned this program and i want to tie them tightly together a possible double dip nuclear energy and the price of oil because they are all tightly interconnected in the oil producers and i must say mr gadhafi must be extremely happy right now with what's happened in japan and. the powers that be

brain there must be very happy as well because the addiction to oil remains doesn't change ok but you know obviously as you pointed out here we have different opinions in media and how to look at it on the car energy for civilian use what's the triad for you what do we push what do we drop push away from just to keep away from a double dip. i don't think we can avoid the double dip peter i'm sorry to sign so pessimistic it may not be particularly deep trouble there but i think it still has to happen all prices are simply too high for it to manage to sustain the economy and as you say the addiction is there and it's going to stay there equally i think in terms of what's going to take place in japan it's going to obviously be a long road to rebuild and we wished upon every success within that in terms of the nuclear debate i'm sorry i really totally disagree with lloyd i mean i think lloyd is coming up with really a sort of a lovely liberal children story book theory of word energy is going to go in the future the simple truth is that there's

a huge amount of capacity being built for efficient at the moment in places like china alone i mean twenty million gigawatts or something so huge number i just simply don't even manage to comprehend and they've got more plants coming along i think the idea that you can mix up fission power with fusion power demonstrates actually the level by which the debate is not being looked at credibly and ultimately this concept of renewable energy is a sham there is no such thing as a sustainable renewable energy that can get there without government subsidy we need a great deal of research into the whole process of energy before we're going to get there and ironically that's why the double dip is going to be good for us because the double dip recession is going to push people to look for new technologies and we're going to find new ways of dealing with energy rather than simply falling back on old fashioned remedies that aren't going to work ok lloyd if i go to you even in a way you and patrick agree on one level than disagree radically on another i mean it's really inevitable that we're going to stay with nuclear power for

a long time to come because of oil do you agree with that or not because we cannot remain so we do to our oil the way at the prices that we have now. for some time to come we will be reliant to some extent on nuclear power but nuclear power has been a heavily subsidized technology from its very beginning so to say that renewable energy would require subsidies or that's a problem is ridiculous both oil. exploration and nuclear power of been heavily subsidized right from the get go and if they hadn't been they probably wouldn't have developed especially nuclear power to the extent that it has in terms of this being some sort of a liberal fantasy the state for example the state of north dakota alone in the united states has enough to vela people when capacity to produce about twenty or thirty percent of all the energy needs of the united states all the electricity needs this is no kind of fantasy i was an engineering professor before it became a professor of political economy and i assure you we have the capacity to develop

renewable energy even more than today and supply all of our energy needs with it eventually but in the shorter term we will have to move to wean ourselves off of oil gradually and off of nuclear power as well and i hope these events in japan if they have any positive result at all who get a same the way from nuclear power and toward safer energy technologies michael. one of the tragedies of this huge tragedies in japan is that japan can't walk away from nuclear energy even if it wanted to right now even in light of what's happening at this moment. well no i mean they rely on nuclear power for i think about forty percent of their electricity supply and there's no way they could replace that in a short term now they may find that they can shut down some reactors for maintenance and upgrading but you know you're going to find five years from now they'll probably be using about as much nuclear powers are using today it's just impossible

to make that kind of change quickly you know these are huge investments you know putting in that many windows will take forever for example or even natural gas turbines which is one of the best alternatives so i think what you're going to see is that those four units will be shut down probably the others will come back on line at some point just as a three mile obviously brought the second you know back up and if i'd like to point out a chernobyl the same thing there is still one of the plant to chernobyl is generating energy even after that or if you ask actually patrick what about you i mean when again we look at japan's energy dilemma in a way to kind of a dilemma for the entire developing and developed world to me even is tragic as this technology has been as we speak right now they don't have a whole lot of alternatives a medium term in some people didn't say monger. i think absolutely right and i mean i'm michael's quite correct you know the japanese can't win themselves off nuclear overnight i don't think they should be doing so because i mean i do disagree with

the idea that we should be turning away from nuclear i think in the medium to long term there's definitely a much better argument to be made for fusion power than there is for any of the sort of recyclable renewable energy sources which simply have not scaled up when they've actually been put into production so far and i think you know the japanese people have a huge dilemma but on the other hand i suppose in one way i have incredible faith in the japanese people because they're incredibly resilient they're still a cult and they're a brave people who've managed to overcome incredible problems in the past and in that respect i'm fairly confident that they're going to manage to find us some incredible energy solutions which we're also going to see many researchers around the world working on and i actually think that the solution to our energy problem is something quite different to any of the things we're necessarily talking about in this program today because what we really need is new thinking rather than necessarily going along all of the silos that we've been going along for many years lloyd if i can go to you in dallas i mean one of the countries that is we know that has an insatiable energy appetite and that's china what do you think working inclusions do you think the chinese are drawing now looking at what's happening in

china japan its energy energy dilemma is there and china's growing energy dilemmas it just simply needs more and more and more energy and oil isn't going to do it in they're going to go to atomic energy they have no choice. well they do have a choice and the chinese are investigating renewable energy technologies and energy conservation let's not let's not forget that if we use less energy and to accomplish the same things we need less energy to be generated that can solve an important part of the problem too as for renewable energy being impossible to scale up there are tens of thousands of homes in texas that are powered by wind power now including mine so it certainly isn't the distant technology or something that's difficult to do but it could be done much better also for an island country like japan there are thermal power from the oceans there is a possibility of using wave power there there are

a tidal power generators for instance there are some in canada that can be scaled up i'm not saying that we can get off nuclear power quickly i don't think we can there is a big investment involved there is a period of time involved as well but this business about nuclear fusion has been going on now we've been told for about the last thirty years that in ten to twenty years we'd have effective nuclear fusion reactors we still have yet to see them so maybe someday there will be a safer form of nuclear power but there isn't today and i would like to see us move away from that power toward the kinds of natural forces which drive all of the motion on the earth and the cars and natural processes there's plenty of solar energy plenty of wind energy plenty of title energy and lots of other forms of say for renewable energy michael one of the reasons why countries go to the nuclear option is because they have energy sovereignty and energy independence again i mean all of us on this program of heard in energy independence since we were children

but that's one of the reasons why countries like japan go yeah i remember jimmy carter saying it ok gerald ford excuse me but you know that's why countries like japan go to this guy because the ok all right does anybody want to topple and here i think you're right that richard nixon. and this is why countries go this route to make specially island country like japan. so limited resources for energy they've done this i mean we have to remember the obvious truth this is a country that was the first victim of it of atomic weapon for me no it's power ok my point is that they would have already gone down all these green routes wouldn't be if they had quit evidently thought it was beneficial on a massive scale. they have actually for years been sort of have government programs to subsidize the construction of solar and wind energy and the problem is it has not made a huge contribution the utilities of course are huge companies and plan and they prefer to focus on the large plants nuclear power was seen as a way as in france of gaining of fair amount of independence although you have to

remember you know back in the seventy's we had a shut off of uranium supplies from australia and canada after the nuclear nuclear test explosive test in india for example so the problem is nothing's really provides you with complete independence you always run the risk that for example you know you have seven reactors in one place and it turns out there's a tsunami there or somebody flies out there was a design flaw in some particular type of plant and everybody around the world has to shut plants down for maintenance something you see occasionally the airline industry although usually they're able to cope with it. it doesn't turn out to be a devastating long term problem but you know there's just unfortunate just no solution remains a very good source of energy ok patrick last word on this program thirty seconds what's the world learn from these tragedies. the world learned from these tragedies that we have to of course try to make our nuclear power as safe as possible but

there's really no option because the other technologies aren't sufficiently efficient the fact is that the japanese people are a great people they're going to rebuild their economy but in the meantime we're probably going to suffer a double dip recession not just as a result of this event but actually because of bad governance and bad government over the years and therefore unfortunately the economic outlook doesn't look too good but i believe that japan is going to be amongst the nations that are going to power us into the next wave of innovation which is going to lead us to new and exciting energy sources ok patrick thank you for ending this program on a positive note considering the tragedies that we have talked about many thanks to my guests. and thanks to our viewers for watching if you see you next time and remember cross talk rules.

a time arriving here broadcasting live from washington d.c. coming up today on the big picture.