captioning spoored by macneil/lehrer produions >> brown: go evening. i'm jeffrey brn. the cia announced day that 7 of its employees were kill by a suicide mber in afghanistan. six others were injud. >> suarez: and'm ray suarez. thdead included the chief of the rgeted cia post. the newshour tonight, the latest detailsbout one of the adliest attacks on cia personnel in the agency' histy. >> brown: also tonight, federal judghas dismissed all chars against 5 blackwater

security guards accuseof killinunarmed civilians in baghdad. >> suarez: the presint gets a preliminary report intthe attempt to bw up a u.s. airler. we'll talk tintelligence commity veterans about what went wrong. >> brown: then, a econd look' asaul solman asks economists one central questionbout the recessio >> why didant -- why didn't the fed tell us? >> why didn't warn you. >> yes >> suarez: gwen ifillooks back at a dmatic decade in u.s. politics. withmy walter, andy kohut and michaebeschloss. >> brown: and thpoetic partnehip between one of russia's leadingriters and the husband who trslates her. >> this gis a lot of advantages to the -- view. because he gets toranslate poems at we lived through tother.

>> bwn: that's all ahead on tonight's pbs newshour major fundinfor the pbs nehour is provided by: >> this is the enginthat connts abundant grain from the american heartland tharan's best selng whole wheat, while keeping 60 billion poundof carbon out of e atmosphere every year. bnsf, the engine that nnects us. >> chevr. this is the por of human

energy. intel. suppting math and science education for tomorrow's innovators. the national scice foundation. suorting education and research across all fieldsf science and engineering. and with the ongoing sport of these initutions and fountions. and... this program was made possib by the corporati for public broadcasting. and byontributions to your pbs station from viewers le you. thank you. >> brown: the dictor of the central intelligence agency confirmed that 7 cia emploes we killed and 6 others wounded in an attack on base in afghanistan yesterday. a suicide bomber penetted camp chapman detoning his vests filled with explosives

e names of those killed have not been released the cia. the asciated press reported that among the dead was e chief of the ancy's khost base she was describeas a mother of the. the attack wasne of the worst- er carried out against the cia. prior to this, fouknown cia operates had been killed in afghanistan since 20. in a message to ployees today, cia director leon netta said "thoseho fell yesterday were far from home and close the enemy, doinghe hard work that must be done to protect our country from terrism. we owe them our epest gratude the site of the suice attack is not far from the kistan border, onof the areas whe the taliban insuency is stronges yesterday was also theeadliest day for nadians in afghanistan in twond-a-half years. ur canadian soldiers and a journalistere killed in a adside bombing while on patr in sthern kandahar province. >> on behalf of l the soldiers, airmensailors and

special operators ofoint task force afghanistan, i oer our sincercondolences to the families and friends of our fallen. brown: the reporter, identified as michelle lg, was on her first assnment in afghanisn for the "calgary herald." the taliban has aimed responsibity for all of yeerday's violence and said th the attack against the cia was caied out by a taliban sympathizer from the afgha army. the afghan defenceinistry respondethat no afghan soldiers were inlved. for more on the attack in kht we turn to jy warrick who cors the intelligence community at the "washingt post." >> whas been learned about how the tack was carried out, howhe bomber got on to the base? >> officially deils are coming out very slowly about this incident. know that there were earlreports about someone wearina europe, perhaps a guard or sebody who was on thbasement but more information as wdevelop more information ilooks like it may have bn actually an inform apt who was invited toome to the

base as often happento provide information to c op ratives. this happens routinely, this base where people re brought in to be recruit as sources. and this may he been something ke that. >> among the dead, the senior officer at thpost, a oup of agents, severe injuri among another group of agents. this appears to be someo who knew wre to go, who to see, a how to move around this facilit >> yeah. there isery likely this se, this somebody who knew where they were going. this is esseially a trap at was set up by the taliban d their sponsors to try to geat what really is t point of the -- for the cioperations in the area. >> descre the size of the loss. the cia is relively small agency compared to an my or a mare battalion, to lose this ma agents at once musbe an enormous casualty. >> it's destating. we are talkingbout very all numbers of individuals, sotimes cia works in

groups otwo or three, this is a basthat had maybe a few dozen ople at most when it's lly based. but this is essentiay like wiping out a batlion for a milita unit. and it going it to take a ve long time to recover from this. this not just a lo of life but the wealth of owledge these individuals ssess. probably talking maybe hundd of year in expeence, at counterterrorism of the individuals lled in this one incident. >> camp chapman was locate near the border with afghanistan and pakistan, a very turbulentlace in recent months. y idea why camp chapman would be targeted. >> it was probably dream targetor the taliban, because thiss a base that alsoappens to help coordinate theones strikes, the predator strikeshat we all here aut. they don't actlly fly drones from this base. t these guys are involved in the tarting, the sueillance. they coordinate these strikes so this is really sort of 9 nervcenter of these operations in th area. that really wento the heart of whathe cia is tryingo do. >> you mentioned thathe

agency is unusually qut. but today the rector leon panetta did release me informatio what was he ab to say about ese people and what their mission was, if any? >> it seemed like a very personalessage because this is agency that has beenocked by problems, by -we've seen the last few weeks estions about whether or not they were ing a job and tried to prent terrorist attacks. they'vhad a very difficult few months. i think was a message to y to reach out to them and say we're good priots. we are putting our lives o the line and we are ing good work here. it seemed to sort of boost morale tkeep these guy s going. >> suare will we ever know who thespeople were and what ty were doing in southeast afghanistan? >> in someases we probably n't. beuse these people work often undercover their names arconfidential th work in areas where it is very remote. very little contact with family members andost of them are mdle-aged and older and do have famili

back he and they can't ten talk to them for mohs at a time. and so tse people do a great service r the cotry and some really will be uung heroes who will have a star on the waland perhapno more publicity than that. >> suarez: joby rrick of "the washiton post," thanks f joining us. >> suarez: in another war development today a deral judge in whington has dismissed charges agait five guards at the former blkwater security agency acsed of killing senteen iraqi civilianin baghdad in 2007. for more on that story, wee joined by mattpuzzo of the associated press. matt, let's gin with the original story. who were these blackwar guards working for? what were they doi in badad in 2007? >> well, blackwater was hid by the state department tbasically guardiplomats. they were security guards. they were boguards. and they were a convoy that wasctually responding to a car bombing in septembeof 2007 wn

depending onhich side of the story you lieve, they were either ambush by insurgents, or they unleashed an unprovoked attack by vilians. regardless of whicstory you believ 17 iraqis are dead and this isbviously really touchedff some anti-amecan sentiment abroad. >> suarez: at the time the was a lot of controversy rrounding the case, a kind of tsle between iraq and the united states over who would try them. who did the ited states assure the iraqito get these meback to the united states? >> well, their governmen wasn't going to allow -- the united states govement was to the going to allow the men to be tried in ira i thk there was a feeling at that would have set a really dangerous pcedent fomilitary personnel and u.s. contractors workingn war zones. so the case s brought to washgton. it was kind of an precedented case bringing u.s. contractors to washington for a tri for a

crime allegedly coited in a war zone. and baghd, people in iraq have reay wanted to know w is this going to play out. how is the u.s. dicial system going to hale this case? are we going to get stice? so judge ricardo you arebina led today. what did he say. he w the he sense the ruli and what reasons did he give for it? >> he threw out the tire case. he dmissed the indictment againsall five member. and the reason was he basically said that prosecutors ossed the line. and theyishandled eviden. whatappened is after the shooting, the state departmentame in and said to the conactors, we want to know what happened. tell uwhat happened. and as pt of -- as part of their contct they have to tell the state departmt. but that is a --n legal tes a coerced statement. th're required to give it and so as part of e deal, yogive us a statement about what hapns, we'll use it for our intnal investigatn and we won't use those stements in any crimin prosecution. t what happened was those

statements were us in the criminal case. they were usedo underpin search warrant, they were used to qution witnesses. the prosecutors ad them. some of the infoation made its way to the grand jy. and e judge just said it had so tainted the case that there wano choice but to throw it out. >>uarez: so is this it? does the government get another te at the apple, a way to take another n at this? or are these men now out o any legal danger. >> well,he government can appeal. and there is a legal argument to be madthat you know maybe the state dertment doesn't have the authority to give blanket imnity protection to these guards. but at this poin the hurdle there is a really hi hurdle for the justice department to clear, to make this case me back to life. this is a big wifor the security guards. and they had felt likehey were going to be able to prove their innocence at trial regardss of the evidceary issues. they felt like this was a legitimateire fight. theyere acting in se-defense.

but athis point, we'll never ow. it appears wll never know whether this was a self-defense. whether they were amshed or whether this waa massacre. >> is this case being followed closely, back in iraq, two yes later? >> wel you know, when the indictnt came down, people in iraq were talkingbout the death penay, as sort of, you knowto many people in iraq this isort of the hallma this is the siature moment for you knowthe u.s. -- u.s. contractors slghtering innocentivilians. so you kw, because of the time zone we don't he any reaction yet out obaghdad but you can be se this is being watcd very closely the. and it will be very inresting to see how this is tak both by the governme in baghdad and sort of, you kno the average iraqon the street. >> suaz: matt apuzzo o the associated pre, thanks for joining us. >> hey, thanks lot.

>> brown: w, for the other ws of the day. he's hari sreenivasan in our newsroom. hari. >> senivasan: five americans will face terror charg in pakistan, according to a announcement fropakistani policeoday. the court te for the five n waset for january 4. police plan to crge them with teorism and seek life sentens. the young muslim men we all arrest at this house in central pakistan earlier thi month. police found jihadisliterature and ma of pakistani cities and sensitive military sites. >> they were gng to plan something big. otherwe they would not need five americans to fit alongside them in war fronof afghantan, especially when they do not have any mility training. >>reenivasan: the men, aged 19 to 25, are from thwashington, dc area. their famili contacted the fbi before their arrests, afr fiing a farewell video made on behalf of the five. the men reportedly met he in northern virnia when they were members of a youth group sponsored by their mosque.

>>ur group discussions never talked about politic never talkedbout ongoing conflicts, never talked about figing against anyo indirectly or directly. on the contry we always promoted compaionate toward otrs and being good stewds of humanity. >> sreenivasan: officials both the u. and pakistan have said they expect the men wld eventually be ported back to the u.s. but arging them in pakistan would likely delay thaprocess. as the year comes to a cse, u.s. military deaths sred in afghanista where the war is escalating. but fewer trps died in iraq, ere the operation is winding down. afghanistan, 318 american troops were killed in 2009 that's more than double th number who died in 2008. in iraq, 150 amerins lost their lives this year. that toll is nearly half wt it was in 2008,hen 314 u.s. troops died. 2009 ended with some posive economic news. the labor departnt reported new claims for unemploymt fell

unexpected to their lowest levels since july 2008. but for alof 2009, nearly 14 million people claimed unemployment. stocks on wall street cled out the final y of the year's trading on a down note. the dow joneindustrial average lost 120 points close at 10,428. the nasdaq fell 22 points tolose at 2269. t for the year, wall street made a major comack, rebounding from 08's dismal drop. the naaq climbed almost 44 percent, while the dow gaid nearly 19%. ruth lly the last surviving great-grandchild of pharmaceutical magte eli lilly died last nighin indianapolis. over theourse of her life, lilly gave awathe bulk of her inheritance some $80million dollars. st of it went to charitable organizations and ts groups based in indna. she so gave a $100 million dollar donion to the literary magazine "poetry",hich had rejected her submissions f years. lilly was 94 yea old. pas of the world have already

ushered the new year. in sydney, australia more an a million peop turned up to watch fireworks overhe city's landmarkarbor bridge. reworks also lit up the skie over red sare in moscow. back in the s., crowds began thering in new york's times square under a lig snow for the ball dp at midnight. security is steppeup there, witholice and other officials planning a sweep of e area for biological contaminants. those are some of the y's main stories. i'll be back at the d of the program with areview of what yoll find tonight on the newshour'sebsite. but for now back to jeff. >> bwn: and still to come on the newshouronight. conversaons with economists about their failure to warof the recession. a review of the past dece in polics. and thpoetry of vera pavlova. but first president obam receiv a preliminary report today about last wees attempt to blow a u.s. airliner. in a written stament issued in hawaii, where he's on cation, the presidt said he plans to hold whi house meetings next tuesday to discuss improve intelligen-sharing between government ancies. and he repeated thathuman and system failures" had occurred in the run-up to the aempted

attack. last night wtalked to former mbers of the 9/11 commission about all this tonit i'm joined by veterans ofhe intelligence community. charles allen servedn the cia and asndersecretary for intelligence at the departme of homeland serity. tyler drumheller was directoof cia operationsor europe, among other posts. and paul pillar served in variety of intelligencanalysis anmanagement positions. mr. allen, i will start with you. after 9/11 thereas a lot of reorganization inhe intelligence community has it worked? what do we now kno >> ihink it's worked very well overall. obviously ere's still more work to beone based on this event that curred on christs day. but the intelligence reform and terrorism prevention a saide should establish a national counterterrorism center and all intelligee agencies shod ensure that the formation flows freely and fully.

and that informaon is shared even the sensitive with t national counrterrorism center. and we do th on a regular basis. it is t perfect. lot of cables flow in every day from all over e world. they flow fromany sources, military, intelligence, la enrcement, and all that data has to be lked at. assessednd determined, does this really posa direct threat the interests of t united statesat home or abroad. this ia very large probm. weeed to streamline this further. i worked in the prious administration to worknder the homela security council. another agencies, the intelligence comnity, to refine, reamline the inlligence watch list to make sure that information did not flow. sometimes informatn from nonintelligence agencies es not flow as quickly and asasily into the intelligence chaels. >> mr. drumheller,hat is the last incident tell you about how things a working.

>> i think what charlisaid is true. there were changes tha needed to be me. they needed to draw l the informatiotogether. my concern is that if things haen in washington, the tting up of this national counrterrorism center and the director of natial intelligence staff hasrown bureaucraticly. and that itself hacreated oblems in procession the information. >> reporter: a knew bureaucry. >> a new bureaucracyn between e old community and the collectors. and i think one of the key pieces for me,nd i was an operations oicer, is the intelay between the analytical people and e operations peoplcollecting the inrmation in the fid. anthat's something that hato be tied up. the idea is good. the idea is perfect. charlie hit it right on the ad but i think there is still a lot of work to b done. d one thing, this is an area where beaucratically it's better to be smaller and smarter rather tn -- >> m pillar, the idea of course was to help the informatn flow, to allow evybody to talk to each

other. >> i think the very fact at many of the things we hearfive years ago before this reorgization was accomplished witmuch fanfare, we' hearing today about connecting dots, about information fl and so on, suggts that things have not worked as ll as they should have. >> reporter: where do you thk the problems are? >> i thi tyler has touched on part of this. we did have o new bureaucracies establishein the reorganization five years ago. the office 6 directoof natial intelligence and the national counterterrori center. and thisas despite the fact that wh we were hearing for th9/11 commission and others was about thproblems of information owing across bureaucric lines, about at did we do? we created t new sets is of bureaucratic line >> think one of the problems is justhe sheer flow of informion, all information flows ina lot oft may be fabrications, rumors. people are trying to absor vast amounts. one the things i think ally there needs to be

improvement the nctd c, national counterteorism centers that interchange between erations officers, collecto and analysts whether it is techcal intelligence clection or humasource collection. i think weiss some of that because of the distae beeen operators and coectors and analysts. on when you have the analysts interactingith the collectors, i ink you gethe synergy that is requed. analytic trade craft is lacking in the commuty. i thk we need a lot more intense training. and we don't have it. and i thk what paul said pointing out to somef the issuesnvolved gets back to fundamentalicay this closeness between coectors and alysts. >> reporr: mr. drumheller, you served as a statio chief. inhis case, take this case, in nigeria, wh is -- what wasupposed to happen when the father walked in to express concerns. >> well, it vari from bassy to embassy because you have to work outhe arrangement with the embassy. normally, the walkn of this type wod be handled

either by the cia personl or by the bassy security officer. then y would write up a port from what he said, especiallyiven who he was, the prominent guy neverian, we cone -- well-known totem wasee. and this is what they di-- >> they d that. >> it went in th informatioand i think charlie and paul, back mup on this,hese cable goes automatically to the tional counterterrorism center anyway. i think there is an idea that this has to gthrough cos cia and beeleased. in information goeout automatically to the recipients and -- t then you ha to have, to make it really work effectively u have to be able toave an analyst, an expeenced analyst call up, be able to call up and nd a message directly to the station an say who is this guy,hat was it like, how did i work. and have 9 station chief b able to follow up d go back anday what happened to that report i st. at is a very important part >> because there are alws ing to be various pieces of evidence, as the was in this case, rht, and somebody hasot to pull it tother. >> and we should rlize what we always do after

these incidents, wheer it is a real attack or a ose call like this one, we are indulging in retrospective hindsight. and we're dealing with piecesf information that in retrospect n hisight, look perfectly car. oh this should havbeen seized upon. we have to remember th thiss amid a flood of information, that all the agencies he to deal with, every day, deptment of homeland security, nctd c, the center wtalked about, cia and othe. and realtime, dealing with these reams of formation, these things aren't necesrily going to stand out as they do so obviously wh we conduct this exerce in hindsight. >> your sense, mr. all is at changes that have occurr are in the right direction and so is it- -- i don't want to put words your mouth s itweaking th process now? what needs to be donnext? >> i think whave to be, as i said earlier, re streamlined, mor transparent,nd ways that ge the analyst much closer to the peoe doing the collecting

and think we're a degree of separation with the formation of counterterrorism cente even thougthere are a lot of cia officers anfbi officers wking in the nctd c ast is. t there still has to be greater syney and greater streamning of the movement of data and the back a forth. because when ias at homeland security, i found we were reting to almost erything that came in, rather than looking athe real whe among all that vast chaff that fld of inrmation that paul talked about. >> are you wried enough out what you call this new bureaucry that you think should be clred out a little bit. >> yeah, i think what charlie is talking about, think trsparency is that u need to remove these lars of washington -- washgton work in between and get back dow--. >> reporter:s that possible? >> i hope so. because e real issue here is, and one ofhe things hopefully avoidoing is looking at this,ooking for a system, a coie cutter

system that wi fix all of this because it really comes do to the situation of the analys and the intelligence officer and getting themhe oppounity to make the judgement, not just in committee and not justased on weighted factors but as dividuals who have an expertise in it, not loo fosystemic solution. >>f course people do look look for sysmic solutions. >>f course. and we have is appetite for someort of fix to a bureaucratic or other ki of problem and we like to have this comfting sense that if we fix the probl, then we're not going thave recurrence. that sply is not the case. >> we just have a minute here. t i do want to ask you about the events i afghanisn. you heard by warrick talk about stuff. of course e terrible human ss. >> it is terrible. >> what does it door the loss of knowledg the loss of abilityn a place like afanistan? >> i think we e talking about some very experience officers who were kill yesterday. and it is a great and tragic loss.

i'm ry mindful of 17 april 83 when we lost our entire statiovirtually in beirut to the hezllah bombing. i nt through that painful process because some of th people killed i knew very well. so we're goi to go through this again. i think dcia director patta said it right. we're very strong organization. filled with lot of brave people who putheir lives on the line every y. and they do it repeadly, every day. and that's the kind of agency that know, it is my beloveagency and will get through these diffult hours. >> reporter: we wi have to leave it therecharles allen,aul pillar and tyler drumhell, thank you all ree very much. >> thank you. >> suarez: now, we taka second look aa report from our economics correspondent paul solman. in january paul wento san francisco to ask some of the nation's leading ecomists why they fled to predict the economic meltdown. it's part of his ongoing

reportinon making sense of financial news. financial -- wned for a decade oirrational exuberance, and entual bust to the housg and stock markets. >> s prices were going up, up, . and it seemed like it woul never end, rht? >> it must have seemedhat way. i don't know h people can belie that. th just can't go up, up, up, and end up in the rat here. >> this was a ground touof san francisco with bob schiller and nobel laureate bob ackeroff king a brk from some 10,000 colleagues in wn for the yearly economics conveion to wch we had come to ask one questi. why didn't y, the economics profeson, warn us? why didn't the fed tell ? >>hy didn't we warn you. >> yes. >> we collective or me personally

>> well,ither one. >> repter: many said they had sounded the alarm bu that in good times no one listed. especiallyf there is a good story on thother side. >>he idea is because of the populaon growth which would go on forever, t econy is growing because china and india are showin the way. capitali is exploding, thateems like well maybe that is a reasonhat prices e just going to go up, up and up. >> and they forg about the fact thathey might go do and do and down. the convention self was packed with top flig onomists, hoing the newly mintedh.ds. but many didn't wa us. so w? alan blinder w vice chairman- vice chairman of the fed inhe 1990s. >> ihink the fair answer is nody thought this might happen. things can go ong. but the mber of things at have gone wrong and the ferocity with which they have gonwrong, i think, was beyond the imanation of almost everne.

reporter: or as standfd's caroline put it. >> it is easy toay this individual housing and mortgage business is rky but it was very difficul for even a very go economist to say i undetand how all of these different investments wh ey all start collapsing together, even just a ttle bit, are going to aggrege up and roll on to e another its like undetanding how all the domis are going to hit one another. it ia much tougher prlem. >> rorter: and how you can ever knothat ised finance professor. >> disasters can hapn at any time. in fact, what makes them disasteris we're not expeing. if we were eecting them, theyouldn't turn into disasters. >>eporter: but in fact there was plenty of datao suggest the worst. d plenty of economists who w it coming, from dean ker and jamie galbraith on the left to martineldstein and ken rogah on the right sohy were so many others blindsided? becae we were all so lied

to says m.i.t. frank levy. >> i think part. ason that many people didn't know is that the people who werissuing all the derivatives had big incentiv to deep what they were doing secret. sa thing with the banks. if the banksut on their bookall the risky loans they were caying, all the risky loans theyere making, the federal reserve uld step in and say well you have to increase your capital requiremenand that uld mean the bank kos make fewer loans. theyidn't want that. ey wanted to make all the loans theyould to generate all thfees they could. so everybo in this game had big incentives to ke hidden an awful lot ofhe activity they were doi. >> reporr: but the conventions st liberal onomist had another planation for the lack of warning. the eology of the era. rbel laureate joe stiglitz. >> people wanted to lieve thatarkets were lf-regulating. anif that was the case, you couldn't have a bble. because there was a bule, you needed to have somebody do something about

it. anso this ideology which drove the noon that gornment always got in the way, that regulation was bad s a central piece in the ability of both the ofession and politics to look the other w. >> reporr: and those who log ago beged differ were mainalized said dukes william garrity. >> there is not much of a teency to hire economists who ink outside the box. and so as a consequenc there was an ideaological blinder that was opeople's eyes. >> itead those inside the box prevled, thinking markets regulate tmselves. nobel laurte ken arrow is a living legd at this gatherg. >>he question we're asking everyone is why didn't you warn us. >> exactly. well, i feel aittle responsible in a way thai should have. we just assumed if wknew it, did the people, the

smt people that had no reason to distrust the intelligce in the instment banks so we took it for granted, these pele protect emselves. we were wrong, obviously. >> but time go back to our tour, d on next stop, north beach, among oth things, san ancisco's ppy paradise. >> people are driven by their animal spiri >> siller and ackeroff have written a new book about animal smirts, the words of england's john maynard keynes which wlove using our pieces for the visuals. to the economists, animal spirits are the key to both the crash and our failure to anticipa it. they're the emotionshat actually animate an econy like trust and confince. >> dn, please. >> reporte and they tend to ebb and flow r better and worse. >>he basic problem, i

would say, is that wbecame overconfident and then we scovered that it was built on fauy premises and now our confidence is craing. >> i think the major thi was that peoplare simply too trting. they trusted that they cod buy mogages and things like that, wch simply were not ing to pay off. and they shoulhave been much more carefu . >>ut of course this is easier said thanone when riding a wave of prosperity. in fact, the act of mang money can induce aactual physal high says economist andrew low. >> it turns out that scientts have shown that financial gain triers the exacsame reward circuitry in the brain tt cocaine does. so when aryou making money, are yoactually engaged in a kind of activity tt gerates a drug-induced stupor iof the same way that having few drinks or being on cocaine would actually make you relax and

be a lot ls concerned out risk. now ifou take it to the extreme, if yotake hall use genics whereot only do you not worry about e risks, but you don'tven see the risk, at can get to a situation where you walk off a 30 storey building and because y thk you can y. >> reporter: okay, so our anim brains, even the biggest on, perhaps, are subject to inebriion, so shouldn't govement play the role osober sides. unfortunately, said repuican martin feldstein who warned of the sere crisis two yrs ago -- >> the is always a ndency in washington to be optimistic, to thinkhat things areoing to improve. reporter: in the end, then, every peon in the game had an inrest in keepg it going. a central lesson is that this is a ki of -- where thexplanation of the tragedis human failings deep within what it mes to be human. and wh it means to be human is sometimes to go to excess.

toasically not pay enough attention to risk. humans make thoskinds of mistakes consiently. and it's leato some of the great ises in history it also leato some of the grt accomplishments in history. but it is all about us a people. the tragedy of underestated risks takes us to the last stop on t cae car line. and for this piece. market street. scene of another panic a century ago. >> thearthquake of 1906 was precededy many lifornia earthquakes. and there we architects and urban signers who were sayingou needed to prepare betteror the next one. threason it was so bad is cause they didn't prepare. the problem was nody wanted to thinand come up with the cost d the expenditure preventive measures whi would have limited the dage of that earthqke. >> and now for years we' been hearing aut the imminencof, in california, the big one, y you live here, why? >> it is a greatlace to live.

of course live here, i don'think about it. >> so u, in your every day life. >> yes. >> are in a version of the willful denial that we've all been in in this couny with regard to the econo for years? >> that's exactly righ >>eporter: george ackerlofthat is, has left his hearin san francisco. and the heart has its asons. and the mind its receptors for which reason seems to be no match >> brown: ase said, paul shot that story at the american economic association annual meeting st january. the group will gather agaithis weekend in aanta and paul will be there. >> suarez: now, a yearnd discussion on litics. gwen ifi recorded this yesterday. after ten years of -wars a tas and economic booms and busts, we ta a look back tonight the decade in politics and governce, througthe eyes of three newshour regulars who ve helped ucover it all. amy walt, editor in chief

ofhe hotline national journalsolitical daily, andrew kohut for the peoe and the press d presidential historian michael burbve. arting with you, michael. whatould you say is the signal event of this decad >> it would ve to be the attack oseptember 11th -- 001 because not only h thataused all sorts of obvious changes inmerican society but look at ththe kind of even that led to. george w. bush declared a war on terrism, lead us to a war in afghanistan, aq, used very harsh measures against rrorism. in 2004 i ink andy would agree with thi george bush s re-elected largely by ople who may have been concerned abt his other polici, but were worried abt terrorism. 2080 tery unlikely that barack oma would have been nominated by the demrats if he we not so against the r in iraq, able to benefit fr an anti-war sentent. so if 2 2001, if those attacks d not happened, oudecade would have been

veryifferent. >> andy, why not the econo, this is pocketok, close to people's heart and we had incredible crash at the en of the decade. >> yes, the onomy t wasn't only 9/11, 9/11 was the defining moment. but this w a decade that stard out bad, and then went to ally worse in the 19 -- in 1999 64% said t country s -- the national economy was inood shape. by 2001 into was dowto 36%. in 2009 it's down to 11%. we had a decade where e american public did not ge income gains, real income gainfor much of the decade d then it ends with this ashingly bad great recession, sthe economy is right behind 9/11 and it coloured my of the things that we think about and sty here, politics, social and economic behavior. >> ifill: amy, wheyou think out these two big

signal isss, the 9/11 attacks, the economy, di they serve to insurance late our prident or to expose th or to public outcry? well, and i think michael said it quitwell which is you start the decade off with theresident where terrorism is, sort of hi calling card iis an issue in which republicansse to make gains, nojust in 29002 midterm elections bu in 2004, cerinly successful. and then we turn it around almost 180° in 20 and 2008 frusation about iraq. frustration about the economy. i think what is also interesting is fundantally this comes dowto if we are talking about this decade, toe is just a breakdown in w people felt about institutions. stitutions basically failed americans. and it start off with thin, september 11th was different but think it arted off this decade with thgs like the enron, and you ended itof course, th bernie madoff and the collse of wall street.

d so i think fundamentally what we arseeing politilly too is sort of the rise of the invidual, that institutions now e no longer as trusted, includi politicians. >> i was going to say,he begiing of the decade coincided with the most condition teed election of oulifetime. >> thas right. and so you started offhere, you kn, but what i thought was really interesng too was when you look atarty identification in 2 thousand d now compare it to where we are now, looking athe pew, poll, of course, the number of people who identify themselves as independen has jumped six points. it's not that the number o people who identify themlves as democrats has gone ueither. thisumber looks almost exactly the sames in 1992, where we had somof those same elements coming io play. frusation with the statusco, ere was scandal in washington there s obviously economic upheava and so think what we are seeing botin campaigns, and the way liticians talk

about things, it fls very perotian. we wilmove away from initutions. >> as in ross pero who don't remember tho wonderful days michael. >> yeah, n i think amy is actly right. and the other ing is that you know, what happens to public fling about government, goes down when there are big mistakes. after vietnam people said r government made a big stake in southeast asia. watergate, theame thing. in 2001 there was a eling after thathat our government failed it to ep us saf obviously on that day in septeer. but en more than that, 2008 september, r government did not keep us americans safe enomically. congress was asleep at the switch. regutory agencies, certainly the executiv branch. anthat was such a huge malfunction that i think there will be consequences from that for a lo time. >> iwas absolutely a meltwn. >> one of the positive consequencesf this bad stuff is this waa record decade for political

engagement. in 200054% of the eligible elective turned ot. by '04nd 80ee was above 60%. big, big numbe and we also saw that in '06. one of the downsides of e political engement is the polarization tt we've seen in this decade. largerifferences between 9 way mocrats and republics think about st thgs than in the 1990. >> if you say athe same time that most people don't -- party idtification has gone down, does the polarization maer as much as it would ve if everybody entifies republic or democrat. ist possible that everody in the middle in this decade, theare the ones who a steering where the boat goe >> they are lling the lever. oa was elect because of the independen. presidenbush won his narrow secd term victory becae those independents re more confidence -- confident of his abilityo deal with the terrorism an the foign threats than john kerrey. soes, the number of indendents is very salient but keepn mind, the one

thing that we have sn is a reallyery politicized decade compared tohe 1990s. >> and what is fascinang too is you then t technology on top it. it is not just thamore ople are getting engaged. but eir voices are being heard e way they haven't before. nobody evethought you could make yr own individual, --ideo, post-it on the computer and have an influence on people you have ner met and facebook, all of those things. i think whether the numb of people rema engaged, in tes of the total, is i thinas important fundentally as just the way that individual ople feel like th can make a difference in e way they engage. but there is an opportuny to say something positive. keep going. >> we need something positive. >> this is t decade of the information revoluti. at the beginng of the decade 4% of people were connected to cputers on a fastasis t is 65%, 7 to th58, the internet is all encompassing. most people use the internet. it has lead search, it's

lead to social networks, that shape people's -- the way ople lead their lives in waythat were unimaginable. >> you can argue barac obama took advange of at. >> absolutely. >> whatever ppened to small governnt. this that usedo be the mantra, the thing at could get you elected, to n against washinon, run agait government, and now we are in an unprecedent era. >> 2009, huge budg deficit, lead by barack oba to make sure that a second great depression with not ppen, ast did not. by may see the e of small vernment is back again next year. because there is every indication thawe are -- republicans argoing to say next year is, you know, don't talk about secd great deession, talk about the fact that this is th mo big government president ateast in recent time ultimately will lead to a rise inax, not good foamerica, they'll use that ithe midterm caaign. >> feels little bit like beinon a treadmill though. >> this cle that we are . >> there is the boomnd the

bust and y know, i think that it true are you gog soee members of congress trying find ways to disnce themselves from washington. i think that has bn sothing of the trend for a while now because of scandals and because of the association th washington has never be particularly potive. but what you are seeing w in the wayhat candidates are positions themsees now, is a right, sure, yes, there was the nk bailout and then theuto bailout and her things we had to do, but ndamentally we're going toet -- this is the only way tget the country back on track. d they're going to try to ta more specifically about what they are doing, personally. and what congress the governments doing. >> andy, what about how the way the world sees us. we nowee ourselves differeny from various reasons. but the world sees united states differently from the end of the decade an at the beginning. >> sure. this is the america agait the world cade. anti-amerin spirled almost out control for much of the decade in response to shall did . >> right after 9/1 >> we had a littleit of symphy for about a year but then with the set of

iraq and dcontent with president bush'spproach to foreign policy, saw america's nuers really go south and there s -- not only concern aboutresident bu, it extended into the broader estion of worry about america'unchecked and unvaled power. w with president obama, some of those mbers have gone back down. but therstill is a coinuing concern about the exercise of amican power. and you could see the way began to play out as esident obama announced more tops for afghanistan and the backlash thabegan to create. that's going to beith us as a consequence of this decade pele around the world worry about the way th united states conducts itlf in dealing with its problems, dealg with terrorism. >> final thohts. >> i think the flip sidef thats, you know, what americs think our future in the world. ere self ree indication that manmore americans

than in 2000 now think tt ultimately witn three cades or so, china will be the most powerful nati on earth, not the unite states. if that ppens, that is going to he all sorts of consequences, ere is huge and never this country, people who are acctomed to being onop. and if that the way they feel, i thk they will look back on this decade ansay thaturing these past ten years, maybe more decisions were made that h to do with chi rising to that dominant position than almost any other. >> and we willather at the end of the next deca hopefully at this table and talk about it again. >> would be ni to think. >> thank you all very ch. thankswen. >> brown: nally, another in our poetry series. tonight, vera pavlova a russn whose rst collection of poems in english, f there is somethg to desire," will be published next month. it's translated by her hband, steven seyur who also serves as the interpreter for our profile.

>> ( anslated ): my name is vera pavlova. i was born in moscow i spent all my life therand my impressionas i would never leave that place. moscow i went to school, i went tacademy of music there. until age of twenty i ote music and was going to bome a compos. then starting athe age of twentyi started writing poet. urteen collections of mine have been published date in moscow i met eve in moscow too steve d i represent a rare case of operation the histy of poetry knows a number of examples of ets being man d wife. though those were not ve happy marriages

unless am mistaken there has been ncase of the wife being the poet andhe husband being the translat this gives aot of advantages to the tnslator because gets to translate poems we have lived through together >> if only i knew from what tongue your i loveou has been tranated, if i could find the original, coult the dictionary to be sure the rention is exact: t translator is not at fault. >> ( translated ): i started wrg poetry when i was in the maternity rd. when i gavbirth to my first

daughter it tued out i was also born for thfirst time and in this new life i turned t to be a poet. >> a beast iwinter, a plant in spring, an insect in summer, bird in autu. the st of the time i am a woman. >> ( translated ): this book is the first child steve and mine, it conins 100 poems the only thing iope for regardless othe outward world is for differe people and differennations, i hope their internal wor is similar. if i hopefly manage to somehow describe my inr world in this book i count on it wilhave

resonance with amecan readers or at the very lea american readers find ts as a guide bo for my inner world, strange as it may appear. against the current of bloo passion struggles topawn; against the cuent of speech the word breaks e oar; against the cuent of thought the sailof dreams glide; dog-paddling like a child, i swim against the crent of tears. >> suarez: again, the jor developments of e day. the director of the central intelligence agency nfirmed that 7 cia employees werkilled and 6 othe wounded in an atck on a base in southeast afghanistan yestday.

a federal judge diissed all charges against 5 blacater security guards cused of killing nocent civilians in baghdad in 2007. and presidt obama was briefed by his national serity team on the failed christmas day aline bombing over detroit. next tuesday he plans toeet in washingtonith agency leaders for follow-up discsions. the newshour is ways online. hari sreenivasann our newsroom priews what's there. hari. >> sreenivan: on the website tonight, wre marking the end of the year and the end of t decade. gwen ifill, margar warner and paul solman reflect onheir most memorab reporting moments of 2009. and you can read what group of experts had to s about the most iortant science breakthroughs of t year. plus, we ask tee culture critics to alyze the trends, anges and highlights in film and literature of he past cade. that's on arbeat, where you n also find more poems from vera pavlo. all that a more is on our web site, newshour dot pbs dotrg.

jeff. >>rown: and that's the newshour for tonight. i'm jeffrebrown. >> suarez: and i'm rayuarez. we'll see u on-line and again here tomorrow ening with mark shields and david brooks, ong others. thank you angood night. jor funding for the pbs wshour is provided by: >>hat the world nes now is energy. the engy to get the economy humming again. the energy to tacklehallenges like climate change. what is thatnergy came from an energyompany? everyday, chron invests $62 million in pple, in ideas-- seeking, teachin building. fueling growth aund the world toove us all ahead. this is the power of human energy. chevron.

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