after this break, steve forbes, president and ceo of "forbes." joining us from new york city to talk about the economy and the cbo figures. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] [bells tolling] >> notice the color of the bourbon, the pretty amber color that you see is all coming from of the charge on the inside of the barrel. this char is where bourbon gets a lot of its color and a lot of its flavor. currently they discovered over 200 chemical flavor is just in the oak and the char from the barrels. >> this weekend we highlight frankfort, kentucky, on the book tv and american history tv. throughout the weekend looked at the history and literary life of kentucky's state capital. on the book tv on c-span2 -- vice, violence, corruption, urban renewal, on the crawfish bottom. and the life of the ninth kentucky calvary soldier john porter. and on american history tv on c- 3, a visit to buffalo trace distillery, only four in operation during prohibition --

summers, and steve forbes. and then washington from afar with california governor, jerry brown. >> the washington of today is suffering and experiencing a crisis. >> and then plus, retired admiral, mike mcconnell, on the looming dangers of international cyber attacks. i am candy crowley, and this is state of the union. a better than expected jobs report was the only upbeat economic note this week, and it was downgraded. that's the first time that ever happened. >> it's a matter of the medium and long-term budget position of the united states that needs to be brought under control, not the immediate fiscal position, it's the one that centers on entitlements and its entitlement

host: on the screen is steve forbes, president and ceo of " forbes." two-time candidate for president. the headline out washington -- deficit hole will remain gaping, according to the cbo. what do you make on the latest news on the economy? guest: well, it is obviously disappointing. i think the u.s. economy is doing better than expected in the second half. not quite as pessimistic as others. steel orders are up, rail traffic is up and durable goods orders are up -- that news came out yesterday. equivalent to an automobile, 10 miles an hour in the first half and now going about 30 or 35 miles in the second half when we should be on an open highway doing 70 or 75 miles an hour. we are moving but at a very glacial pace given the severity of a recession. usually out of a sharp downturn we get a sharp upturn. we have not had that here. host: unemployment is going to be -- remain up according to doug elmendorf. how important are the unemployment statement and figures? guest: there will be job creation of unemployment and under-and plan it will remain severe

revenues to match the entitlements. >> we have treasury secretary under president lynn clinton, and steve forbes, the president and ceo of forbes ing, and a former presidential candidate. thank you both. i cannot think of two men better to try and explain to me what to make of the downgrading of the u.s. government's credit rating. let's start with you, steve. >> i think in a narrow sense, it's a political move, and i think it will sound strange for me to say an outrageous move. the government is legally aub lay gatd to pay its debts, and a larger sense about the economy, i think the u.s. economy is in a paralus state. i am surprised s&p would play politics, and the u.s. government can pay the interest and principle on the bounds, but we do have severe economic troubles but will be able to pay the interest and the principle on the bounds. >> larry, i will have to believe you will agree with him, because i hushd this weekend from a number of administrative officials pushing back hard against this, and talking about how immaturish it was talking about how s&p was looking for its 15 minutes of fame

in our new york bureau, steve forbes, the president and ceo of forbes, inc., and a former presidential candidate. gentlemen, thank you both. i cannot think of two men better to try and explain to me what to make of the downgrading of the u.s. government's credit rating. let's start with you, steve. >> i think in a narrow sense, it's a political move, and i think it will sound strange for me to say an outrageous move. the government can't pay its debts. it's legally obligated to do so. it's got the wherewithal to do it. in a larger sense about the economy, i think the u.s. economy is in a perilous state. this country has been in its worst recession since the great depression. i am surprised s&p would play politics, and the u.s. government can pay the interest and principle on the bonds, but we do have severe economic troubles but will be able to pay the interest and the principle on the bonds. >> larry, i will have to believe you will agree with him, because i learned this weekend from a number of administrative officials pushing back hard against this, and talking about how immaturish

style vote because i'm rich, you can be rich too. >> steve forbes did so well, though. president forbes, no. i think that only takes you so far, but that is an odd phrasing, isn't, inadequate to his needs as if of course we all need more than a 3,000 square foot sea front mansion, we all need more than that. >> how do you think that a line like that -- you're from orangeburg, south carolina, how is the full thurston going to play in south carolina? if this is deliberate and this isn't just sort of gaffe -- a multiplied gaffe now compounded by the campaign, if they are really doing this, can you imagine, he's going to have to deal with the south carolina electorate sooner rather than later. >> he is, i don't think it will play particularly well in south carolina and he has to deal with that electorate. he's not going to win iowa, he's going to perhaps win new hampshire, then you get to south carolina which has a record of choosing the eventual nominee, he does well there, and the heavily republican sort of rock-ribbed parts of the state, they don't have even 3,000 square

. >> let me bring in steve forbes who is editor and chief of "forbes", and good to see you, steve. are you seeing assurance in the numbers or what are you making to the markets? >> after falling 1,130 points in the last three trading days it is nice to see recapture 186 points from the loss. the key thing from washington, you will have to see a big change of policy either on the stop the weak dollar policy or a serious effort to fundamentally simplify the tax code and one of those two initiatives would be good for the markets, but i don't see that happening quite yet. >> let's talk about what is good for the markets and the economy overall, because there is a couple themes i have heard over and over as i watched the pundits over the last 24 hours, steve. calling congress back and you heard john say that one high level democrat thought that would be highly productive, and the second is that the president should come forward with a specific plan whether it is what you have suggested or something to really start to move the economy. does he have that kind of power? >> well, unfortunat

then 99, steve forbes came in and george w. bush and they had an arms race. spent millions. and over 20,000 people showed up. how many people do you think will show up to the straw poll? >> i think between 10,000 and 20,000 will participate. >> that's 20% of maybe the entire turnout for the caucuses. >> exactly. that would be the second largest turnout in history if it were, say, over 12,000. i think that could happen, even though they're not spending as much money, and you don't have romney and you don't have governor perry on the ballot. so despite that, i think there is a lot of interest. and i think people are really upset about what's going on in this country. the huge debt that we have and the fact that we have over 9% unemployment. iowans don't like debt. they elected me as governor. i defeated an incumbent who put the state deep in debt. and iowans want us to get our fiscal house in order. we have done that at the state level. the federal government needs to do that. we need to focus on jobs. that's why i think you hear republicans focusing on what they have done to

. >>> joining is steve forbes, chairman and executive editor of forbes media and also a presidential candidate. we heard from art he doesn't think this is 2008 over again. what do you think? >> it's not 2008 but a short-term series crisis. a concern about the value of the drar. fed made it clear they will knock the dollar down again and concern that the europeans are not dealing with their sovereign debt crises, not to mention their banks. 20 years ago we had a severe crisis with latin american debt which could have brought our system down. dealt with each country and how do you turn this thing around and restructure their debt and put in policies that got these countries growing again. the europeans are not doing it and people fear the drift. >> people remember the 2008 crisis. that one was about debt as well. another thing art mentioned is the markets were spooked yesterday and you mentioned this as well by the fear that the european bank could go the same way as a bear stearns or a lehman brothers did here in the united states. do you think that will happen? >> i think short term

yes, steve forbes made a very succinct statement. and he's exactly right.ow the tricks that the federal reserve is up to, in their toolbox. my thing about inflation, we know inflation is going on out there in real america. you know, crisis of lumber, hardware, your grocery store and so forth. but what i want in particular is -- so what if we have a little deflation? so what if the dollar is strengthened? and now people go to work. they're more apt to save and put money in the bank. think about putting money in the bank today. you're getting a negative return on your principle. so you really -- you know, that's for each and every american by the hands of the federal chairman. he knows we're getting a negative return rate on our savings. and yet he's on this, you know, dropping more and more money into the economy. and like steve forbes says, helicopter ben. print more money. host: patrick in charlotte. guest: again, if the economy were to slip into deflation if chairman bernanke has made it his life cause, almost, to make sure that deflation doesn't happen i

let's look at what steve forbes, made -- look at a common steve forbes made on -- comment steve forbese on "washington journal." >> $1.80 trillion a year. 15 billion, take it. be grateful for it. there are massive regulations already coming. on the data franc bill, thousands of pages of regulations in the pipeline on that. same thing with the health care bill. while they make a few reforms on regulations. for each one they get rid of, there are hundreds that are coming our way. host: talking about the efforts of the obama administration to eliminate or ease regulations. he says they do not go far enough. guest: there is a lot of misinformation out there. steve forbes leading talking point was one of the biggest pieces of misinformation out there. he says regulations cost our economy $1.50 trillion a year. i regret even having to repeat that to make a point. it is such a gross distortion. a very common talking point on capitol hill. it is said uniformly among republicans. everybody knows better, because groups like mine and others and the obama administration have countered it and made

. >>> coming up, steve forbes on the volatile stock market and what needs to be done to get the u.s.on track. >>> plus the latest on the capture of the dougherty gang in colorado. >>> and in these tough economic times a break from reality, a look at why hollywood may be recession-proof. >>> that's the "cbs morning news" for this thursday. thanks for watching. i'm randall pinkston. make it a great day. -- captions by vitac -- www.vitac.com -- captions by vitac -- www.vitac.com

bring in steve forbes. thank you for joining us today. what is your reaction?terms of the u.s. treasure market it is not going have a huge reaction. s&p is playing politics with this thing. the u.s. can pay its interest and can pay the principle. the u.s. economy is a different matter. but the ability of the u.s. to service its government debts that is not in question. to put us below france and the uk and some of the other countries is prepostorrous. that is why you did not get a panic in the bond market when this thing became apparent last week. it has political ramifications but that is about the economy, not about the ability of the u.s. to service its debts. >> shannon: we saw in the market in tel aviv a 7 point drop there. certainly one of the first markets to see action after the downgrade. what do you think will happen when wall street is back in action? >> well, there will be a considerable volatility because the fear is not about so much s&p but if one of the other major agencies downgrades the u.s. that is going to have an impact on u.s. financial co

in a tie for fourth thirty five or woods also spoke in a split last month with longtime caddie steve forbes. i thought it was time for a change. i thought you know stephen i've had just an amazing run i mean just to be the healthcare it is there's no denying my career and i think i've helped as well and we've been i think we've had a great partnership a lot for well viewers it will but we're not but a bunch of termites but i just felt i was trying to change things up well but. words will be welcomed back into the gulf in the world by an old friend darren clarke paired with sports first dollar billion are for the first two rounds of the bridgestone invitational twenty eleven british open winner car quick to point out the similarities between the two a similar bill similar color similar structure. i don't know we just where he sort of got my sense of humor and i got his. you know it was all those years ago were. first together in the sixty's living in the open there right where he was that we were. with the time go with which we spent a bit of time together in vegas. you know are just you sor

. >> reporter: one remedy championed by steve forbes in his run for the presidencyn 1996 is a flat tax -- 17% across the board, scrapping the current complicated and loophole-laden irs code. the flat tax may have antecedents in the religious tradition of tithing, where each person gives the same percentage regardless of income. >> well, i think a flat tax would for sure be more efficient, and i think the strongest argument in favor of a flat tax is the efficiency. >> reporter: many economists, like harvard's greg mankiw, say the government should rely less on taxing income and more on a value-added tax on consumer goods, a form of flat tax found in much of europe. >> a consumption tax rather than an income tax. it doesn't tax savings. if i earn money and put it in the bank it doesn't get taxed until i take it out and spend it on something i buy. consumption is you're enjoying and also saving is a part of economic growth. if we exempt saving until later consumed it will promote economic growth. there's a strong case to be made for using consumption for the basis of consun shom. >> repor

i stel steve forbes a flat tax proposal he made a couple dec e decades ago is the way to go. everybody is paying the same rate, get rid of the deductions and have these politicians working on bigger issues than our taxes. >> bob, nice to see you. don peebles, peebles corporation, diane, thank you so much, everybody. >> find out what has matt damon fired up that he's heading from the movie set to washington to march side by side with pretty angry teachers. unless you want . new splenda® essentials™ no calorie sweetener with b vitamins, the first and only one to help support a healthy metabolism. three smart new ways to sweeten. same great taste. new splenda® essentials™. vietnam, 1967. i got mine in iraq, 2003. u.s.a.a. auto insurance is often handed down from generation to generation, because it offers a superior level of protection and because u.s.a.a.'s commitment to serve the military, veterans, and their families is without equal. begin your legacy. get an auto insurance quote. u.s.a.a. we know what it means to serve. and started earning loads of points. you got a weather

country last year to meet up to decide how to sell off your state assets that's the point of having steve forbes of the international chamber of commerce having a meeting over there at the hotel brittania a couple of months ago to decide how to sell your state assets that's what happens when you lose your sovereignty that's what happens when you sell your soul to the devil that's what happens if you let the i.m.f. india home if you ever see a banker on an airplane report of the middle of the pilot it's a dangerous situation don't let bankers on airplanes they're going to countries and they're going to blow those countries up with weapons of mass financial destruction no papers on airplanes if you see a paper on an airplane report it immediately to the t.s.a. i gave thanks i have a story about bankers the last headline here goldman sachs traders with big bonuses drying up so more than a dozen traders according to this article have quit goldman sachs's north american government bonds and derivatives trading desk in new york in recent months as the bank takes fewer risks and big bonuses for and thi

the s&p downgrade, you will talk about this with steve forbes, right? you know is ahead of forbes inc., and we will talk to larry summers who used to be the top economic adviser for president obama, and ask them what it all means. over the weekend i spoke to a couple of folks at the white house and they are angry at s&p. i mean, it is -- it's quite obvious. they think in the administration that s&p did this to make a name for itself, to get itself in the headlines. you hear terms like getting their 15 minutes of fame. it's a vanity walk. we will bring these two guys in and say what does it mean, and what do you think is behind it. what does it mean to you and me and the markets, and that kind of thing. we also talked to california governor, jerry brown, because he has a state hard to wrestle to the ground, and we'll get his perspective on washington that is really interesting, and we will talk about the cyber space attacks and the idea that you china, perhaps, has been hacking into u.s. government systems as well as into the big systems of corporations,

steve forbes, chairman and editor in chief of forbes media joins me now. hi steve. >> good to be with you alisyn, how are you? >> alisyn: i'm okay, i'm trying to hold on for this wild ride, because yesterday obviously the dow went down 520 points, but the day before it had this 600-point rally. what is going on with the market? >> well, what's going on is reflecting the sheer absolute uncertainty about what's happening to the economy, what the europeans are doing about sovereign debt, the health of their own banks, and the federal reserve making it clear they're going to continue to trash the dollar. what you -- when you have that you get a flight to commodities like gold and you have people sitting on the sidelines and markets go down when people don't know what lies ahead or feel they don't know what lies ahead. >> it's up 114 as you speak. that's headed in the right direction. what can the fed do in the next week or months to help turn this around? >> do what it should have done in the first place and that is a strong and stable dollar policy instead of

steve forbes, chairman and editor in chief of forbes media, joins us. steve, why is this happening? >> well, what's happening is you have a combination of the baby boomers who obviously have more disabilities, you also have a weak economy, people get laid off or injured, so instead of waiting a few years to go to regular social security, they apply for disability. now, it's not easy to get these benefits. sometimes you have to wait upwards of two years or more. but the backlog is being reduced, more people are getting them, so the system is in crisis. >> gregg: i was reading the comments of a couple of congressmen the other day who said well, what we can do is we can just shift the money from the retirement fund into the disability fund. does that strike you as just kind of sticking a finger in the dike? >> that underlines something that's been ignored is there's no money in the fund. they have $2.6 trillion, but they are in nonmarketable ious from the treasury department so they've got to convert those into marketable bonds and have the treasury raise cash and the sooner they do it

yes, steve forbes made a very succinct statement. and he's exactly right.know the tricks that the federal reserve is up to, in their toolbox. my thing about inflation, we know inflation is going on out there in real america. you know, crisis of lumber, hardware, your grocery store and so forth. but what i want in particular is -- so what if we have a little deflation? so what if the dollar is strengthened? and now people go to work. they're more apt to save and put money in the bank. think about putting money in the bank today. you're getting a negative return on your principle. so you really -- you know, that's for each and every american by the hands of the federal chairman. he knows we're getting a negative return rate on our savings. and yet he's on this, you know, dropping more and more money into the economy. and like steve forbes says, helicopter ben. print more money. host: patrick in charlotte. guest: again, if the economy were to slip into deflation if chairman bernanke has made it his life cause, almost, to make sure that deflation doesn't happen

what does steve forbes think he joins us to talk about it.you, shannon. >> at this point the market having a rough ride in recent weeks. are they driving the fear or simply reflecting it? >> they are reflecting to the banking crisis in europe and the inability of the europeans to deal with their own sovereign debt crisis in unlike 20 years ago when we dealt with the latin american debt crisis. also here at home the president is still sticking with his failed policies. he will have another unveiling after labor day. so far there is no indication that he will alter his course. he calls upon john boehner the speaker to come down and talk. he has done that before. as boehner says the president keeps moving the goal post every time they get near an agreement. the same old same old. i think the market overreacted. wise investors now start to get into the market realizing there will be a lot of turbulence to come but in a year or so this country is going to turn for the better. and by the way, shannon, we will do a little better in the economy in th

sam brownback and ron paul, tom finishers in the straul polls and steve forbes finished in the strawll. it doesn't tell you who is out in the caucuses. >> chris: that's right. who wins the poll doesn't win the caucus and we are going to cover it still. susan. we have touched on this. one of the story lines in the debate is tim pawlenty versus michelle bachmann. they are counting on a strong showing and they appeal to tea partiers. what are you looking at those specifically. pawlenty is more organizationinized and been there long yer working harder. he could pull off a surprise first or second or third and steal the spotlight away from bachmann. she is newer at this and not as well organized. as well as in the polls she may fail more poorly. the iowa straw poll is about organization and getting people out. it will be the real fight here who is able to get people to the polls? people are looking at pawlenty as someone who can pull off the win because he worked hard exer got a good ground game. >> chris: if you think the caucus an organizational battle, the straw poll really, only a mat

earlier on "state of the union" i spoke with forbes chairman steve forbes and former obama adviser larry who despite differences both agree they see politics in s&p's move. >> it is a political move and i think it's really -- it will sound strange for me to say it -- an outrageous move. the government can pay its debts. it's got the wherewithal to do it. in a larger sense about the economy, i think the u.s. economy is in a perilous state. this recovery has been the worst from a severe recession since the great depression. i'm surprised s&p would pay politics. >> s&p's track record has been terrible. as we've seen this weekend, its arithmetic is worse. there's nothing good to see about what they've done. s&p said to sell. warren buffett said to buy. that should tell you something. >> you can see my entire interview with summers and forbes at noon eastern here on cnn. >>> syrian troops have reportedly targeted the city of dara sore ray in an escalating crackdown on anti-government protesters. the arab leagued urged them to halt the violence. >>> four nato soldiers were killed in eastern an

i don't think we will be rivaling the turn out in 1999 when george bush and steve forbes put on a show but there was a lot of enthusiasm . i talked to voters going in to cast their ballots. they had made up their mind in the past week. many of them had watched the debates and it changed their minds. >> interesting, what did they say first of all? >> i talked to several ron paul supporters before thursday night who changed their minds because they were not familiar with his views on foreign policy as they had been after that . they voted for sanatorium. >> and that is interesting. ron paul speppeds time answered questions about foreign policy. >> it was a particular change with sanatorium pressed him on iran and he was talking down the potential threat and pakistan had nuclear weapons and it is not that big of a deal if iran has nuclear weapons . rick sanatorium pressing on that backed ron paul in a corner where he was making a indefensible argument. >> last night you talked about rick sanatorium and he could surprise. you think that today it turned out? >> i don't know that but it was

and then we talked to steve forbes, ceo of forbes inc. both very good economic analysts. so i expected they come from different ends of the spectrum here as they look at what's wrong with the economy. but the first question out of the bat, of course, was what do you think of this s&p downgrading the u.s. credit rating? and they agreed on that. take a listen. >> i think in a narrow sense, it is a political move and i think it is really, it will sound strange for me to say, an outrageous move. the government can't pay its debts. it is legally obligated to do that. it has the wherewithal to do it. in a larger sense, i think the u.s. economy is in a perilous state. this recovery has been the worst from a severe recession since the great depression but i'm surprised s&p would play politics. >> look. s&p said to sell warren buffett said to buy. that should tell you something about the quality of u.s. bonds. at the same time, this happened because s&p was seeing what most americans are feeling. which is unhappiness with the solution that's are coming out of congress for a critic

and steve forbes, the ceo of forbes incorporated. >>> up next, though, we're taking a story away from it away from wall street for just a few minutes. we're going to focus on your street, your bottom line, what this line in history means for your pocketbook. how your efforts to borrow money or credit card rates, interest rates, even your investments could be affected by all of this. this decision to lower the u.s.'s credit rate sglg information all of our viewers need to know. we'll also hear a lot about how much of our debt is held by china. should we be concerned about that country calling for payment? we'll be back in three minutes. and he gives me a variety of options. would you like to have a look at a map, my lad? ah, why not? shall we check on the status of your knighthood? yes. again? yes, again, please! thank you. with my digital manservant, i'll never be homesick again. would you like me to put the kettle on, sir? no, i'd like you to get rid of that ostrich. it's been here a month. [ male announcer ] the new hp touchpad. get it now for $100 off, starting at $399.99. i love t

. >> back in 1999, steve forbes spend millions of dollars to win the straw poll but it has not always been a good barometer of what happens in the caucus. >> mitt romney spent millions four years ago. he lost by nine points at the caucus the following january to mike huckabee. it is a test of organizational strength. it plays a winnowing role when there are upwards of a dozen candidates running. as a predictor of the caucus, it is not anywhere near perfect. >> jonathan martin's peace piece available online. former gov. tim pawlenty, a lot of attention on what he needs to do tomorrow. when he was at the kiosk earlier today -- what is in need to do? >> he has to improve his standing in the polls. i think referring to the polls in june by the register -- he was sixth. that is a real low bar. if he won this thing or really close to winning it -- he will have a difficult time convincing his donors he is a viable candidate. on a practical level he has to show some strength. but i tell you what, tim pawlenty said this morning at an event my colleague hosted, that he is open to doing some kin

steve forbes finished in the straw poll in 1999. >> chris: the person who wins the straw poll often doesn'tin the caucus and the person who wins the caucus recently hasn't won the nomination but we are still going to cover it. one of the big story lines clearly in the debate and straw poll is tim pawlenty versus michele bachmann. both counting on a strong showing in ames. both apeople to tee parties and social conservatives. >> pawlenty probably has the better ground game. more organize and a great brass roots effort there. been there longer and working harder. he could pull off a surprise and kind of steal the spot light away from bachman. she is newer at this and not as well organized. as well as she is doing in the polls she may fare more poorly because the iowa straw poll is all about organization. it is about getting people out. idifficult to get people to coe to this thing and vote. that is the real fight here, who is better able to get people to the polls. at this point people are looking at pawlenty as someone who could pull off a win here because he has been working harder at it an

another viewpoint by e-mail -- a couple of more minutes of your calls and then steve forbes in new yorkbout economic issues. in "the new york daily news" they have a story about eric holder, the attorney general, telling the families of 9/11 victims he is probing the murdoch hack. the anniversary, of course, coming up. we will have extended coverage from new york, from here, and elsewhere in the country. another store wanted to point out, about the u.s. pipeline that drew protests and arrests outside of the white house. canada-to-u.s. pipeline plan set to clear a hurdle. they write that -- and if the camera can slide over to the right it would help the folks out. these are some of the protesters, activists, opposed to the pipeline, arrested tuesday at a sit in in front of the white house. it to the left is the actress margot kidder. detroit, michigan. ken, democrat. caller: thank you for c-span. i have a short statement. isn't dick cheney still considered a war criminal and he can't leave the country, as long -- along with george bush? host: last call from texas. marie on the republican

well, craig, steve forbes a former colleague at msnbc says he lives at 86th and broadway on the sixth floor in a high-rise and they felt the building waiver for six to seven seconds and he says that the building is right above the subway, but they never felt a tremor like this before. i am getting reports from new hav haven, connecticut, where people felt it there and my best friend is vacationing in delaware, and she sent me a message from what she thought was a vacation on the beaches of delaware and what is going on question mark as she is explaining to me she has felt it. in the last ten minutes i have received 100 if not 200 tweets from people all along the east coast who have said they felt the tremor here, and we are getting information from the wnbc producer from the attorney general's office says that at the d.a.'s office they could feel the building tremor an someone said it was a earthquake and then they felt an unusual smell as if something was burning and they could hear the debris falling, and so that was in the new york city attorney general office coming in from a wnbc