captioning sponsored by macneil/lehrer productions >> brown: good evening. i'm jeffrey brown. the cia announced today that 7 of its employees were killed by a suicide bomber in afghanistan. six others were injured. >> suarez: and i'm ray suarez. the dead included the chief of the targeted cia post. on the newshour tonight, the latest details about one of the deadliest attacks on cia personnel in the agency's history. >> brown: also tonight, a federal judge has dismissed all

charges against 5 blackwater security guards accused of killing unarmed civilians in baghdad. >> suarez: the president gets a preliminary report into the attempt to blow up a u.s. airliner. we'll talk to intelligence community veterans about what went wrong. >> brown: then, a 'second look' as paul solman asks economists one central question about the recession: >> why didant -- why didn't the fed tell us? >> why didn't we warn you. >> yes. >> suarez: gwen ifill looks back at a dramatic decade in u.s. politics. with amy walter, andy kohut and michael beschloss. >> brown: and the poetic partnership between one of russia's leading writers and the husband who translates her. >> this gives a lot of advantages to the -- view. because he gets to translate poems that we lived through together.

>> brown: that's all ahead on tonight's pbs newshour. major funding for the pbs newshour is provided by: >> this is the engine that connects abundant grain from the american heartland to haran's best selling whole wheat, while keeping 60 billion pounds of carbon out of the atmosphere every year. bnsf, the engine that connects us. >> chevron. this is the power of human

energy. intel. supporting math and science education for tomorrow's innovators. the national science foundation. supporting education and research across all fields of science and engineering. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> brown: the director of the central intelligence agency confirmed that 7 cia employees were killed and 6 others wounded in an attack on a base in afghanistan yesterday. a suicide bomber penetrated camp chapman detonating his vests filled with explosives.

the names of those killed have not been released by the cia. the associated press reported that among the dead was the chief of the agency's khost base. she was described as a mother of three. the attack was one of the worst- ever carried out against the cia. prior to this, four known cia operatives had been killed in afghanistan since 2001. in a message to employees today, cia director leon panetta said "those who fell yesterday were far from home and close to the enemy, doing the hard work that must be done to protect our country from terrorism. we owe them our deepest gratitude the site of the suicide attack is not far from the pakistan border, one of the areas where the taliban insurgency is strongest. yesterday was also the deadliest day for canadians in afghanistan in two-and-a-half years. four canadian soldiers and a journalist were killed in a roadside bombing while on patrol in southern kandahar province. >> on behalf of all the

soldiers, airmen, sailors and special operators of joint task force afghanistan, i offer our sincere condolences to the families and friends of our fallen. >> brown: the reporter, identified as michelle lang, was on her first assignment in afghanistan for the "calgary herald." the taliban has claimed responsibility for all of yesterday's violence and said that the attack against the cia was carried out by a taliban sympathizer from the afghan army. the afghan defence ministry responded that no afghan soldiers were involved. for more on the attack in khost we turn to joby warrick who covers the intelligence community at the "washington post." >> what's been learned about how the attack was carried out, how the bomber got on to the base? >> officially details are coming out very slowly about this incident. we know that there were early reports about someone wearing a europe, perhaps a guard or somebody who was on the basement but more information as we develop more information it looks like it may have been actually an inform apt who was invited to come to the

base as often happens to provide information to cia op ratives. this happens routinely, this base where people were brought in to be recruited as sources. and this may have been something like that. >> among the dead, the senior officer at the post, a group of agents, severe injuries among another group of agents. this appears to be someone who knew where to go, who to see, and how to move around this facility. >> yeah. there is very likely this case, this somebody who knew where they were going. this is essentially a trap that was set up by the taliban and their sponsors to try to get at what really is the point of the -- for the cia operations in the area. >> describe the size of the loss. the cia is relatively small agency compared to an army or a marine battalion, to lose this many agents at once must be an enormous casualty. >> it's devastating. we are talking about very small numbers of individuals,

sometimes cia works in groups of two or three, this is a base that had maybe a few dozen people at most when it's fully based. but this is essentially like wiping out a battalion for a military unit. and it's going it to take a very long time to recover from this. this not just a loss of life but the wealth of knowledge these individuals possess. probably talking maybe a hundred of year in experience, at counterterrorism of the individuals killed in this one incident. >> camp chapman was located near the border with afghanistan and pakistan, a very turbulent place in recent months. any idea why camp chapman would be targeted. >> it was probably a dream target for the taliban, because this is a base that also happens to help coordinate the jones strikes, the predator strikes that we all here about. they don't actually fly drones from this base. but these guys are involved in the targeting, the surveillance. they coordinate these strikes so this is really sort of 9 nerve center of these operations in the area. that really went to the heart of what the cia is trying to do.

>> you mentioned that the agency is unusually quiet. but today the director leon panetta did release some information. what was he able to say about these people and what their mission was, if any? >> it seemed like a very personal message because this is an agency that has been rocked by problems, by -- we've seen the last few weeks questions about whether or not they were doing a job and tried to prevent terrorist attacks. they've had a very difficult few months. i think it was a message to try to reach out to them and say we're good patriots. we are putting our lives on the line and we are doing good work here. it seemed to sort of boost morale to keep these guy s going. >> suarez: will we ever know who these people were and what they were doing in southeast afghanistan? >> in some cases we probably won't. because these people work often undercover. their names are confidential they work in areas where it is very remote. very little contact with family members and most of them are middle-aged and older and do have families

back home and they can't often talk to them for months at a time. and so these people do a great service for the country and some really will be unsung heroes who will have a star on the wall and perhaps no more publicity than that. >> suarez: joby warrick of "the washington post," thanks for joining us. >> suarez: in another war development today a federal judge in washington has dismissed charges against five guards at the former blackwater security agency accused of killing seventeen iraqi civilians in baghdad in 2007. for more on that story, we're joined by matt apuzzo of the associated press. matt, let's begin with the original story. who were these blackwater guards working for? what were they doing in baghdad in 2007? >> well, blackwater was hired by the state department to basically guard diplomats. they were security guards. they were bodyguards. and they were in a convoy that was actually responding to a car bombing in september of

2007 when depending on which side of the story you believe, they were either ambushed by insurgents, or they unleashed an unprovoked attack by civilians. regardless of which story you believe, 17 iraqis are dead and this is obviously really touched off some anti-american sentiment abroad. >> suarez: at the time there was a lot of controversy surrounding the case, a kind of tussle between iraq and the united states over who would try them. who did the united states assure the iraqis to get these men back to the united states? >> well, their government wasn't going to allow -- the united states government was to the going to allow these men to be tried in iraq. i think there was a feeling that that would have set a really dangerous precedent for military personnel and u.s. contractors working in war zones. so the case was brought to washington. it was kind of an unprecedented case bringing u.s. contractors to

washington for a trial for a crime allegedly commited in a war zone. and baghdad, people in iraq have really wanted to know how is this going to play out. how is the u.s. judicial system going to handle this case? are we going to get justice? >> so judge ricardo you arebina ruled today. what did he say. he was the he sense of the ruling and what reasons did he give for it? >> he threw out the entire case. he dismissed the indictment against all five member. and the reason was he basically said that prosecutors crossed the line. and they mishandled evidence. what happened is after the shooting, the state department came in and said to the contractors, we want to know what happened. tell us what happened. and as part of -- as part of their contract they have to tell the state department. but that is a -- in legal terms a coerced statement. they're required to give it and so as part of the deal, you give us a statement about what happens, we'll use it for our internal investigation and we won't use those statements in any criminal prosecution. but what happened was those

statements were used in the criminal case. they were used to underpin search warrant, they were used to question witnesses. the prosecutors read them. some of the information made its way to the grand jury. and the judge just said it had so tainted the case that there was no choice but to throw it out. >> suarez: so is this it? does the government get another bite at the apple, a way to take another run at this? or are these men now out of any legal danger. >> well, the government can appeal. and there is a legal argument to be made that you know maybe the state department doesn't have the authority to give blanket immunity protection to these guards. but at this point, the hurdle there is a really high hurdle for the justice department to clear, to make this case come back to life. this is a big win for the security guards. and they had felt like they were going to be able to prove their innocence at trial regardless of the evidenceary issues. they felt like this was a legitimate fire fight. they were acting in self-defense.

but at this point, we'll never know. it appears we'll never know whether this was a self-defense. whether they were ambushed or whether this was a massacre. >> is this case being followed closely, back in iraq, two years later? >> well, you know, when the indictment came down, people in iraq were talking about the death penalty, as sort of, you know, to many people in iraq this is sort of the hallmark this is the signature moment for you know, the u.s. -- u.s. contractors slaughtering innocent civilians. so you know, because of the time zone we don't have any reaction yet out of baghdad but you can be sure this is being watched very closely there. and it will be very interesting to see how this is taken both by the government in baghdad and sort of, you know, the average iraqi on the street. >> suarez: matt apuzzo of the associated press, thanks for joining us. >> hey, thanks a lot.

>> brown: now, for the other news of the day. here's hari sreenivasan in our newsroom. hari. >> sreenivasan: five americans will face terror charges in pakistan, according to an announcement from pakistani police today. the court date for the five men was set for january 4. police plan to charge them with terrorism and seek life sentences. the young muslim men were all arrested at this house in central pakistan earlier this month. police found jihadist literature and maps of pakistani cities and sensitive military sites. >> they were going to plan something big. otherwise they would not need five americans to fight alongside them in war front of afghanistan, especially when they do not have any military training. >> sreenivasan: the men, aged 19 to 25, are from the washington, dc area. their families contacted the fbi before their arrests, after finding a farewell video made on behalf of the five. the men reportedly met here in northern virginia when they were members of a youth group sponsored by their mosque.

>> our group discussions never talked about politics, never talked about ongoing conflicts, never talked about fighting against anyone indirectly or directly. on the contrary we always promoted compassionate toward others and being good stewards of humanity. >> sreenivasan: officials in both the u.s. and pakistan have said they expect the men would eventually be deported back to the u.s. but charging them in pakistan would likely delay that process. as the year comes to a close, u.s. military deaths soared in afghanistan, where the war is escalating. but fewer troops died in iraq, where the operation is winding down. in afghanistan, 318 american troops were killed in 2009. that's more than double the number who died in 2008. in iraq, 150 americans lost their lives this year. that toll is nearly half what it was in 2008, when 314 u.s. troops died. 2009 ended with some positive economic news. the labor department reported

new claims for unemployment fell unexpectedly to their lowest levels since july 2008. but for all of 2009, nearly 14 million people claimed unemployment. stocks on wall street closed out the final day of the year's trading on a down note. the dow jones industrial average lost 120 points to close at 10,428. the nasdaq fell 22 points to close at 2269. but for the year, wall street made a major comeback, rebounding from 2008's dismal drop. the nasdaq climbed almost 44 percent, while the dow gained nearly 19%. ruth lilly the last surviving great-grandchild of pharmaceutical magnate eli lilly died last night in indianapolis. over the course of her life, lilly gave away the bulk of her inheritance some $800 million dollars. most of it went to charitable organizations and arts groups based in indiana. she also gave a $100 million dollar donation to the literary magazine "poetry", which had rejected her submissions for years. lilly was 94 years old. parts of the world have already

ushered in the new year. in sydney, australia more than a million people turned up to watch fireworks over the city's landmark harbor bridge. fireworks also lit up the skies over red square in moscow. back in the u.s., crowds began gathering in new york's times square under a light snow for the ball drop at midnight. security is stepped up there, with police and other officials planning a sweep of the area for biological contaminants. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the newshour's website. but for now back to jeff. >> brown: and still to come on the newshour tonight. conversations with economists about their failure to warn of the recession. a review of the past decade in politics. and the poetry of vera pavlova. but first president obama received a preliminary report today about last week's attempt to blow up a u.s. airliner. in a written statement issued in hawaii, where he's on vacation, the president said he plans to hold white house meetings next tuesday to discuss improved intelligence-sharing between government agencies. and he repeated that "human and systemic failures" had occurred

in the run-up to the attempted attack. last night we talked to former members of the 9/11 commission about all this. tonight i'm joined by veterans of the intelligence community. charles allen served in the cia and as undersecretary for intelligence at the department of homeland security. tyler drumheller was director of cia operations for europe, among other posts. and paul pillar served in a variety of intelligence analysis and management positions. mr. allen, i will start with you. after 9/11 there was a lot of reorganization in the intelligence community. has it worked? what do we now know? >> i think it's worked very well overall. obviously there's still more work to be done based on this event that occurred on christmas day. but the intelligence reform and terrorism prevention act said we should establish a national counterterrorism center and all intelligence agencies should ensure that the information flows freely and fully.

and that information is shared even in the sensitive with the national counterterrorism center. and we do this on a regular basis. it is not perfect. a lot of cables flow in every day from all over the world. they flow from many sources, military, intelligence, law enforcement, and all that data has to be looked at. assessed and determined, does this really pose a direct threat to the interests of the united states, at home or abroad. this is a very large problem. we need to streamline this further. i worked in the previous administration to work under the homeland security council. and other agencies, the intelligence community, to refine, streamline the intelligence watch list to make sure that information did not flow. sometimes information from nonintelligence agencies does not flow as quickly and as easily into the intelligence channels. >> mr. drumheller, what is the latest incident tell you about how things are

working. >> i think what charlie said is true. there were changes that needed to be made. they needed to draw all the information together. my concern is that if things happen in washington, the setting up of this national counterterrorism center and the director of national intelligence staff has grown bureaucratically. and that itself has created problems in procession the information. >> reporter: a knew bureaucracy. >> a new bureaucracy in between the old community and the collectors. and i think one of the key pieces for me, and i was an operations officer, is the interplay between the analytical people and the operations people collecting the information in the field. and that's something that has to be tied up. the idea is good. the idea is perfect. charlie hit it right on the head but i think there is still a lot of work to be done. and one thing, this is an area where bureaucratically it's better to be smaller and smarter rather than -- >> mr. pillar, the idea of course was to help the information flow, to allow

everybody to talk to each other. >> i think the very fact that many of the things we heard five years ago before this reorganization was accomplished with much fanfare, we're hearing today about connecting dots, about information flow and so on, suggests that things have not worked as well as they should have. >> reporter: where do you think the problems are? >> i think tyler has touched on part of this. we did have two new bureaucracies established in the reorganization five years ago. the office 6 director of national intelligence and the national counterterrorism center. and this was despite the fact that what we were hearing for the 9/11 commission and others was about the problems of information flowing across bureaucratic lines, about so what did we do? we created two new sets is of bureaucratic lines. >> i think one of the problems is just the sheer flow of information, all information flows in, a lot of it may be fabrications, rumors. people are trying to absorb vast amounts. one of the things i think really there needs to be

improvement at the nctd c, national counterterrorism center is that interchange between operations officers, collectors and analysts whether it is technical intelligence collection or human source collection. i think we miss some of that because of the distance between operators and collectors and analysts. only when you have the analysts interacting with the collectors, i think you get the synergy that is required. analytic trade craft is lacking in the community. i think we need a lot more intense training. and we don't have it. and i think what paul said pointing out to some of the issues involved gets back to fundamentalically this closeness between collectors and analysts. >> reporter: mr. drumheller, you served as a station chief. in this case, take this case, in nigeria, what is -- what was supposed to happen when the father walked in to express concerns. >> well, it varies from embassy to embassy because you have to work out the arrangement with the embassy. normally, the walk-in of this type would be handled

either by the cia personnel or by the embassy security officer. then you would write up a report from what he said, especially given who he was, the prominent guy neverian, well cone -- well-known totem wasee. and this is what they did -- >> they did that. >> it went in this information and i think charlie and paul, back me up on this, these cable goes automatically to the national counterterrorism center anyway. i think there is an idea that this has to go through cos cia and be released. in information goes out automatically to the recipients and -- but then you have to have, to make it really work effectively you have to be able to have an analyst, an experienced analyst call up, be able to call up and send a message directly to the station and say who is this guy, what was it like, how did it work. and have 9 station chief be able to follow up and go back and say what happened to that report i sent. that is a very important part. >> because there are always going to be various pieces of evidence, as there was in this case, right, and somebody has got to pull it together. >> and we should realize what we always do after

these incidents, whether it is a real attack or a close call like this one, we are indulging in retrospective hindsight. and we're dealing with pieces of information that in retrospect n hindsight, look perfectly clear. oh this should have been seized upon. we have to remember that this is amid a flood of information, that all these agencies have to deal with, every day, department of homeland security, nctd c, the center we talked about, cia and others. and in realtime, dealing with these reams of information, these things aren't necessarily going to stand out as they do so obviously when we conduct this exercise in hindsight. >> your sense, mr. allen is that changes that have occurred are in the right direction and so is it -- -- i don't want to put words in your mouth s it tweaking that process now? what needs to be done next? >> i think we have to be, as i said earlier, more streamlined, more transparent, and ways that gets the analyst much closer to the people doing the

collecting. and i think we're a degree of separation with the formation of counterterrorism center, even though there are a lot of cia officers and fbi officers working in the nctd c as it is. but there still has to be greater synergy and greater streamlining of the movement of data and the back and forth. because when i was at homeland security, i found we were reacting to almost everything that came in, rather than looking at the real wheat among all that vast chaff that flood of information that paul talked about. >> are you worried enough about what you call this new bureaucracy that you think should be cleared out a little bit. >> yeah, i think what charlie is talking about, i think transparency is that you need to remove these layers of washington -- washington work in between and get back down --. >> reporter: is that possible? >> i hope so. because the real issue here is, and one of the things hopefully avoid doing is looking at this, looking for a system, a cookie cutter

system that will fix all of this. because it really comes down to the situation of the analyst, and the intelligence officers. and getting them the opportunity to make the judgement, not just in committee and not just based on weighted factors but as individuals who have an expertise in it, not look for systemic solution. >> of course people do look look for systemic solutions. >> of course. and we have this appetite for some sort of fix to a bureaucratic or other kind of problem and we like to have this comforting sense that if we fix the problem, then we're not going to have a recurrence. that simply is not the case. >> we just have a minute here. but i do want to ask you about the events in afghanistan. you heard joby warrick talk about stuff. of course the terrible human loss. >> it is terrible. >> what does it do for the loss of knowledge, the loss of ability in a place like afghanistan? >> i think we are talking about some very experienced officers who were killed yesterday. and it is a great and tragic loss.

i'm very mindful of 17 april 1983 when we lost our entire station virtually in beirut to the hezbollah bombing. i went through that painful process because some of the people killed i knew very well. so we're going to go through this again. i think dcia director panetta said it right. we're very strong organization. filled with a lot of brave people who put their lives on the line every day. and they do it repeatedly, every day. and that's the kind of agency that i know, it is my beloved agency and will get through these difficult hours. >> reporter: we will have to leave it there, charles allen, paul pillar and tyler drumheller, thank you all three very much. >> thank you. >> suarez: now, we take a second look at a report from our economics correspondent paul solman. in january paul went to san francisco to ask some of the nation's leading economists why they failed to predict the economic meltdown.

it's part of his ongoing reporting on making sense of financial news. financial -- warned for a decade of irrational exuberance, and eventual bust to the housing and stock markets. >> so, prices were going up, up, up. and it seemed like it would never end, right? >> it must have seemed that way. i don't know how people can believe that. they just can't go up, up, up, and end up in the strat sphere. >> this was a ground tour of san francisco with bob schiller and a nobel laureate bob ackeroff taking a break from some 10,000 colleagues in town for the yearly economics convention to which we had come to ask one question. why didn't you, the economics profession, warn us? why didn't the fed tell us? >> why didn't we warn you. >> yes. >> we collectively or me personally.

>> well, either one. >> reporter: many said they had sounded the alarm but that in good times no one listened. especially if there is a good story on the other side. >> the idea is because of the population growth which would go on forever, the economy is growing because china and india are showing the way. capitalism is exploding, that seems like well maybe that is a reason that prices are just going to go up, up and up. >> and they forgot about the fact that they might go down and down and down. >> the convention itself was packed with top flight economists, holding the newly minted ph.ds. but many didn't warn us. so why? alan blinder was vice chairman -- vice chairman of the fed in the 1990s. >> i think the fair answer is nobody thought this might happen. things can go wrong. but the number of things that have gone wrong and the ferocity with which they have gone wrong, i think, was beyond the imagination

of almost everyone. >> reporter: or as standford's caroline put it. >> it is easy to say this individual housing and mortgage business is risky but it was very difficult, for even a very good economist to say i understand how all of these different investments when they all start collapsing together, even just a little bit, are going to aggregate up and roll on to one another it is like understanding how all the dominos are going to hit one another. it is a much tougher problem. >> reporter: and how you can ever know that ised finance professor. >> disasters can happen at any time. in fact, what makes them disasters is we're not expecting. if we were expecting them, they wouldn't turn into disasters. >> reporter: but in fact there was plenty of data to suggest the worst. and plenty of economists who saw it coming, from dean baker and jamie galbraith on the left to martin feldstein and ken rogarth on the right so why were so many others blindsided? because we were all so lied

to says m.i.t.'s frank levy. >> i think part. reason that many people didn't know is that the people who were issuing all these derivatives had big incentives to deep what they were doing secret. same thing with the banks. if the banks put on their books all the risky loans they were carrying, all the risky loans they were making, the federal reserve would step in and say well you have to increase your capital requirement and that would mean the bank kos make fewer loans. they didn't want that. they wanted to make all the loans they could to generate all the fees they could. so everybody in this game had big incentives to keep hidden an awful lot of the activity they were doing. >> reporter: but the conventions most liberal economist had another explanation for the lack of warning. the ideology of the era. norbel laureate joe stiglitz. >> people wanted to believe that markets were self-regulating. and if that was the case, you couldn't have a bubble. because if there was a bubble, you needed to have somebody do something about

it. and so this ideology which drove the notion that government always got in the way, that regulation was bad, was a central piece in the ability of both the profession and politics to look the other way. >> reporter: and those who log ago beged to differ were marginalized said dukes william garrity. >> there is not much of a tendency to hire economists who think outside the box. and so as a consequence there was an ideaological blinder that was on people's eyes. >> instead those inside the box prevailed, thinking markets regulate themselves. nobel laureate ken arrow is a living legend at this gathering. >> the question we're asking everyone is why didn't you warn us. >> exactly. well, i feel a little responsible in a way that i should have. we just assumed if we knew it, so did the people, the

smart people that had no reason to distrust their intelligence in the investment banks so we took it for granted, these people protect themselves. we were wrong, obviously. >> but time to go back to our tour, and on next stop, north beach, among other things, san francisco's puppy paradise. >> people are driven by their animal spirit. >> schiller and ackeroff have written a new book about animal smirts, the words of england's john maynard keynes which we love using in our pieces for the visuals. to these economists, animal spirits are the key to both the crash and our failure to anticipate it. they're the emotions that actually animate an economy like trust and confidence. >> down, please. >> reporter: and they tend to ebb and flow for better and worse. >> the basic problem, i

would say, is that we became overconfident and then we discovered that it was built on faulty premises and now our confidence is crashing. >> i think the major thing was that people are simply too trusting. they trusted that they could buy mortgages and things like that, which simply were not going to pay off. and they should have been much more careful . >> but of course this is easier said than done when riding a wave of prosperity. in fact, the act of making money can induce an actual physical high says economist andrew low. >> it turns out thato scientists have shown that financial gain triggers the exact same reward circuitry in the brain that cocaine does. so when are you making money, are you actually engaged in a kind of activity that generates a drug-induced stupor in of the same way that having a few drinks or being on cocaine would

actually make you relax and be a lot less concerned about risk. now if you take it to the extreme, if you take hall use genics where not only do you not worry about the risks, but you don't even see the risk, that can get to a situation whereou walk off a 30 storey building and because you think you can fly. >> reporter: okay, so our animal brains, even the biggest ones, perhaps, are subject to inebriation, so shouldn't government play the role of sober sides. unfortunately, said republican martin feldstein who warned of the severe crisis two years ago -- >> there is always a tendency in washington to be optimistic, to think that things are going to improve. >> reporter: in the end, then, every person in the game had an interest in keeping it going. >> a central lesson is that this is a kind of -- where the explanation of the tragedy is human failings deep within what it means to be human. and what it means to be human is sometimes to go to

excess. to basically not pay enough attention to risk. humans make those kinds of mistakes consistently. and it's lead to some of the great crises in history it also lead to some of the great accomplishments in history. but it is all about us as people. >> the tragedy of underestimated risks takes us to the last stop on the cable car line. and for this piece. market street. scene of another panic a century ago. >> the earthquake of 1906 was preceded by many california earthquakes. and there were architects and urban designers who were saying you needed to prepare better for the next one. the reason it was so bad is because they didn't prepare. the problem was nobody wanted to think and come up with the cost and the expenditure of preventive measures which would have limited the damage of that earthquake. >> and now for years we've been hearing about the imminence of, in california, the big one, yet you live here, why? >> it is a great place to

live. of course i live here, i don't think about it. >> so you, in your every day life. >> yes. >> are in a version of the willful denial that we've all been in in this country with regard to the economy for years? >> that's exactly right. >> reporter: george ackerloff that is, has left his heart in san francisco. and the heart has its reasons. and the mind its receptors, for which reason seems to be no match >> brown: as we said, paul shot that story at the american economic association's annual meeting last january. the group will gather again this weekend in atlanta and paul will be there. >> suarez: now, a year end discussion on politics. gwen ifill recorded this yesterday. after ten years of -- wars a tacks and economic booms and busts, we take a look back tonight at the decade in politics and governance, through the eyes of three newshour regulars who have helped us cover it all.

amy walter, editor in chief of the hotline national journals political daily, andrew kohut for the people and the press and presidential historian michael burblove. starting with you, michael. what would you say is the signal event of this decade? >> it would have to be the attack of september 11th -- 001 because not only has that caused all sorts of obvious changes in american society but look at the the kind of events that led to. george w. bush declared a war on terrorism, lead us to a war in afghanistan, iraq, used very harsh measures against terrorism. in 2004 i think andy would agree with this, george bush was re-elected largely by people who may have been concerned about his other policies, but were worried about terrorism. 2080 t very unlikely that barack obama would have been nominated by the democrats if he were not so against the war in iraq, able to benefit from an anti-war sentiment. so if 2 2001, if those attacks had not happened, our decade would have been

very different. >> andy, why not the economy, this is pocketbook, close to people's heart and we had an incredible crash at the end of the decade. >> yes, the economy t wasn't only 9/11, 9/11 was the defining moment. but this was a decade that started out bad, and then went to really worse in the 19 -- in 1999 64% said the country was -- the national economy was in good shape. by 2001 into was down to 36%. in 2009 it's down to 11%. we had a decade where the american public did not get income gains, real income gains for much of the decade and then it ends with this smashingly bad great recession, so the economy is right behind 9/11 and it coloured many of the things that we think about and study here, politics, social and economic behavior. >> ifill: amy, when you think about these two big

signal issues, the 9/11 attacks, the economy, did they serve to insurance late our president or to expose them or to public outcry? >> well, and i think michael said it quite well which is you start the decade off with the president where terrorism is, sort of his calling card it is an issue in which republicans use to make gains, not just in 29002 midterm elections but in 2004, certainly successful. and then we turn it around almost 180° in 2006 and 2008. frustration about iraq. frustration about the economy. i think what is also interesting is fundamentally this comes down to if we are talking about this decade, to me is just a breakdown in how people felt about institutions. institutions basically failed americans. and it started off with things, september 11th was different but i think it started off this decade with things like the enron, and you ended it, of course, with bernie madoff and the collapse of wall street.

and so i think fundamentally what we are seeing politically too is sort of the rise of the individual, that institutions now are no longer as trusted, including politicians. >> i was going to say, the beginning of the decade coincided with the most condition tested election of our lifetime. >> that's right. and so you started off there, you know, but what i thought was really interesting too was when you look at party identification in 2 thousand and now compare it to where we are now, looking at the pew, poll, of course, the number of people who identify themselves as independents has jumped six points. it's not that the number of people who identify themselves as democrats has gone up either. this number looks almost exactly the same as in 1992, where we had some of those same elements coming into play. frustration with the statusco, there was scandal in washington there was obviously economic upheaval. and so i think what we are seeing both in campaigns, and the way politicians talk

about things, it feels very perotian. we will move away from institutions. >> as in ross perot, who don't remember those wonderful days. michael. >> yeah, no, i think amy is exactly right. and the other thing is that you know, what happens to public feeling about government, it goes down when there are big mistakes. after vietnam people said our government made a big mistake in southeast asia. watergate, the same thing. in 2001 there was a feeling after that that our government failed it to keep us safe, obviously on that day in september. but even more than that, 2008 september, our government did not keep us americans safe economically. congress was asleep at the switch. regulatory agencies, certainly the executive branch. and that was such a huge malfunction that i think there will be consequences from that for a long time. >> it was absolutely a meltdown. >> one of the positive consequences of this bad stuff is this was a record

decade for political engagement. in 2000, 54% of the eligible elective turned ot. by '04 and 80ee was above 60%. big, big numbers and we also saw that in '06. one of the downsides of the political engagement is the polarization that we've seen in this decade. larger differences between 9 way democrats and republicans think about most things than in the 1990. >> if you say at the same time that most people don't -- party identification has gone down, does the polarization matter as much as it would have if everybody identifies republican or democrat. is it possible that everybody in the middle in this decade, they are the ones who are steering where the boat goes? >> they are pulling the lever. oa was elected because of the independence. president bush won his narrow second term victory because those independents were more confidence -- confident of his ability to deal with the terrorism and the foreign threats than john kerrey. so yes, the number of independents is very salient but keep in mind, the one

thing that we have seen is a really very politicized decade compared to the 1990s. >> and what is fascinating too is you then put technology on top of it. it is not just that more people are getting engaged. but their voices are being heard the way they haven't before. nobody ever thought you could make your own individual, -- video, post-it up on the computer and have an influence on people you have never met and facebook, all of those things. i think whether the number of people remain engaged, in terms of the total, is i think as important fundamentally as just the way that individual people feel like they can make a difference in the way they engage. >> but there is an opportunity to say something positive. >> keep going. >> we need something positive. >> this is the decade of the information revolution. at the beginning of the decade 4% of people were connected to computers on a fast basis t is 65%, 72% to the 58, the internet is all encompassing. most people use the internet. it has lead to search, it's

lead to social networks, that shape people's -- the way people lead their lives in ways that were unimaginable. >> you can argue barack obama took advantage of that. >> absolutely. >> whatever happened to small government. this that used to be the mantra, the thing that could get you elected, to run against washington, run against government, and now we are in an unprecedented era. >> 2009, huge budget deficit, lead by barack obama to make sure that a second great depression with not happen, as it did not. by may see the era of small government is back again next year. because there is every indication that we are -- republicans are going to say next year is, you know, don't talk about second great depression, talk about the fact that this is the most big government president at least in recent times, ultimately will lead to a rise in tax, not good for america, they'll use that in the midterm campaign. >> feels a little bit like being on a treadmill though. >> this cycle that we are on. >> there is the boom and the

bust and you know, i think that it is true are you going soee members of congress trying to find ways to distance themselves from washington. i think that has been something of the trend for a while now because of scandals and because of the association with washington has never been particularly positive. but what you are seeing now in the way that candidates are positions themselves now, is all right, sure, yes, there was the bank bailout and then the auto bailout and other things we had to do, but fundamentally we're going to get -- this is the only way to get the country back on track. and they're going to try to talk more specifically about what they are doing, personally. and what congress or the government is doing. >> andy, what about how the way the world sees us. we now see ourselves differently from various reasons. but the world sees united states differently from the end of the decade than at the beginning. >> sure. this is the america against the world decade. anti-american spirled almost out of control for much of the decade in response to shall did --. >> right after 9/11. >> we had a little bit of sympathy for about a year

but then with the onset of iraq and discontent with president bush's approach to foreign policy, we saw america's numbers really go south and there was -- not only concern about president bush, it extended into the broader question of worry about america's unchecked and unrivaled power. now with president obama, some of those numbers have gone back down. but there still is a continuing concern about the exercise of american power. and you could see the way it began to play out as president obama announced more troops for afghanistan and the backlash that began to create. that's going to be with us as a consequence of this decade. people around the world worry about the way the united states conducts itself in dealing with its problems, dealing with terrorism. >> final thoughts. >> i think the flip side of that is, you know, what americans think our future is in the world. there self ree indication that many more americans

than in 2000 now think that ultimately within three decades or so, china will be the most powerful nation on earth, not the united states. if that happens, that is going to have all sorts of consequences, there is huge and never this country, people who are accustomed to being on top. and if that is the way they feel, i think they will look back on this decade and say that during these past ten years, maybe more decisions were made that had to do with china rising to that dominant position than almost any other. >> and we will gather at the end of the next decade hopefully at this table and talk about it again. >> would be nice to think. >> thank you all very much. thanks gwen. >> brown: finally, another in our poetry series. tonight, vera pavlova a russian whose first collection of poems in english, "if there is something to desire," will be published next month. it's translated by her husband, steven seymour who also serves as the interpreter for our profile.

>> ( translated ): my name is vera pavlova. i was born in moscow. i spent all my life there and my impression was i would never leave that place. in moscow i went to school, i went to academy of music there. until age of twenty i wrote music and was going to become a composer. then starting at the age of twenty, i started writing poetry. fourteen collections of mine have been published to date in moscow i met steve in moscow too steve and i represent a rare case of cooperation the history of poetry knows a number of examples of poets being man and wife. though those were not very happy marriages

unless i am mistaken there has been no case of the wife being the poet and the husband being the translator this gives a lot of advantages to the translator because he gets to translate poems we have lived through together >> if only i knew from what tongue your i love you has been translated, if i could find the original, consult the dictionary to be sure the rendition is exact: the translator is not at fault. >> ( translated ): i started wring poetry when i was in the maternity ward.

when i gave birth to my first daughter it turned out i was also born for the first time and in this new life i turned out to be a poet. >> a beast in winter, a plant in spring, an insect in summer, a bird in autumn. the rest of the time i am a woman. >> ( translated ): this book is the first child of steve and mine, it contains 100 poems the only thing i hope for regardless of the outward world is for different people and different nations, i hope their internal world is similar. if i hopefully manage to somehow describe my inner world in this book i count on it will have

resonance with american readers or at the very least american readers find this as a guide book for my inner world, strange as it may appear. >> against the current of blood passion struggles to spawn; against the current of speech the word breaks the oar; against the current of thought the sails of dreams glide; dog-paddling like a child, i swim against the current of tears. >> suarez: again, the major developments of the day. the director of the central intelligence agency confirmed that 7 cia employees were killed and 6 others wounded in an attack on a base in southeast afghanistan yesterday.

a federal judge dismissed all charges against 5 blackwater security guards accused of killing innocent civilians in baghdad in 2007. and president obama was briefed by his national security team on the failed christmas day airline bombing over detroit. next tuesday he plans to meet in washington with agency leaders for follow-up discussions. the newshour is always online. hari sreenivasan in our newsroom previews what's there. hari. >> sreenivasan: on the website tonight, we're marking the end of the year and the end of the decade. gwen ifill, margaret warner and paul solman reflect on their most memorable reporting moments of 2009. and you can read what a group of experts had to say about the most important science breakthroughs of the year. plus, we ask three culture critics to analyze the trends, changes and highlights in film and literature of the past decade. that's on art beat, where you can also find more poems from vera pavlova. all that and more is on our web site, newshour dot pbs dot org.

jeff. >> brown: and that's the newshour for tonight. i'm jeffrey brown. >> suarez: and i'm ray suarez. we'll see you on-line and again here tomorrow evening with mark shields and david brooks, among others. thank you and good night. major funding for the pbs newshour is provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change. what is that energy came from an energy company? everyday, chevron invests $62 million in people, in ideas-- seeking, teaching, building. fueling growth around the world to move us all ahead. this is the power of human energy. chevron.

>> what makes us an engine for the economy? plants across america. nearly 200,000 jobs created. we see beyond cars. intel. supporting coverage of innovation and the economy. >> and by bnsf railway. and the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions

captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org