keynes talked, people listened. among them johnson's academic predecessors. >> people working here at m.i.t. the department of economics and in other leading universities became convinced that the government could play a different role and a more helpful role in the economy and supporting the macro economy compared to what the previous orthodoxy had been before the 1930s. >> reporter: but that meant going into more and more debt. that's a good thing then you say? >> it meant being careful with the debt still. it meant that deficit spending was something that could be very useful to you. and when the economy needed some help. >> reporter: very useful and, of course, borrowing proved very necessary when world war ii broke out. total u.s. debt soared to 120% of g.d.p. but after the war, the u.s. economy soared too. by the late 1960s economic growth had wiggled the percentage down near 40% of g.d.p. despite new wars on poverty and vietnam. again, debt had delivered us from evil and it seemed into prosperity. and then ca

it's just the opposite of what keynes argued. >> another question? in the back?hank you, ma'am. >> elizabeth clifford. what do you think -- [inaudible] second volume, what do you think are the circumstances that are required to keep the american exceptionalism a robust idea? >> yes, that's, of course, the question that's before us right now. and it is, um, how much ethnicity, how much national difference, how much diversity do you permit in without destroying the very elements that permit that diversity to come in in the first place in and i think, certainly, english language is one of those things that must be maintained. i think, certainly, having control of your borders is absolutely essential. i think that there are a number of cultural issues that probably have to be maintained, religion and so on. charles murray, not to give another plug to a book on booktv, but charles murray has a great book called "coming apart," and it deals with these very issues. and he shows how segregated our society has become in the last 50 years. not facially, but -- i hate this

john maynard keynes echoed this with his famous observation about how an englishman could order from his doorstep products from far lands and have them -- faraway lands and have them delivered to him. it's kind of an early version of thomas friedman's delve theory which claims that advanced countries that use computers won't go to war together, i call it the starbucks theory. i guess unless they have triple espressos. in a much different way, it was posited that war would be so bloody that no one would dare risk a conflict. all of these views assume that european leaders would be rational, a stretch even in the present day. this, of course, vanished in august 1914. a war sparked by one of the most unlikely of accidents when archduke ferdinand on his way back from a speech turned away from his planned route to visit a guard injured in an earlier, failed assassination attempt. of course, he drove to his death, an incident that would plunge the world into a conflagration. i won't delve into the details of world war i here. perhaps the most significant aspect for the united states was th

we thought keynes was full of himself. we had infrastructure and some infrastructure was taking so long. then world war ii came along and we cranked it up. the depression ended. the recovery is a classic example. what tim is suggesting that maybe that is not so great. maybe if the government stayed away and you hit rock bottom, that would lead to a more vibrant economy at the end of the day. there is an argument about that in guards to the banks. we should not bail out the banks. let them hit rock bottom. weed out the rotting wood. let them clean themselves up. maybe tim is right. maybe those folks are right about the banks. it's a hell of a bet if you're wrong. >> i do not want to spend all night on inflation and how it gets measured, but if you are suspicious of a measure of inflation that counts everything except what you need to stay alive, you are right to be suspicious. inflation in check is the problem. we have had a 11%, since 2007, your dollar now buys 11 cents less than it did in 2007. there has been no growth an

we thought keynes was full of himself.d infrastructure and some makeshift stuff when infrastructure was taking so long. then world war ii came along and we cranked it up. the depression ended. the recovery is a classic example. what tim is suggesting that maybe that is not so great. maybe if the government stayed away and you hit rock bottom, that would lead to a more vibrant economy at the end of the day. there is an argument about that in guards to the banks. we should not bail out the banks. let them hit rock bottom. weed out the rotting wood. let them clean themselves up. maybe tim is right. maybe those folks are right about the banks. it's a hell of a bet if you're wrong. >> i do not want to spend all night on inflation and how it gets measured, but if you are suspicious of how you measure inflation that counts everything except what you need to stay alive. you are right to be suspicious. inflation in check is the problem. we have had a 11%, since 2007, your dollar now buys 11 cents less than it did in 2007. there has

as john maynard keynes said when the facts change, i change my mind. what do you do? the facts have changed. we have been staged on have to ask iran are saudi arabia to send it to us. we have so much natural gas we're talking about exporting at rise in the op-ed describes today that chemical manufacturers 1/2 unattractive back to america up for it it is so cheap rushes it is worried its hold on the eastern european economy will fail because we cannot supply them with natural gas. instead of russia. in this environment subsidizing wind and solar makes no sense. refi china and india and other emerging economies would sign nine so to reduce emissions i don't take a position nine whether man-made emissions cause global warming and i it china and india to make up 37% of the population not doing so. and the first chapter the book i talk about geo engineering solutions win to think we could reduce global temperatures by just came roofs white to reflect the race. what we're doing with a 12 billion-dollar hours it is pushing people into cars they do not want to buy raising you

towards gold by central banks was that it's a relic of the past a barbaric relic of the past to quote keynes and they really were anti gold they're selling goal then the crisis then in two thousand and they start becoming that buyers and i'm told now other repatriating gold central banks like mexico their gold positions up two thousand percent korea's gold position up enormously five hundred tons of gold bought by central banks in the first half of this year another five percent of times bought the second half they seem to go completely against this notion put forth. or by ben bernanke the call is just a trick and people collect it doesn't really matter well you look at what i do not what i say is the answer to that absolutely and in fact actually you can make the argument that central banks now have a double bed in the market because they're bidding for themselves and they're also bidding to to buy physical and always deliver it for these very repatriation requests because you've got to realize that they're not able to on wind the chain of leasing and swapping in order to deliver balls and

as john maynard keynes once said, when the facts change, i change my mind. what do you do? well, the facts have changed. we have inexpensive energy right here without having to ask around saudi arabia to send it to us. we have so much natural gas that now we are talking about exporting liquid natural gas. a single year described in an op-ed in today's "wall street journal" it's so cheap that chemical manufacturers are attracted back to america. it's so cheap that russia is worried his hold on the eastern european economy is going to fail because we cannot supply them at natural gas in southern russia at the initial supply. in this environment, subsidizing wind and solar makes no sense. also five years ago, we thought china and india and other emerging economies might sign on to emissions reduction and therefore if we reduced emissions, perhaps global temperatures would be reduced. i don't take a position on whether man-made emissions cause global warming are not, but if we are reducing emissions in china and india, which make up 37% of the worlds population are not doing so

i think it is killed or asked response to an economic situation and just the opposite of what keynesrgued. >> what do you think addresses the second volume, what are the circumstances required to keep the american exceptionalism, a robust idea? >> yes, that is of course the question before us right now and it is, how much ethnicity, how much national difference, how much diversity do you permit and without destroying the very element that permits that diversity to come in the first-place? i think certainly the english language is one of those things that must be maintained. i think certainly having control of your quarters is absolutely essential. i think that there are a number of cultural issues that probably have to be maintained like religion and so on. charles murray not to give a plug to another book on booktv but charles murray has a great book called coming apart and it deals with these very issues and he shows how segregated our society has become in the last 50 years. not racially, but i hate this word because i'm not a marxist, but class wise and it's very true. i remember

we found we have all this and as john maynard keynes once said when the fact change i change my mind. what do you do? the fact >>>. we have inexpensive energy right here without having to ask iran or saudi arabia to send it over to us. we have so much natural gas that now we are talking about exporting liquid natural gas as daniel juergen described in the wall street journal. it is so cheap that chemical manufacturers are being attracted back to america. it is so cheap that russia is worried it stalled on the eastern european economy is going to fail because we can now supplied them with natural gas instead of russia being a bear sole supplier. subsidizing wind and solar makes no sense. also five years ago we fought that china and india and other emerging economies might sign on to emissions reductions. and therefore that if we reduce emissions perhaps global temperatures would be reduced. i don't take a position on whether man-made emissions cause global warming or not but if we are reducing our emissions and china and india which make up 37% of the world's population are not doing s

john maynard keynes at the precipice in this observation about how the world recite together, hot englishman could order from the store steps product from faraway lands and have them delivered to them. it's kind of an early version of thomas friedman still theory, which claims an advanced country that used computers will go to war with each other. i call it the starbucks theory. any two countries that have starbucks and fight. unless they have triple espressos. another observer, i didn't loss in a much different way posited that we would be so bloody and weaponry so deadly that no one would dare risk a conflict. all of the visas and european leaders of the rational and stretch even in the present day. this of course finished in august 1914, a war sparked by one of the most unlikely of accident when france ferdinand on his way back to his speech in sarajevo turned away from its planned route to the city guard injured in an earlier failed assassination attempt. of course he drove an incident would plunge a world into a nation. i won't tell them the details of world war i. perhaps the most sign

second a more theoretical level, think of this tension as keynes versus hayek and rawls versus nozickpport for government stimulus and expenditures to invest are traditional keynesian. shrink government at all costs was akin to the hands off approach of hayek and the chicago school. rawls view of a government that is concerned about the well-being of the least well-off member of society is akin to obama's interest in a progressive income tax where the wealthier pay more and where ensuring access to healthcare and food stamps for those who are needy is important. romney's statement about the 47%, even if one credits that he is more compassionate than those words might suggest are more akin to the libertarian world of nozick where one eats what one -- and if there are shortfalls, private charity not government should fill the void. when the choice was made, rawls won overs nozick as well he should have. why do i feel so good about the year? there was a discernible clear choice presented to the public. the choice could be seen and understood at many different levels of abstraction from w

long-term, and like it or not, that means planning for your retirement, to misquote john maynard keynes long run, we all retire. i know that may not sound sexy. but trying to put together enough money to become financially independent is really what we do every night on "mad money." you have to contribute to your 401(k) plan if you have one, and you have to contribute to your individual retirement account or ira. that is the conventional wisdom. while it's mostly right, it's not exactly helpful. tonight instead of just telling you to park money in your ira, i'm going to give you suggestions on what stocks to buy with your retirement cash. these are both tax-blessed vehicles. the money in ira or 401(k) comes from pretaxing. even better, while your money stays in these accounts, you pay no profit taxes on your profits, so your investments can compound for years tax-free giving you a much larger return over decades and decades. you only pay when you withdraw it. it's a sweet deal. they do fluctuate over time. they've gone up and down throughout my trading career. however, as much as i like