ken rogoff, why are we so miserable? why is the white house so reticent to take a victory lap? heard the conversation. to say great point, tom, but i will say it now. probably the reason is the inequality debate. people say you have made things good but not for the common person. i think that is not true. get employment, it could have been a lot -- you look at employment, it could have been a lot worse. in the uproar yesterday at half the world having the same -- i saw someple intelligent criticism of the certitude of how we debate inequality. what do we get wrong in our inequality debate? ken: you have to work -- you have to look at the work of angus deaton, who won the nobel prize. there are one billion people living in privilege, six or 7 billion people not living in privilege. thomas piketty's 99% are really the upper 15% of the world. if you are looking at a political question, great. if you are going to make it a moral question, obviously it is about true economic poverty, where a lot of the progressives do not seem to care. francine: the emerging markets are reeling from

is there confidence in the textbook rogoff? kenkarl marx wrote between the first and second industrial revolution. alvin going best tom: it is on page 17 of special saidthe 1970's, everyone inflation for everyone. i think we are in a cloud of this debt super cycle. i do not think we are in secular stagnation. francine: can central banks fight deflation? they have not been able to so far. is qe working in europe? does it work if we are not in a financial crisis? ken: i think qe has a limited effectiveness. they are looking for other insurance like negative interest rate -- other instruments like negative interest rates. they are hoping there will be structural reform. fiscal stimulus for infrastructure. i don't know if it is coming. francine: how do you look at inflation and the conundrum it means for your interest rate setting if your mario draghi? ken: he can do more qe. he probably will. unless he can change more radically instruments, it is not easy to do. scarlet: ken rogoff speaking with tom keene and francine lacqua. alix: co

always, strong, with ken rogoff.dition with me, to begin coverage with ken rogoff. laura tyson is always enthused about her analysis on the american economy. we talked to nouriel roubini recently. this is a first year that i do the weather check because dabbles it -- because. posts is very cold -- because davos is very cold. notre keeping it quiet, to give it away to the competition. editorial -- the survivor's guide to davos. stanley fischer on the edge of frostbite. somebody said to me the other day, is the shot real? yeah, it is. when it is 10 degrees, it is real. francine: what are the 10 things you bring to davos? davide: a warm hat. tom: i am going to take a black velvet that i discovered. i am going to have a flask of guinness. guinness and champagne pie. tom: whatever it is, i am going to bring that. francine: steven major, when you look at -- when you look at swissie and you aboutt i want to talk guilt because i know we have a swissie board. banks,u look at central this was a very tough decision. steven: thi

ken rogoff has written about this come about the numerous floating currencies out there or managed floatscy discipline to avoid the currency war we are falling into? paul: i think there is no other way than letting the markets do their job. rogoffu agree with ken that we do not go back? paul: this would lead to more tension because countries are different. they have different objectives. each moment of time, all these policymakers want to do different things. the exchange market is like a safety valve. it allows these things to be somehow coordinated, and if you fix the interest rate, that is when you have wars and conflicts between countries because they will always disagree on what to do. francine: if we leave china to one side, where could the biggest policy mistake come from .his year? outside china what is your number two policy mistake? paul: i never thought about this. it is a very interesting question. i think probably it is in the u.s. francine: interesting. paul: this program of gradually increasing the interest rates and reducing the quantitative easing program. i am in favor o

of thevid goldman, one most important insights was ken rogoff showing how lonely china is now with acurrency. everybody now floating versus crises ago. what will china do within a floating world? china wants to stabilize the rmb against a basket of currencies, which is a sensible thing to do, abandoning the dollar, which cost a great deal because the dollar rose so half. the federal funds futures market, the federal reserve decided to normalize interest rates prematurely, leading to a spike in the dollar and an overall inflationary -- with the united states in the midst of one of the strangest residential elections in history, it is at least a year before we can talk about that. mainly in the united states. really, we have a monetary environment. my feel with the federal reserve is that it will realize it made imistake and talking -- and think the dollar has probably peaked against the euro and yen. tom: francine, that was a key point from madame lagarde, the idea of a best and attitude. francine: and ben bernanke theessed asia, saying that rally was running out of steam in less we s

we just heard from ken wrote off and he will join us -- rogoff, and he will join us.h on tuesday, monday in london. we will continue our discussion with andrew sentance of pwc. stay with us from london. ♪ ♪ francine: welcome back. a little bit of an update. 40 minutes ago you saw the renault share price fall as much as 20% after we understand the probe has been happening, not sure what is is related to. we have been trying to call the press offices for the carmakers because we are seeing a cell over -- selloff. spokesperson saying that his french offices have not been searched by authorities. difficult to know what it is related to. we spoke to a union leader in france saying he thought it might be linked to emissions. we will try to get to the bottom of this, investors selling off the carmakers just in case. if this willer have an effect on the united states this morning as well as europe. andrew sentance, the turmoil in futures, negative five. i want to talk about the battle between the sentance and recruitment crew -- paul krugman crew. summerslawrence criticizes m