now paul krugman says we need more stimulus. the problem is never that the first crazy idea was a crazy idea. we have not done enough of a crazy idea. it is never lets reverse course and do something else. we do exactly what japan did all through the 90s and they continue to do and they just contracted their economy on an annualized rate. what you might hear for haiti or something but that is japan after following the advice of these geniuses who claim they didn't follow our advice. they did everything -- this is what they have to show for it. basically zero. in terms of fiscal stimulus, it diverts resources. where are the resources coming from? it takes them from the private sector. the sophisticates will come back with these resources are idle. they are not doing anything anyway so it is okay if we put them back in production. that would be the case perhaps if you could devise stimulus packages that would only make use of precisely the resources that are currently idle but they are not doing that. they're coming up with arbitr

we are told it's going to make us rich and so paul krugman he who shall not be named, paul krugman says we need more stimulus and notice the problem is never the first crazy idea was a crazy idea that we haven't done enough of the crazy ideas. it is never let's reverse course. no, no. we need to do more to read we can do exactly what japan did exactly what they did for the 90's and continue to do and now they just contracted their economy contracted an annualized rate of 15% which you might expect to hear from haiti but that's japan after following the advice of these geniuses who try to claim no, no they didn't follow our advice precisely they were off by three tenths of a percent. they did everything the team seems wanted them to do and this is what they have to show for it is basically a big zero. but in terms of the fiscal stimulus it diverts resources because we are there resources coming for these projects. it takes them away from the private sector. now the sophisticated kinsey ins will come back with these resources are idle, they are not doing anything any way so it is okay if

after march of this year, barney frank and paul krugman four and a dialogue at the kennedy library in each person's opening statement was quote, i didn't see this coming which is something to conjure with. i asked mr. frank of he could run the tape, what would he have had in place and he said well we didn't have the ability to regulate the things that by the rye and costello this. no, well those things which were lacking for mr. franks observation, will they be forthcoming? >> to some extent. i think what he is referring to probably wear various things which were in in place, which franks legislation in the obama legislation to put in place, the ability to wind down big banks, the fdic didn't really have their big commercial banks that could do it but lehman brothers or goldman sachs or morgan stanley. no, there were various one so they didn't have that capacity. that is why have they had to bail them out. there was a special bankruptcy, a government controlled bankruptcy. in terms of regulatory oversight you are right there were large elements in the financial system outside of the r

and on paul solman's "making sense" page, nobel prize-winning economist paul krugman weighs in on howthe u.s. should approach financial reform. all that and more is on our web site, newshour.pbs.org. jeff? >> brown: and that's the newshour for tonight. i'm jeffrey brown. >> suarez: and i'm ray suarez. we'll see you online, and again here tomorrow evening. 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 if that energy came from an energy company? every day, 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. and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadc

. >> reporter: paul krugman is typically pessimistic, as well. >> who's going to want to expand? who's going to want to build an office building when we've got record vacancy rates? who's going to want to build a factory when we've got near- record excess capacity in industry and down the line? so why would you expect hiring in this environment? >> reporter: now, there were economists here who saw light at the end of the tunnel. northwestern's robert gordon. >> there's reason to hope that unemployment is going to come down substantially in 2010. first, all the outlook for g.d.p., the total amount of production, is for it to increase about twice as fast as it did back in 2002 during the previous recovery. the second reason is that we can't produce more with ever fewer people unless we have a gigantic boom in productivity. >> reporter: meaning more output per person. suddenly, we were just much more efficient. >> productivity always grows rapidly at the beginning of the recovery because firms are still cutting costs as output recovers. and eventually they realize, "ah. output is re

announced in may of 2009 was the banks would not be able to raise private sector capital in fact paul krugmanwrote in less than seven columns proposing we nationalize some of the bank's. since the stress tests were released, banks have raised the total of $150 billion in equity and issued over $64 billion in guaranteed debt. if you look at this chart shows month by month the net issuance of common equity by banks call and you can see that in the second quarter when the stress tests were released we see the reversal here from declining equity which means buybacks to issuance of capital. this next chart shows you the capitol levels of banks, the ratio of tangible common equity to assets for the stress tested banks the 19 largest banks that went through the stress test the account for two-thirds of all lending in the u.s. and you can see a sudden reversal in the level of capital in the bank's. and it was a rather dramatic turnaround. you could also see this looking at the credit-default swaps for banks. the cds spreads are an indication of the likely the banks will default. this looks of the l

announced in may of 2009 was the banks would not be able to raise private sector capital in fact paul krugman wrote in less than seven columns proposing we nationalize some of the bank's. since the stress tests were released, banks have raised the total of $150 billion in equity and issued over $64 billion in guaranteed debt. if you look at this chart shows month by month the net issuance of common equity by banks call and you can see that in the second quarter when the stress tests were released we see the reversal here from declining equity which means buybacks to issuance of capital. this next chart shows you the capitol levels of banks, the ratio of tangible common equity to assets for the stress tested banks the 19 largest banks that went through the stress test the account for two-thirds of all lending in the u.s. and you can see a sudden reversal in the level of capital in the bank's. and it was a rather dramatic turnaround. you could also see this looking at the credit-default swaps for banks. the cds spreads are an indication of the likely the banks will default. this looks of the

and he interviewed a few years ago a couple of years ago, paug paul krugman and paul krugman said the following about ezra. "ezra is very, very good and very, very young. because when ezra interviewed him in a restaurant, he was carded. >> that was -- paul was jealous about that. i should say. >> and i think that -- ezra is actually even prouder that -- that quite recently a fellow by the name of rush limbaugh called him a rising star. i don't know how to take that accolade. >> what came after that was less complimentry. you'll never see the rest of the sentence on the back of my book, don't worry. >> next. seated to my immediate right, is susan denser. susan is the editor and chief of health affairs, the nation's leading journal of health policy. she's been for quite a while the on-air analysts on health issues and "the newshour with jim lehrer"er on pbs. and she's formally the chief economics correspondent and economic columnist for "u.s. news and world report." and she's been a senior writer covering business for newsweek. and for work on television, included appearances as a regul

"new york times" refused to review it, however they will still impose paul krugman every week. that, we are not going to be scared. we are going to get him but no dissent is a "new york times" but on the other hand i think we all know about the financial picture "the new york times" is facing so i tend to think it doesn't want to promote a book that argues against bailouts. given what the media is going to be demanding in the near future. let's not talk about that particular depressing subject and in fact i hope i'm not going to depress you today because i'm going to leave you with a suggestion there is a way out of this and whether or not they are going to follow it is another question that it's comforting to know if we wanted to get out of this economic mess we could do it. it's not impossible. it could be done. i'm not going to talk about some of the things you would likely encounter if you turn on right-wing radio where you would hear a lot of denunciations of the community reinvestment act that introduced affirmative action in lending or fannie mae and freddie mac was irre

[laughter] leaving aside the current -- i'm very much in the camp of people like janet and paul krugman and marty bell steen, expect a recovery to be extremely subdued. and i can be talking about this at the u.s. level and at the global level. i would be rather concerned in policy-making circles it i saw with the massive stimulus we've had a in places in the u.s. economy and fiscal stimulus that's unprecedented in monetary ease that we only managed to reach 2.2% growth in the third quarter of the year purpose some of the big questions are arising, what happens when the fiscal stimulus fades as was costing less will certainly fade and the second half of 2010. and the real risk that we do get a double-dip recession as that paid. of the reason i say that is there are extraordinarily strong headwinds against u.s. economic recovery right now. now the most notable of those headwinds is the situation in the labor market. not only do we have 10% points of americans out of work, but if you include those who are working part-time on an involuntary basis and thus discourage, if you look at the lab

paul krugman in the washington times -- >> washington times, wow. >> pardon me. are you pardoning paul or the washington times? >> i am wondering, if the criticism thus far has been the president has not stepped in in a timely way and twisted arms or whatever people want a president to do, now more than ever would be the time, would it not, for the president to show them the record? with the way forward will be determined by the president, by members of congress, by democrats and republicans that are interested in getting this done. i think lots of those conversations are ongoing about how best proceed, including involving the president. but the president said that it is time to coalesce around the core elements of the package. for what would be the non-core elements that were being discussed? >> i think there were ideas that were different in one bill, there were ideas that were different in the house bill than from the senate bill and the senate bill from the house bill, that as a result of negotiations might not ultimately come through in a package -- >> becaus

going on here, and i noted over the past year there are many prominent liberal commentators from paul krugmanto frank rich in "the new york times" who talked about the rights in st. rage, these are the phrases they use, in st. rage. but every one of these tea party protests, downhaul protests have been peaceful until the introduction of these astroturf leftist groups like the s. clu, notorious incident earlier this summer where a black man who was selling don't tread on me flags was beaten by scu agitators. so who is showing the in san rage here? and i think is interesting because of the tea party movement is doing now is showing the fissures between the national gop establishment in the grassroots conservatives and independence. it is a complete myth this is some sort of top-down control movement because it was you wouldn't have seen the incredible outbreak of outrage in the new york 23rd special election where the gop establishment sided with this radical leftist candidate and tea party types locally and conservatives nationally held the gop's feet to the fire. >> host: next call comes from

on here and i noted over the past year that there are many prominent liberal commentators from paul krugman to frank rich in the new york times who have talked about the wright's in same rage that each and every one of these tea party protests had been peaceful until reintroduction of these leftist groups, notorious incidents earlier this summer, where a black man who was selling don't tread on me flags was eaten by fdr you agitator's. who is selling the insane range here? it is interesting because what the tee party movement is doing now is showing the fissures between the national gop establishment and these grassroots conservatives and independents. it is a myth that this is somehow top-down control movement because it was you wouldn't have seen the incredible outbreak of outrage in the twenty-third special elections where the gop establishment sided with this radical left-wing candidate and tea party types locally and conservatives nationally held the gop's feet to the fire. >> next call from hope sound, florida. dave. >> caller: as always thank you for c-span. first an observation. one

paul krugman and others have proposed this is something that all financial markets across the world do hedge risk. do you think this is a prudent thing to do right now? and what do you think of the future of the tobin tax? >> good idea and will it happen? >> let me say this. the tobin tax has a lot of commonality of the loch ness monster. just when you think the proposal has disappeared, it raises the head. and these proposals have been batting around for a long time. and one of the things for a tobin tax to work it has to be globally orchestrated or it will only create diversion from one market to another. and it is difficult to actually see the political wherewithal, especially in the u.s. and u.k. hose two derive more of their income from the financial industry than the rest of europe or other countries. so that getting agreement on something on the scale of a global tobin tax, i don't attach a lot of feasibility. i will conclude my remark by saying that, yes, it was the case, no doubt, that in the post-world war ii period where we had fewer financial crises you had a highly regulat

as a consumer, being able to read paul krugman or simon johnson or having those voices of people who want to analyze things or study what they are thinking or willing to do it free on the side to keep auriana huffington happy is a good thing, but a lot of us really think it is important for society that there be people out there who are paid to find out the facts, who are not doing this on the side, who are not being paid to do something else than to do this to build their names, but are paid to go out and do the hard reporting it takes to find out what is really going on, and that is going to be the challenge for the next 10 years, coming up with business models that enable organizations to support a large group of reporters. >> isn't part of the problem that most people do not understand or certainly do not celebrate journalism. now they are one. just about everyone decides he can become a journalist, and journalism itself is dying. i mean the person -- your mother says she loves you. check it out. that seems to be dying. >> there are lots of good journalists out there eager to wor

[laughter] i am very much in the camp of paul krugman, marty feldstein come expecting the recovery to extremely subdued. and i can be talking about this both at the u.s. level and at the global level. i would be rather concerned in policymaking circles if i saw with the massive stimulus that we've had, you know, for instance in the u.s. economy but is go stimulus that's unprecedented monetary ease though we managed to register something like 2.2% growth in the third quarter of the year. you know, the big question arises, what happens when the fiscal stimulus fades as the fiscal stimulus certainly will fade in the second half of 2010? and there really is a real risk that we do get a double dip recession as that faith. another reason i say that is there are extraordinarily strong head winds against u.s. economic recovery right now. the most notable of those headwinds is the situation in the labor market. not only do we have 10% interest point of americans out of work, but if you and those who are working part-time and on an involuntary basis in those discouraged. if you look at the labo