tavis: good evening. smiley. a conversation with domus scheiber. he details how he believes the obama administration has barred the economic record as it -- crisis and recovery. despite some signs of improving economy, unemployment remains high and the gap between rich and poor continues to grow. noam scheiber on the mistakes the white house has made and what it means for the president's chances of reelection. we are glad to have joined us. a conversation with noam scheiber or of the new republic, coming up next. >> every community has a martin luther king boulevard. it's the cornerstone we all know. it's not just a street or boulevard, but a place where walmart stands together with your community to make every day better.

>> and by contributions to your pbs station from viewers like you. thank you. tavis: noam scheiber, an author whose new book is causing quite a stir in washington and beyond. it is called "the escape artist, obama's team fumbled the recovery." good to have you on the program. >> thank you for having me. tavis: >> is this a blueprint for romney's campaign strategy this fall? >> i don't think so. i am more further left than team

romney would be. they will try to argue this thing was not executed as well as it could be, and on one level, i agree. there is one reason a lot of people still have a lot of anxiety about the economic circumstances. it is not to say that team obama could not have made it whole after the word skrine in -- financial crisis, but the criticism is probably from the left rather than the right. tavis: will get to the issue of where they home from the left. mika it me at of the blue with the question i would never have thought about. she said let me step outside your comfort zone and ask you, if your romney what would your strategy be? how would you run against the white house on the economic

issues? i fumbled around for about 10 seconds and decided on the reagan question, are you better off now than you were 10 years ago? if romney take that tack to ask the american people, whatever you think of me, are you better off now than you were four years ago, how does the obama administration respond to that? >> it is very tough. the argument they have been making is remember how bad it was. three and a half or four years ago. we now know the economy was shrinking at an 9% annual rate. auto manufacturers were on the brink of a big collapse, not just the auto industry but the whole supply chain in the midwest. banks were on the verge of collapse. after really remind people about that terror that a lot of us

experienced in late 2008 and early 2009. americans have short memories, and once things start seeming ok, a kind of look around and say, why is it goingtavis: i dot the question was, and it could have been worse strategy, is it ever successful politically? >> americans tend to want to know, what have you done for me lately? you have to go back a couple of years. this really was bad. this was the worst one we have had in 80 years. the depression lender for a generation, maybe more. i think the psychological effects of this may linger for several years. i think that that have a shot at making that argument. tavis: this is a bit unorthodox,

but while we are talking about the campaign, let me go to the end of the book. has the president and his team large enough lessons in this first term to be deserving of a second term? obviously the american people will make that judgment, not you or i. but have a large enough to deserve a second term, wherein they would do better the second time around and the first time? >> i think they have learned a couple of lessons. the first is, i think one of the big problems over the first 3 1/2 years was that just under shot on stimulus, they undershortt just on job growth. jobs being the central question. that was the first problem. the second was the quest for bipartisanship, the desire to negotiate quietly and earnestly and often the room with their

republican counterparts and figure things out. time and again, they learned that was not a viable strategy. in the book got argue that it took them way too long to figure that out. by the late summer of 2011, after the whole debt ceiling fiasco, the whole fruitless quest for a long-term deficit deal, obama did seem to understand that he had been banging his head against the wall for a long time. it combines both of these criticisms. the economy is still hurting. i want you to come up with another stimulus package, but this time i don't want you to design it as a prepackaged, legislative compromise. do not decided with an eye on how many remote -- hammy boats we will get on the republican side -- how many votes we will get. don't self edit. just do what you think is right and i will go out and sell it to the american people.

they did not get that $450 billion jobs act passed. what he did was, he got the payroll tax cut extended pretty easily. you have another $100 billion or so in 22 of -- in 2012 that he might not have gotten had he gone out on the road and put some pressure on republicans. tavis: so now we are into the two big mistakes they made in the first term, the first is the stimulus was not big enough, and the second mistake is being pulled in too easily and too quickly on deficit reduction. we will take them one at a time, and i will let you take as much time as you want to explain how they fumbled the ball so badly on the stimulus not be big enough, when there were so many people on the inside and the outside -- kristina werner on the inside it

is christina romer on the inside saying it has got to be bigger. and on the outside, some the other saying is not big enough, it does not fit the size or scale of the problem. how did they drop the ball so badly? >> the title alludes to it a bit, you had a group of people, most of them men, who had done this kind of thing in the clinton administration. so that a lot of experience in government. larry summers being treasury secretary. they had a certain amount of confidence in their ability to manage these crises. in some ways that was very helpful because they are so much going on. we talked about the auto industry, the banks, the economy. a huge task during a transition time. in some ways it was helpful that these guys were so experience. i don't think they could have solved the crisis level issues they were facing without that

kind of experience. but on another level, it made them confident that they just knew what they were doing a bit more than they did. i think the stimulus is a perfect example of that. larry summers thought that you need a very large stimulus. he did not disagree with christina romer so much on the size you would need ideally. his view was that the public was more tactical. we could never get congress to pass what we think we really need. and beyond that, if it comes to the political advisor and sadeq we need $1.80 trillion, which is what christina romer thought it would take ideally to get unemployment back in place in a couple of years, they would laugh us out of the room. $1.20 trillion, which is much less than she thought was ideal.

it is not planetary. it is ludicrous, as they kept telling her. a lot of them thinking they know how to size up the political dynamics. they know how to size up the situation on capitol hill. they know what will pass muster in a meeting with the obama political aides. this talk about $1.20 trillion is just a nonstarter. you are going to get laughed out of the room. the kind of self-centered. larry summers got a memo from christina romer saying what was going to be necessary. he said back saying we need something smaller so we can actually have a conversation and they will not laugh us out of the room. a lot of times when they went wrong in the first couple of years, these guys internalizing these political judgments that should have been left to the political advisers and the president themselves.

but they were lending political and economic advice. tavis: in no particular order, number one, this president seems to be too easily impressed with the brady is. i am not the only person who made the argument t --he brainiest with this second issue is, the same person she brought in the second time around were the people who did this deregulation mess during the clinton era. cuts both ways. he had this great experience from the clinton era, but you had the wrong experience. they are the ones that got us into this mess. now the same folks are coming in to put kent -- put out the fire. rahm emanuel is a political hack. his attitude is, we have to win by any means necessary. we have to get something

through. we just have to win. we have to get this thing passed. all that goes against your earlier arguments. things really are that bad, if the situation is that dyer, then go for what you need. go for broke and let them talk you down, but you don't negotiate against yourself. i am just a guy on public television, but i don't get how you put all of those things together and have any sympathy for what happened. >> i agree, your point about brain iness is right on target. larry summers was seen as such a heavy weight, possibly the most brilliant economist of his generation. obama really was taken with that. he absolutely was. the problem with obama and rahm emanuel and the other political advisers, they did not understand that when larry

summers said something, they just assumed it was the best economic judgment that a president could have. in fact, he was distorting that economic judgment with the political judgment he was adding on. whatever you think about larry summers as an economist, i think we all agree he was not the best political operative. i agree with you, obama was in a way blinded by the braininess, not willing -- not realizing there something else going on. on the deregulation, no question about it. there is no way around it. a lot of prominent democrats conveyed this point to obama during the transition when names like larry summers and tim geithner would be raised. i describe one in the book where a prominent democratic senator from the glenn harris says -- from the clinton era says these are the guys who helped create

the problem. obama was receptive and understood the criticism. he said i have talked to larry and him and they have changed. he really did not want to hear it. tavis: i am not trying to demonize the president, but that almost speaks to a certain level of naive a te. you really believe that in washington, people change their stripes? if your taken with his brilliance, i get that, but if you are running on a platform of hope and change, and we are not the only bright folk in the room, one not bring on some other people and changing the way -- why not bring on some other people and change the way things work? >> one of the things we have to understand about obama is, even though he ran as an insurgent, again the establishment, he is

very much and the establishment by himself. when he burst are running for senate in 2003 -- 21st party running for u.s. senate in illinois, he called up the harvard economics department and said, who can you send to advise me on economics? they said you might want to call somebody in illinois. that is how he ended up with austan goolsbee from the university of chicago. then when he started to run for president 2007, they were floating names like alan blinder who had been vice chairman of the fed, very much an establishment guy and a longtime democratic hands in washington. they said look, you are not going to get alan blinder. all the establishment talent is

with hillary. part of the insurgency aspect, part of his decision to run against the establishment was not because he was naturally and anti-establishment guy. it was because the establishment would not be him, it was with hillary. so it was by necessity. what we saw during the transition and during his presidency was a reversion to his establishment this position. by this point, those people were available to him. it is not like he rejected them out of hand, they just were not available to him. tavis: i understand how washington works, but this conversation is missing one key component in terms of facts on the table. that is that when the president is trying to push through the stimulus package, summers and others that it is too big, you would get laughed out of the room. they would get laughed out of the room by democrats. they controlled the house and the senate. people act as if he was already

a republican. he had the house, he had the senate. it cannot push something through there, when are you ever going to push it through? >> i tell the story in the book where they have all this anxiety about proposing something too big, if congress was going to rejected out of hand. $775 billion was the number they settled on in internal meetings. are they going to tell us -- they are very nervous and they finally present the number. they were too clever by half. they just put it out there, what they thought was necessary, it is possible that they could have started at a trillion dollars and maybe would have it -- we would have got a couple hundred billion dollars more. tavis: again, negotiating

against yourself when you control the house and senate. but i digress. the second issue in which you go deep is deficit. again, i don't get this because there are people everywhere saying it cannot let these republicans pull you into a debate about deficit reduction. now is not the time. the economy cannot handle it. our system economically is too fragile. how did that happen? >> it really happens for a couple of reasons. i think you have to start with the president himself. i tell a story in the book, november 2009, late in the first year. two of his aides, the congressional liaison, and peter orszag, the budget director,

have this idea that they develop a plan for basically ending not just the upper-income bush tax cuts, but basically all the bush tax cuts. it was a little bit convoluted but basically that was the gist of the plan. that was the way you were really going to balance the budget. it is hard to do it in the other way. the other effect, according to the plan, would require if you wanted to continue the tax cuts, you have to offset them with other revenue or other spending cuts. the thought there would be a political benefit to this, to make republicans on up to the cost of the bush tax cuts. so they develop this plan and they take it to obama in this meeting in the oval office in november 2009. a lot of the rest of the economic team is not sure about this because obama has run on never raising taxes on the middle class. obama was actually very intrigued. he started asking a lot of

questions about how it works. he was taken with the effect on the deficit and with the political effects of making the republicans on up to the cost of the tax cuts. precisely because -- what is up happening is a lot of the political hands are made nervous by this because he would be reversing himself on a very big campaign pledge about not raising middle-class taxes. biden said this is crazy, we have to put a stop to this right now preconceived the insight into a guy who is willing to entertain going back on probably the most politically sensitive of his campaign promises of 2008, if it means putting yourself in a better position to balance the budget. i think you see that current running almost from the beginning of his administration. we check the stimulus, they are

talking about how to make sure we are not totally vulnerable on the deficit. peter orszag is very -- is already convening meetings, saying this thing is going to dog us for the rest of the administration. we've got to do something now, otherwise it is going to be hopeless. he is pushing to put out a new set of budget proposals in august of 2009 that would impose some real constraint on the deficit. this is like six months ahead of when these proposals normally happen. it got pretty far in the administration. a number of meetings convened with the economic team. they ultimately decided we cannot do this the same time we are doing health care. so they abandoned it. seleucid -- you should see the level of the intensity of the focus. over the course of the next six months, peter orszag is waging

this battle within the administration and obama is pretty receptive to it, that we have to get the deficit under control. that plays out over the course of the fall and into the spring. what ends up happening is, they don't actually produce a proposal on the deficit, but they go around and around in circles. summers favors more stimulus immediately. peter orszag thinks the deficit should be the higher priority and they just end up going around and around in circles, to the everlasting frustration of the president. he walked out of a meeting in december 2009 saying we are just having the same conversation four weeks and weeks. tavis: what do you make of president bush's remarks the other day that he wishes they were not call the bush tax cuts? >> i find it a bit ironic.

you make tax cuts this signature initiatives of your presidency. chutzpah is the word to want to do is claim ownership of the tax cuts. tavis: for those who clearly understand clearly in layman's terms that the president had a whole lot on his plate and there is a lot happening in the economy that it could not control, he has done his best against all odds. what is the best claim that he makes for getting reelected this time? >> we were dealt a terrible hand. it was a terrible disgrace, and no one can deny that, this idea that romney is putting forth that he has somehow made the

situation worse. it is preposterous. the softer the crisis. the way i like to think about it is, they got the patient out of the emergency room, and that was to their everlasting credit. but in the physical therapy, the recovery portion, getting full use of your former faculties, they have left a little bit to be desired. remember how grim things looked when we were in the emergency room. the second thing you have to emphasize, which is done pretty well in the last few months, i have learned that dealing with these guys in a bipartisan way is not going to get anywhere. of this point forward, if i want to get something done, i will take my case to the american people and put pressure on them from the outside in. he has done that well. we saw that play out in the payroll tax cut. i am hopeful that should he win reelection, he will stick with

that model. i think that model is effective at getting things done, where as the kind of bipartisan, good- faith negotiation just was not there. >> i know real fan of tim geithner, with all respect. the armies in this book that you talked about, he said to the president one day, your legacy one day is going to be that you kept this country from going into another great depression. and the president said, that is not enough. the new book from noam scheiber, called "the escape artist, how obama's team fumbled the recovery." that is our show for tonight. until next time, keep the faith. >> for more information on today's show, visit tavis smiley at pbs.org. hi, i'm tavis smiley. join me next time for a conversation with --

abc's a actressnnie potts. that is next time. we will see you then. >> every community has a martin luther king boulevard. it's the cornerstone we all know. it's not just a street or boulevard, but a place where walmart stands together with your community to make every day better. >> and by contributions to your pbs station from viewers like you. thank you. >> be more. pbs.

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