let me start with what paul krugman wrote in the new york times march 14th.veryone thinks china is a big trade partner of the u.s., holds the u.s. over a barrel because if it decides to sell u.s. currency, it will make the u.s. dollar drop and everything will go bad. paul says, if china dumped the u.s. assets the value of the dollar would fall against other kou currencies like the euro but that would make our goods more competitive and reduce our trade deficit. on the other hand, it would be bad for china which would suffer large losses on the dollar holdings. in short, right now america has china over a barrel, not the other way around. david, i know you both have something to say about this. david? >> well, it's very counterintuitive, isn't it? >> yeah. >> that the world's largest borrower has its biggest creditor over a barrel. most of the world doesn't see reality in that way. paul's views drew a sharp rebuke from a leading kmits at morgan stanley, steven roach, who worked a lot on asian issues. we are clearly in the midst of a serious debate at home abou

. >> rose: some argue that we should have had a much larger stimulus-- paul krugman for example.'re in the same camp. >> that's right. that's one of the points i said in "freefall." and even the president's chairman of the council of economic advisors is said to have.... >> rose: steve roamer. >> he said we need $1.2 trillion. and what we've seen since then has been very clear they were optimistic about where we were going. and it's a really important point here. the stimulus has worked. and a lot of people have looked and saidnemployment has gone up and that proves the stimulus hasn't worked. no, the stimulus worked. if we hadn't had had had the stimulus we would have had 12% unemployment instead of 10%. >> rose: they argue you could have designed a better stimulus. >> that's right. again, something i say in my book we clearly could have done it. the big mistake we made was the tax cut. we knew from the experiment we did in february, 2008, the bush tax cut, with the overhang of debt and with the uncertainty in the job market people would save a large fraction. makes them feel go

for anybody who was worried, that is my last reference to paul krugman this morning. [laughter] there are two issues that are being buried here, and they are both important. one is productivity, and the other is competitiveness in the sense of winning competitions. in action that improves productivity, it helps raise output and living standards. that is a good thing, and it tends to show up and leads us to rank countries by various things. productivity growth, living standards. but you are competing only in the sense of serving as a point of reference. that is not necessarily what economists think of as competition. there was a very high profile study by the world economic forum really focused only on productivity when they think about competitiveness. indeed, the world economic forum and economists consulted define competitiveness as the institutions, policies, and factors that determine the level of productivity in our country. it takes one piece of what i said, productivity, without reference to the ability to win a competition. one could say that there is not nece

if paul krugman takes him on, he is courageous.r has a segment keeping them honest, he is courageous. all of a sudden i'm an obama critic. it is specious and has racist undertones. >> it is concern to the congressional black caucus that the president has not focused on african-americans. some people took him to task. robert gibbs defended him saying the president was a member of the congressional black caucus and he has to run the entire country but he is focused on issues important to african-americans. what do you say to that? >> it is not a personal thing about what the president's say is. it is a question of looking at his policies and see if they tilt toward the strong or tilt toward the week. what brother tavis is saying is we have to bear witness to ensure that the weak, the most vulnerable are not being rendered invisible no matter who the president is, no matter who the governor is, no matter who the mayor is. >> ultimately, i want folk to understand you are the leader you've been looking for. during the obama campaign, th

if paul krugman takes him on on health care, he's courageous.r has a segment every night "keeping them honest," he's courageous. but when tavis smiley suggests holding the president accountable then all of a sudden i'm labeled an obama critic. that argument is specious, number one, and quite frankly has some racist undertones to it. >> it has been a criticism of the congressional black caucus that the president has not focused on issues that are important to african-americans, professor west, dr. west. and some people took him to task. robert gibbs defended him just a couple weeks ago, saying that the president was a member of the congressional black caucus and that he has to run the entire country but he is focused on issues that are important to african-americans. what do you say to that? >> i think the question is, again, it's not a personal thing about what the president says. it's a question of looking at his policies and seeing whether they tilt toward the strong or whether they tilt toward the weak. and what brother tavis is saying is tha

paul krugman, who is a nobel prize-winning economist, wrote in july of 2008 about his concern at the very inception of this economic crisis that we were moving toward a tendency in this country to socialize risk and to individualize reward. in other words, whenever we create a situation where there is an economic challenge, the american taxpayers at large were expected to absorb the risk. but then when the reward comes in, only the executives, the people who were managing the financial system were able to actually get the rewards. this particular reward in this one-shot tax proposal has come about largely as the result of government intervention as the result of working people in this country having to put their money forward in order to bail out a financial system that had gone wrong. and as a result, i just believe as a matter of equity the reward should be shared with the taxpayers who made it possible. for those of us who had to vote on the tarp program on october 1 of 2008, i think it was a very difficult vote and it was a very defining moment here in the senate. and we need to

nobel laureate paul krugman agrees that there's no reason to believe that c.b.o.' estimates are too pessimistic. there are many cost-saving estimates in the proposed reform, he says, bny well one oe efforts will work. and as a result, he continues, "official estimates don't give the plan much credit for any of them. realistically, though, health reform is likely to do much better at controlling costs than any of the official projections suggest." recently, three more respected health economists -- len nichols of george mason, ken thorpe of emory, and ben gore of stanford -- called the price controls vital, a significant improvement on the status quo. as professor thorpe neatly described it, "under the do-nothing scenario, everything gets worse." and m.i.t. professor jonathan gruber, one of our leading health economist, said of this bill's cost-control measures, "i can't think of a thing to try that they didn't try." may i ask consent for an additional minute. the presiding officer: is there objection? so ordered. mr. whitehouse: i can't think of a thi to try that t

debated, i think john mccain and lindsey graham said they would go for a $450 billion stimulus and paul krugman in "the new york times" wrote and said it needs to be much larger and they settled at a number kind of in the middle. is there any kind of formula for how much you borrow when you have bad unemployment above which then it starts to drag down what you're trying to do because the debt is too big? is there a handy way for a layman to look at ha. >> oh, sure. oh, sure, and we're nowhere near it because the fear in excessive borrowing is that it will drive interest rates up and choke off investment, consumer demand and the economy as a whole. that has been, of course, totally countered by fed policy and interest rates are essentially zero. so we're a long way from where fiscal spending would crowd out private -- the private sector or hurt the economy in anything like the short run. that's aside from building up a further fiscal difficulty for the long run. but in terms of the short run, we could have had five times, i suspect five times the fiscal package and not have pushed interest rates