and james galbraith is a long- time observer of the fed.e's a professor of government and business relations at the university of texas at austin. professor galbraith, you do not believe bernanke should be confirmed. why not? >> well, i have a great deal of respect for chairman bernanke, both as a civil servant and as a professional economist, but this was an institutional failure of the first magnitude. he was chairman of the fed in advance of the crisis. he failed to heed the warnings that were being offered about the dangers in the housing market, about the dangers in derivatives. the fed was lax in its approach to the regulation of the financial system at that time. and, the crisis happened on his watch. in a sense, he was the admiral of the fleet. it went aground. it seems to me that, in the principle of command responsibility, the institution should get new leadership at this time. >> lehrer: alice rivlin, you see it differently. >> i do. >> lehrer: tell us why. >> i think the whole financial community bears a lot of responsibility, a

economist james galbraith and former fed vice chair alice rivlin debate his record. >> brown: and the relevance in our time of john maynard keynes: "newshour" economics correspondent paul solman has a somewhat off-beat explanation. ♪ my general theory made quite an impression i transformed the econ profession, you know me, modesty say it loud and say it clear, we're all keynesians now. >> lehrer: that's all ahead on tonight's "pbs newshour."

you watched it for many ars as has professor galbraith.e says a whole new culturis eded and it can't haen with the current chaian. you don't see it. i think a lot of changes ar necessy, and some of them are in the processf being made. we he a bill from barney frank's commite that will -- >> lehrer: in e house. >> in the hoe -- that would chan the regulatory structure rather consirably. i don't agree wi all of it. but i thk bernanke is an experienceperson who was a studt of the great depression, had handled himself extrely well under fire, as jamie lbraith said, and is the rig rson to go on leading e fed now. >> lehrer: professor gbraith, if not bernae, who? or do you ink in terms like that? th, well, there is a better person out there who couldo the b? is it what you say, a ltural problem, not an individual pblem? >> i thi there are capable people. there are capable ople in the federal reserve stem now who would be put in arge. people who have the requite experice and the leadership capacity. the esident made a choice to -- in effect, to c

the report said american peter galbraith floated the plan when the presidential election was embroiled in fraud. he was later dismissed from his job. president obama will face new pressure in his own party over sending more troops to afghanistan. the house could vote next month on a resolution to end the conflict. and speaker nancy pelosi said last night she won't round up votes to defeat it. she said, "the president is going to have to make his case." republicans said today they still support the surge. in pakistan, intelligence officials said missile attacks by u.s. drone aircraft killed at least 17 people today, near the afghan border. they said some of the victims appeared to be foreign fighters. the u.s. has carried out more than 40 drone attacks this year inside pakistan. u.s. officials today played down reports that insurgents in iraq and afghanistan have intercepted live video from american drones. an account in "the wall street journal" said militants are using $26 software programs-- available online-- to hack into the feeds. a senior pentagon official insisted the problem ha

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