wondering whether china will or can come to russia's rescue, to answer that "new york times" columnist paul krugmanilt up that big war chest of 600 odd billion dollars in foreign exchange reserves. was the freezing of those foreign exchange reserves the kind of central reason why russia seems to be so badly battered by their sanctions. >> well, it's part of t i mean, i think that putin had no idea what kinds of sanctions he was going to be facing. he thought maybe it would -- you know, a few exports would be restricted, not that russia would be shut out completely from the world financial system, which is pretty much what's happened. and when you do that the fact that you have, you know, reserves which are mostly just deposits in banks overseas doesn't do you a bit of good, they are all frozen. the rest of the reserves is largely gold bars sitting in russia which are also actually not really useful for global commerce. i think putin just had a completely false idea of what kind of economic regime he was going to face. >> but what about the oil and gas revenues? those seems to continue uninterrupted

and paul krugman on whether china can or will save russia's economy. but first, here is my take, russia's invasion of ukraine is a seismic event, perhaps the most significant one in international life since the fall of the berlin wall. this war marks the end of an age but what can we say about the new one we are entering? most important, it is marked by the triumph of politics over economics. for the past three decades most countries have acted with one lone star in mind, economic growth. they have embraced trade, technology and domestic reforms all to produce more growth. those kinds of choices are possible in an atmosphere in which one does not have to worry that much about the core issue of national security. but today countries around the world that took security for granted, from canada to germany to japan, are thinking anew about their defense posture and forces. military security is only one part of the way in which politics is trumping economics. countries are searching for greater national security in their supply chains and economies more bro

they might take their classes from paul krugman, in which case they would be even more effective liarss. we want people like representative jayapal to say stupid, stupid things like that tweet so that we can mock her on shows like this. please don't train her to be a better liar. charles: so it is not just the socialist lawmakers though, right? a lot of mistakes have been made. the federal reserve their economic model ignores supply side, focused solely on demand and of course that is one of the reasons they got the whole transitory thing wrong. now only now, a majority of money managers around the world see inflation as permanent rather than transitory. so what is up with that, with all the experts getting it wrong as well? >> well, mostly the federal reserve gets it wrong but the majority of money managers, they always get it wrong. so we're just going to have to think for ourselves here. doesn't matter what other people think. right now we've got a situation where we've got a war in ukraine that is stressing energy markets and food markets. two years ago we had a global economic loc

i saw an amazing quote from paul krugman the other day from the 1990's where he said a quick and teacher undergraduates to win -- when somebody talk about competitiveness, we will have done our nation a great service. that's been the prevailing opinion for for a long time. so for me the use of the term competitiveness should imply a kind of realistic admission about the way the world works. once we admit that, once we admit as senator young mentioned that we really are and in economic and geopolitical competition with china, for example, then that lets us ask all the other questions we need to ask which is what this discussion is about. what industries matters and why, why does it matter where production happens, how does innovation actually work? and all the other things we need to ask and answer to secure our national security and supply chains and economic resilience. >> thanks, chris. both you and maryann have referred to this intellectual history and what's changed. and how we used to think about competitiveness in the '90s and that something is changed. we're thinking about it diff

paul krugman in "the new york times" today writes about america's very peculiar economic funk.. that is accurate, but professor krugman doesn't understand why. finish let me lay it out for you. working people buy basics -- gas, food, electricity -- and when prices skyrocket, they feel it directly every day. and they're not happy. that's your constituency, not happy. eight months til the elections, and i don't think you know what to do about it. third hour of "varney" starts now. ♪ stuart: steve hilton, california guy, with us now. i believe the price of regular gas in california now averages $5.07, and our viewers are sending in pictures of gas where they live, the price. okay, that's from -- what have we got there, can't see that. that's $5.09 in san jose. it's $4.29 in phoenix. i know that that's not california. it's $3.99 in jersey, right by me, so i know that's not in california. but, steve, what do californians think about $5 a gallon gasoline? [laughter] >> well, i can tell you what this californian -- [laughter] feels about out, because i filled up yesterday. we're very