professor stiglitz, good to have you back on this program, sir. >> nice to be here again. tavis: let me start, if i can, with the news of the day, the elections in greece. your sense of what happened there and how what happened there impacts us here? >> well, it looks like they pulled back from the brink for the moment, but it doesn't solve anything within europe. the fundamental problem is the euro is a construct that doesn't work and the remedy to the current problems that europe, germany is pushing on spain, greece and other country's austerity is bringing unemployment. 25% unemployment, 50% youth unemployment, making the problems only worse. unfortunately, there's no light at the end of this particular tunnel. tavis: what's the impact gonna be on us? >> well, a european slowdown inevitably will hurt us. the problem in america today is lack of demand. one of the reasons for that lack of demand is our high level of inequality, one of the ways in which we're paying a high price for this inequality. president obama talked about the possibility of exports filling in the gap

like that was your moment of opinion on that particular thing the conversation you had with joe stiglitz his wife and showing up at the airport you mind sharing that story with. yeah i mean you know you go to davos i had gotten a credential to go to cover it because i was writing the book and i thought well i'm writing about the elite i got to go to davos and you fly to davos and you get into the airport in switzerland and you think yourself oh you know i'm going to davos like i am you begin to feel this little bit that i am one of the elect and you go and there's a very nice booth where very attractive swiss young swiss to greet you and they they give you a ticket you go to a bus and it's a perfectly fine coach bus and you get on it and as you're making your way from the plane to the coach bus you also notice there are people who are getting off the plane who are in first class and they're being approached right at the gate by this whole entourage of davos employees in red jackets who are a scorning them to these gleaming black mercedes sedans outside and they're going to get driven the

jan stiglitz, keep us up to date on what's happening in daniel larsen's case.te you coming on the show this morning. >> and we appreciate your attention to this important story. >>> countdown to the republican convention. do you ever wonder what's in it for me? we'll take a closer look at the message republicans need to convey and who they are trying to reach. ♪ why not take a day to explore your own backyard? with two times the points on travel, you may find yourself asking why not, a lot. chase sapphire preferred. there's more to enjoy. >>> we are just a couple days away now from the start of the republican national convention. all eyes will be on tampa next week. but in the run-up to the showcase, the republican party has been scrambling to get back on message. it seems that they've lost a little focus in the wake of the todd akin legitimate rape controversy, the expected arrival of tropical storm isaac in florida and mitt romney's birth certificate joke at a rally just yesterday. joining me now as they do every week to talk politics, cnn contributor maria c

a lot of people are now coming around to this way of thinking whether it's real rubini or joseph stiglitz that there needs to be some deterrence remember after the crash of twenty nine there was the precor a commission and a lot of bankers went to jail after the s. and l. crisis a lot of bankers went to jail the bankers have been allowed to run riot and there's no jail time for them and now people are wondering well how do we stop this and they figure well jail is one possibility but this phrase should there be capital punishment for crimes against capital that's a phrase that i coined a couple years ago so i'm glad to see that others are picking up on that but this is a real problem and this is a real solution in my opinion well they actually say it's a it's been a solution for thousands of years they start with the code of hammurabi more than three thousand seven hundred years ago stipulated that any mesopotamia him who violated the terms of a financial contract including the futures contracts that were commonly used in commodities trading in babylon shall be put to death as a thief now

well oh go ahead and do you want to add something i'm just going to say like like joseph stiglitz said which i thought was a great quote he said a good banking system is a small banking system and that's the point right supposed to lend out money it's supposed to be sort of like a utility you know banks were never supposed to be these big. leveraged hedge funds essential and that's what they are right and yeah i mean we don't even have a need to call them even banks it's crazy so that's that's the key point that i really want people to go through their heads through their they're basically economic threats to the economy monstrous threats to the economy would be a better way to describe the big banks i think you know as far as political options looking at the ones that we have for president of the united states mitt romney and obama i know wall street has thrown more of its money behind mitt romney this time around last time they overwhelmingly supported obama in the previous election but i don't really care about that when i look at their policies they look at exactly the same when it

are we talking about stiglitz here? will go with my theory. what do you think? >> well, everyone is being affected by all of these things right now and you see jpmorgan chase massive trading loss that was basically a bad debt on your upright. but in a way, these institutions are so vague that they are shielded almost a bed because he thought that massive trading mott can you still see jpmorgan reporting assets. so they are all very affected. we've all created the system at the bakery just gigantic. >> they know they will be built up by the taxpayer. >> exactly. >> that creates moral hazard. >> this describes a great question because we get a little too much inside baseball and the financial journalism world, all three of us. describe the problems inherent in the option or product and its aggressive push by wamu. >> that's a great question because we actually didn't get into that. wamu is basically a furnace wamu for a subprime team. one of them are riskier products and actually one of the biggest products is the option armload. so this was this incredibly dodgy

are we talking about stiglitz here? will go with my theory. what do you think?well i mean, everyone is affected by all of these things right now. you see jpmorgan chase's massive trade and must basically a bad than in europe, right? but in a way, these institutions are so vague that they are shielded because even with the massive trading moms, you still see jpmorgan reporting profits, said they are all very fact dead, but we have created this system with the baker just gigantic. >> and they know they will be felt up to the taxpayer. the backroom is what economists call moral hazard. >> describe -- this is a great question because we get a little bit to match inside a stall in the financial journalism world, all three of us. describe the problems inherent in the option armed product and its aggressive push by wamu. >> we actually didn't get into that. everyone knows for is some prior planning, but one of the more riskier product and one of the biggest product is the option armload. so this is an incredibly dodgy mortgage for you can actually choose between variou

are we talking about stiglitz here? will go with my theory. what do you think?well, everyone has been affected by all of these things right now. you see jpmorgan chase's massive trading lines basically a bad debt on europe, right? put in a way, these institutions are so big that they are shielded almost a bit because even with a massive trading maas, you still see jpmorgan reporting process, said they are all very affected. but we laid created to assist a with the baker just gigantic. >> and a fob buildup by the taxpayer. to that creates what economists call moral hazard. >> rate. >> this is a great question because we get a little too much inside baseball and the financial journalism role, all three of us. describe the problem and the option, an aggressive push by wamu. >> that's a great question because they didn't get to. everyone knows wamu. but one of their biggest projects is the option armload. so this is this incredibly dodgy mortgage, we could actually choose between various options each month of how you pay your loan. even the concept is unbelievable.

amnesty is to be joe stiglitz never come at never come at a price of inequality.pter one is america's 1% problem. he doesn't present much data it can assert it talks about the data and then he concludes, cocoa and simple story of america is based. the rich are getting richer, poor become poorer and more numerous than income in the middle class are stagnating or falling. why is that a misuse of the data? the numbers only cover the top 10%. they are as the authors admit, silent on any other part of the income distribution. the congressional budget office has a better job of including everybody and what they found was the average incomes of the top 1% of pay 37% from 2007 until 2009. this increases go, that is pretty rough. they also found that real median income, stagnating or falling as stiglitz refers to, verse 48.8% from 1880 until 2009 including 13.9% between a high of 2000 in the peak of 2007. as for the poverty rate, we'll get back to that in just a minute. the second major errors in the use of these numbers all relate to you for getting the point that brian m

this gets back to the poverty rate that stiglitz was talking about. what you see in this graph is that when the top 1% share prices, notably in the '90s, the poverty rate goes down. when the top 1% falls, notably in the last few years, the poverty rate goes up. so we have all learned to say when the rich get richer, the poor get poorer, according to this data is absolutely backwards. if you're going to use this as the top 1% as a measure of inequality you were put in a paradoxical position of saying that spirit in which the poverty rates goes up is a good thing because its reduction of inequality. recessions are a good thing. they always produce inequality, by that measure, top 1% always fall. every recession but one since 1913 the top 1% has fallen so these folks should be cherry-picked and 99% particularly should be cheering because in the last come into two years between 2000, 2009 their share of income rose by five percentage points. wow. this is a bigger share of a shrinking pie. welcome to a. it's not much fun, but that's the number that use. th

joe stiglitz's book, the cost of inequality, is also something i'm about a quarter of the way through and enjoying that as well. >> host: this e-mail for you, dr. malveaux, how do you view the concept and practices of the fed? what response do can you make to critics of the fed's creation of money from paper as a primary cause now of global inflation and economic imbalances given that regulators will never be more perfect than humanity in general? >> guest: you know, there are a lot of theories that sort of move around the world about the fed. just all kind of things, conspiracy theories. i think the federal reserve, while flawed, is essentially a decent institution. i think that there are leaders of the fed who have been extremely flawed and have a disproportionate amount of influence on what happens in the economy. i think of alan greenspan, and once he said the economy had irrational exuberance at a time when the black unemployment rate was really quite high. and that rational exuberance comment led to a bump positive in the stock market. and you say how does this one man have that

>> bill, "stiglitz post dispatch -- saint louis post- dispatch." >> can todd akin be successful -- >> thank you for your time. [laughter] akin be todd successful demonizing the republican party bosses and will lead bleed into other races? >> i have obviously thought about this [laughter] first, i think congressman todd akin is a good and decent man who served this country while and we should not throw away -- well, and we should not throw away his career based on what he said. that does not mean he is a suitable candidate for office right now. there is not one poll by suggests he could win, either that he has produced, or that has been the third-party, independent poll. i think that is why you see so many people in missouri, members of the delegation, the state speaker of the house say this is not your time, todd. he says he is going to run. we take him at his word. i think they're just is not a path to victory for him right now. with regards to how other people deal with it, you know, this is one of the few times looking back where there is basically unanimity among elected officials