what was the great depression costing the american economy? d in part by the auto industry, the economy grew rapidly in the 1920s, generating more jobs, more income, and more free time. as long as the factories were humming, there was little concern about how well the nation was doing economically. but when the bottom dropped out in 1929, congress wanted to find out how bad things actually were. as lawmakers passed new deal programs to end the depression, senator robert lafollette wanted to measure the nation's economy. the greatest economic crisis in our history is a grave national emergency, which makes it imperative that we fight the depression on all fronts. congress must formulate a sound program to this end. lafollette's senate resolution directed the commerce department to estimate national income for the three previous years. dr. carol carson has studied the developments of national income accounts during the depression. you could look down your block and see that people were unemployed, but they didn't know what was happening nationwid

most markets across europe down this morning due to concerns about the american economy and the looming budget battle. >>> our futures indicate a higher opening this morning across the board for the dow. the nasdaq and the s&p 500, that follows some losses yesterday. oil prices falling amid concerns about the u.s. economy as well and falling demand. oil prices fell to more than 102 a barrel on the new york mercantile exchange yesterday. that's the lowest closing price since july 3. >>> time now 5:20.

why did these two events affect inflation and unemployment in the american economy? u.s. ety was besieged by the twin assaults of inflation and unemployment in the 1970s. why couldn't the government achieve significant success against the ravages of stagflation? in the late 1990s, the economy was booming. unemployment was at a 30-year low and inflation was also at a 30-year low. did that mean inflation was dead? during the 1970s the american dream threatened to become the american nightmare. for the first time, we were faced with skyrocketing prices and exploding unemployment. stagflation -- why couldn't we beat it? with economic analyst richard gill we'll explore that question on this edition of "economics usa." i'm david schoumacher. schoumacher: since the passage of the employment act in 1946, it has been accepted policy for the government to fight unemployment by stimulating total demand. often, inflation resulted. when that happened the government shifted gears and clamped down on demand in order to decrease inflation. for five administrations the government more or l

looking back it seems uncertainty over events in europe caused the american economy to turn sour. en uncertainty evaporated in the face of war the economy boomed once again. some radicals complained bitterly that war was the health of the state but on the whole americans welcomed prosperity. richard gill what did economists think then? they saw these fluctuations as temporary. there was a long tradition in classical western economics that there could be no such thing as general overproduction. depressions would cure themselves. when labor was unemployed, all labor had to do was accept lower wages. businesses would be happy to rehire them and prosperity would soon return. underlying this view was say's law, after the 19th-century economist j.b. say. what did say say? he said that, in total supply always creates its own demand. there can never be long-lasting overproduction since each good is either demanded by ourselves or is used to demand some other good. in the early part of this century, a businessman might produce 2000 ladies' bonnets. what does he do with these bonnets? he giv

the american economy is very large. e american economy was 4%. >> the idea to bleed us economically, it's very naive about the size of the american economy. we're spending historically, even though we spend a lot on military, 4.58% of gdp. >> when he sends out an internet video, a message like this saying go ahead, do boston bombing marathon type bombings in order to undermine the united states, does he have the charisma, shall we say, the authority to go out and convince people you know, individuals to just go ahead and do this? >> i think he's been more effective and than i and others that the he would be. a number of al qaeda affiliates pledge add legion jans to him after bin laden died. >> what do you think the u.s. should be doing about this specific latest threat coming the day after the 12th anniversary of 9/11? >> really nothing much can be done. he's released about 30 tapes in the last three years. with very similar kinds of messaging. you know, it's a sign of their weakness they're trying to encourage lone wolv

and then we're told that we're going to mutilate the american economy and government unless they get win the battle that they lost on the floor of the house in 2010. that's an extreme bargaining position. it's not consistent with americans who want us to get along, compromise and keep things efficient. >> let me ask you, congressman, i think it's a good debate. we don't know how affordable care will work, nobody knows for sure. you're right about everything. let's talk about technique. do you think the president of the united states is rabid, he's going to runaway. what do you think we will think of him if he buckles to your demand to get rid of obamacare, what will you think of him as a person, as a man? >> it's not our demand. it is that we are representing our constituents and we're standing on principle -- >> what would you think if he responds by eliminating his number one achievement? >> i think the president has diminished himself already the way he's handled the situation in syria and russia. i cannot imagine a russian president bresh nef -- i think president obama has dimini

times finally understanding who the genuine threats are to the american economy their bankers their financial terrorists i wish they would step forward and propose some solutions like raise interest rates to a level that snuffed out financial terrorism the thing is the l.a. times asked you know since nine eleven twelve years ago america has galvanized behind you know this war on terror and they've spent trillions and trillions of dollars defending the nation against further attacks will they ask then why not what's the bigger threat the threat of being blown up by a terrorist or the threat of threat of being. you know having your wealth destroyed by a financial terrorist and they say sure some islamics nutcase might be able to set off a bomb on a boss or in a building but for effect as that may be the damage to our society is not nearly as great as the wrecking ball second hit us all when one of the greedy schemes of aggressive and on scrupulous financier's go yes islamic terrorists in down the world trade center in two thousand and one but the financial terrorists took down the world economy

whatsoever i'm glad to see the l a times finally understanding who is a genuine threat to the american economy their bankers their financial terrorists i wish they would step forward and propose some solutions like raise interest rates to a level that snuffed out financial terrorism the thing is the l.a. times asked you know since nine eleven twelve years ago america has galvanized behind you know is this. the war on terror and they've spent trillions and trillions of dollars defending the nation against further attacks will they ask then why not what's the bigger threat the threat of being blown up by a terrorist or the threat of threat of being you know having your wealth destroyed by a financial terrorist and they say sure some islamics nutcase might be able to set off a bomb on a boss or in a building but for effect as that may be the damage to our society is not nearly as great as the wrecking ball second hit us all when one of the greedy schemes of aggressive an unscrupulous financier is go wrong yes islamic terrorists took down the world trade center in two thousand and one but the fina

times finally understanding who the genuine threats are to the american economy their bankers their financial terrorists i wish they would step forward and propose some solutions like raise interest rates to a level that snuffed out financial terrorism the thing is the l.a. times asked you know since nine eleven twelve years ago america has galvanized behind you know this. the war on terror and i've spent trillions and trillions of dollars defending the nation against further attacks will they ask then why not what's the bigger threat the threat of being blown up by a terrorist or the threat of being you know having your wealth destroyed by a financial terrorist and they say sure some islamics nutcase might be able to set off a bomb in a fosse or in a building but for effect as that may be the damage to our society is not nearly as great as the wrecking ball second hit us all when one of the greedy schemes of aggressive and on scrupulous financier's go wrong yes islamic terrorists took down the world trade center in two thousand and one but the financial terrorists took down the world economy

but to put something like the full faith and credit of the american economy on the line is just beyond pale. and americans show know. we're not asking about permission to spend future more, we're talking about permission to pay the bills we've already acquired. >> let me ask congressman cole about negotiation. everybody likes negotiation, we have a system of government that requires it in certain circumstances. there's a budget process in which a budget gets passed by the house, a budget gets passed by the senate, and they appoint people to a conference committee, where they hash it out. and the house refuses to appoint conferrees to that conference committee, saying they won't negotiate on the budget. why not negotiate through the normal channels rather than -- >> i think there's always a pre-negotiation that took place, and frankly, that didn't work out, which is how many times do you want to be able to bring different points up on the floor. it's a technicality. but i basically agree with you. i want to negotiate with the president. i demonstrated on fiscal cliff, on sandy, on viole

the long and short of it is this -- the american economy is not doing well enough to be left alone. after saying it was gaining strength, the head of the federal reserve decided to keep going with economic stimulus to try to encourage job and economic growth. both the dow and the nasdaq closed at record highs. mortgage rates are expected to drop, but the fed believes the american economy still needs a continuing infusion of $85 million a month. and there are growing concerns that a potential government shut down in washington will do even more damage. now across the border. >>> near ottawa today, a terrible crash between a passenger train and a double-decker bus. survivors on the bus said many passengers were screaming at the driver to stop just sends before the bus crashed through a crossing barrier into the train. part of the via system in canada. >>> it's an increasingly desperate situation in and around the resort city of acapulco. hit hard by tropical storm manuel which flooded the city and some resorts and the heir port. the death toll is now listed at least 80. most of the tou

well it's the american economy they have in mind for our side it certainly doesn't need to be the new american economy but it's the one that a lot of people and power and a lot of people with influence and money would like to see which is an economy of enormous wealth accumulation at the top combined with. high unemployment low wage service economy for the rest of us and yet you know it's fascinating sam because if you talk to some of these folks they're also historically savvy enough that if some of them are very frightened because they know that in economy like that is unstable and threaten social unrest and threatens political unrest so they're basically in the mindset of let's grab everything we can out of this what you describe as a new american economy and if it blows up hopefully it will have enough to take our money and perhaps our lives somewhere else this is all happening under you know we're five years into the presidency of barack obama he's slow to be idea of cutting social security raising the retirement age for medicare what does that do to the legacy of a party to this

it's not their job, as they will explain to you, to take care of the american economy. they weren't hired by the american economy. they were hired by the shareholders of that company to make money for that company. every technological breakthrough made by capitalism in the last 300 years has been justified by whoever was making it on the grounds that, "with this new machine," or, "with this new process, human labor will be less drudgery." machines will replace people. we will not have to work so hard and so long. how interesting. according to the oecd, americans today, where we have the most advanced technological breakthroughs imaginable-- americans today do more hours of paid labor than any other working class in any country

the study concluded that american consumer and business confidence in the economy was one of the biggesttims of the crisis. ♪ >> to help us understand the financial crisis that was, and the status of big banking now, we're joined by neil erwin, and abby mccloski. from los angeles, david dayen, a contributing writer for salon. thanks to all of you. now this is the fifth anniversary. anniversaries come and go. we love them in the media. but we're not the only ones. president obama took a moment to say let's look back on where we started five years ago and where we have come. why is this such a significant anniversary, neil? >> we have been through this wrenching experience the last five years, and it is the defining episode of the 21st century. this really has been the defining episode of our lives for a lot of us. it has caused massive unemployment, years of sluggish economy, and remade the financial system in ways that aren't totally fixed yet. >> abby can you pin the current economic situation to what happened to the banking five years ago? >> the economy is certainly facing significant

the american economy is not doing well enough to be left alone. after first saying the recovery was gaining strength, the head of the federal reserve, ben bernanke today decided to keep going with economic stimulus to try to encourage job and economic growth. both the dow and s&p closed at record highs as a result. good news for anybody with a 401(k). mortgage rates are expected to drop but the fed believes the american economy still need s a continuing infusion of $85 billion a month. there are growing concern that is a potential government shut-down in washington will h do more damage. >>> now across the boarder in canada near ottawa today, a terrible crash between a passenger train and a double-decker bus. it killed six people at the height of the morning rush. survivors on the bus said many passengers were screaming at the driver to stop just second s before the bus crashed through a crossing barrier into the train, part of the via system in canada. >>> it's an increasingly desperate situation in and around the resort city of acapulco, mexico,

example of weather and gps, my monetization, is that together they contribute $100 billion to the american economy last year. last year alone from just those two data liberations. so, that is the way in which we are approaching from a strategy perspective, the ultimate impact to our customers. >> one super quick. one thing the city of san francisco or big cities or federal, right, the other smaller cities, smaller cities have smaller budgets. having a structure to support all this open data takes a lot of money. so, when these small cities are thinking about this, they should think about a way of somehow equalizing because they are putting into having these open data team, right? so, what does make sense? this is kind of an open question to get your point of view. >> do you want to take that, shannon? >> i think that there is actually quite ah few examples. we can probably talk to this more with smaller cities that are making open data efforts. but what i would say is that it's proven more than the value of the investment. the return that we've gotten just by opening up the data has actually given

proportionetly, all of them. >> i think the globalization of economy and the nationalization of the american economy is behind it all. >> you think we could survive without a flourishing economy? >> we survived for 200 years before we got into the global economy. >> housing -- the recent great recession is caused by the housing bubble, the bursting, and the greed on wall street. >> the chinese is representative of one problem, which is we have a tremendous transformation of the global economy. they're much more competitive in a lot of products that we used to make but the real problem is we're in a tremendous technological campaign. >> the world is interrelated in a way that it never has been. >> it is. and i don't like it. >> the world is changing. we cannot roll back the clock on globalism. we tried to do it in the past. we brought about recession. consumers here love global trade because it makes things cheaper, and, okay, it under cuts jobs. the economy's going through changes. >> the consumers brothers and sisters don't make them any more. >> there are ways to boost the working class am

. >> reporter: while the government continues its push to get the economy back on track, americans still feel an overall disconnect. according to a recent pew research poll 6% of americans felt government policies have helped small businesses. nearly a quarter of those polls said policies have helped a fair amount. and 67% felt small businesses have not been helped much or at all. though the federal reserve acts independently on monetary policy, the dysfunction in washington is a factor that is running in the background. congress is on a collision course on the budget in the coming weeks. as bernanke's term runs out in early 2014 the debate of the role of the federal reserve in the american economy is now front page news. >> a lot of developments this week. we certainly have a lot to talk about. joining us to discuss the federal reserve decision and the central banks role in the economic recovery are a professor of international finance and business at george washington university. she serves on the board of directors at the international trade and finance association. from new york, chi

. >> this product is important for the american economy. it is a work for us. people who are the backbone, the true backbone of our economy need trucks like this to do their job. >> and what scientists now believe about our impact on the environment, a growing body of evidence, and an advanced look at what experts around the world agree is happening. >> >> good etching and thanks for being with us. we begin tonight with a story that is still developing, it is now heading toward a full week since it began. but the events that began with a upscale kenyan shopping mall have important implications for americans. especially in the fight against terror attacks. an international team including americans is now searching through the rubble of the mall, where at least 72 people were killed, as they try to piece together how gunman from the el sha babb organization planned and carries out this assault. five days now after the attack, a series of explosions rocks west gate shopping complex, smoke could be seen rising from the mall, although it is still unclear what caused

even if we didn't have these programs americans are generous people and they will find ways to help people in need. look, if we have an economy would grow at the rate we are at now because when you have an american hobby it isn't -- you're not going to get people out of poverty if the economy is growing at 1.5%. you have to grow two or three times faster. this is one of the things that motivates me. what policies can we put in place right now that get us back to the three or 4% growth tax? and if we do that and the way to think about the growth is to solve the deficit problem and the wealth problem and we can have money for schools and science and all the things president obama believes in but if you don't have economic growth and we are all sticking our handout for a reduced number of models. >> we are here at freedom fest a libertarian gathering in of a guess. we talked to a couple other authors, jim rogers who spoke a little bit on the sky is falling and we are printing too much money, gold standard. do you share their views? >> i'm kind of the optimist here actually i believe in america. the way i always put it is we have a lot of problems

i don't think he cares about the american economy. e wall street journal editorial page, they don't want the american economy to crumble. this guy doesn't seem to care. and that's what's really scary to them. thank you jim moran and john feehery. >>> coming up, so exactly who is this guy ted cruz? a reporter for the republican friendly weekly standard wrote that as he was in the back seat of a car listening to cruz, he calculated how many vertebrae he might break if he jumped out of the speeding car. >>> also president obama kicks off a six-month effort to explain the affordable health care act. about time. and he talks with bill clinton at the clinton global initiative today. >>> plus it looks like we're about to witness a thaw in relations with iran nearly 34 years after hostages were taken in tehran. >>> and president obama said the reason he quit smoking is he's afraid of his wife michelle. i know a lot of men that can relate. this is "hardball," the place for politics. she's always had a playful side. and you love her for it. but

the allies turned to the americans for weapons to continue the war. keynes feared the economyldn't stand the strain of increased demand. but in washington, his young disciples disagreed. we were more expansionary than he. he thought it was time to put the damper on aggregate demand. we disagreed, partly because our view was that the capacity of the economy to produce was greater than he thought. the great depression ended with the vast production of wartime economy. government spending, which frightened roosevelt when it topped $15 billion in 1936, soared above $100 billion during the war. massive government intervention finally brought full production and full employment. why couldn't the private sector have brought us out? what keynes said was, total private demand might not be sufficient to sustain full employment. suppose this is national income when everyone is fully employed. but suppose investment demand plus consumers' demand only equals this level. there isn't enough demand to sustain that level of income. keynes said full employment could be achieved if we added publ

in the last couple of years when you look at the econom fiscal policy face-off, the economy, the americannomy has been a thing that take a hit. that is without throwing a hot topic issue like obamacare in the mix. look at 2011 when the last debt ceiling face-off happened. we saw the stock markets plunge. >> david: we did. >> rating downgrade. >> david: true. then shortly afterwards the stock market came back up and they ignored the deb rating cut. but extortion? the word "extortion' a strong word. the president seems to forget what he said, which would be called extortion by his finition as well. extortion is iminal. this president is grasping for straws because he knows that 53% of americans realize obamacare will drive their healthcare costs up. republicans are doing the right thing. this is risky business. they realize obamacare is not ready for the big debut. it will drive up cost and cut jobs. we have lot of work that has to be done to implement this properly. >> david: but rick, on this debt issue. by the way, president obama is not the only one to commit hypocrisy. harry reid and n

american politics. i don't think it's right to call it politics in the same sense. there are dozens on the right who are trying to jeopardize the american economy by defaulting on the debt. they want to basically kill the affordable care act in its crib. that's the threat, that's what the demand is, and it's now all out there for all to see. i can't remember when the political party did something like this. it could throw the market into a tailspin and whack our 401(k)'s into a fare thee well. so what justification does the right wing of this country have for the senseless assault on the credit rating which happened the last time they pulled this tactic? what's the end game in which the world watches us as the country defaces itself. it achieves nothing, kills whatever's in its path. this is how i look at it. and i hate to see what i see because i still believe despite this hard evidence in the rights of self-government. david, political analyst. i respect your office. congratulations on representing your district. my question is, what do you think will be the impact of a default on the u.s. debt? >> i don't think there will be a default on the

the u.s. economy goes through an economic transformation which is a great testament to how brazilian the u.s. economy and americans are. the u.s. economy has never been lower mobile. you can choose to live places. you don't need to be on a riverboat system as you did in 1600, 1700, 1800, you don't need to be by a coal producer. is much more mobile. we talk about the influence of the energy revolution, think about california tech companies, so many of them have built in facilities around austin not because of energy but because it is is easier to do business in texas. california has become so prohibitive to do business in. states are competing more aggressively than they ever have against each other. businesses, what i originally thought in 2010 i was creating, no idea i was going to write about, and investors and businesses to see and compare and contrast where they would want to invest and build new facilities. it is absolutely happening. more and more support of the fact that the growth is overweighted to the central states versus coastal states. the point about education is taught on. so you have areas of the c

our auto industry, the heartbeat of american manufacturing was flat lining. by the time i took office, the economy was shrinking by an annual rate of more than 8%. our businesses were shedding 800,000 jobs each month. it was a perfect storm that would rob millions of americans of jobs and homes and savings they had worked a lifetime to build. and it also laid bear the long erosion of a middle class that for more than a decade has had to work harder and harder just to keep up. in fact, most americans who have known economic hardship these past several years, they don't think of the collapse of lehman brothers when they think about the recession, instead they recall the day they got the gut punch of a pink slip, or the day a bank took away their home, the day they got sick but didn't have health insurance, or the day they had to sit their daughter or son down and tell him or her they couldn't afford to send their child back to college the next semester. so those are the stories that guided everything we've done. it's what in those earliest days of the crisis caused us to act so quickly through the r

>> bob woodward thinks president obama could be blamed. >> the american economy is at stake. esident, if there is a downturn or a collapse or whatever could happen here that's bad, it's going to be on his head. >> a lot of rhetoric from mr. woodward lately. >> here's what i think. this ping pong back and forth. they may shut down for a day or two. then they'll figure out a way to refund the government until the next one and the next one. obama care will get implemented in the meantime. this is brilliant strategy by people on the far right. they've made it clear to the american people they don't like this obama care. then they lost the fight. so in 2014 when it comes out and all these little districts are going up against democrats. republicans against democrats. there's going to have to -- if obama care work, they'll be in trouble on right. if it fays like everyone thinks it will or it's hurt the economy, then they will win. win handily in 2014. don't call it obama care, starting today, it's demo care. >> brilliant strategy to lose, is that -- >> there's not a win for the repu

>> obamacare and the president's energy policies really are a one-two gut punch to the american economy and the middle class families. i want to talk a little bit about energy. last week the president announced a policy that is essentially an energy tax on american consumers. in an economy where we have the lowest participation rate, labor participation rate, over the last 35 years, and you have take-home pay, average household income has gone down by almost $4,000 since the president took office, and 60% of the jobs created here so far are part-time jobs, you have a pretty weak and sluggish economy. that's why when the president keeps piling on in the form of obama mandates and requirements and now a new national energy tax, it will hit middle class americans and families squarely in the gut and that's the last thing that we need right now. we need policies that will get people back to work, that will increase the takehome pay for middle class families across this country, and will get this economy growing again. and you can do that by permanently delaying or repealing obamacare. you c

it's september 19th, and this is "now." >>> forty republicans have the grand ole party and the american economyay john boehner broke the will of the congress and announced the house may stay in session until saturday that votes on the bill that defunds the national health care law in exchange for keeping the government open. the bill has zero chances of surviving in the senate and the white house has already threatened to veto it but the shutdown of the government remains real enough the white house office of management and budget has asked federal agencies to prepare for a shutdown as early as october. boehner's capitulation to a handful of fractious conservatives follows a summer long campaign led by mike lee and tom cruz, one that happens to be divorced from reality. >> if we see millions and millions of americans saying save us from this train wreck, washington will be forced to listen. >> we're not. given the current makeup of the u.s. congress what ted cruz has been relentlessly

why did these two events affect inflation and unemployment in the american economy? u.s. s besieged by the twin assaults of inflation and unemployment in the 1970s. why couldn't the government achieve significant success against the ravages of stagflation? in the late 1990s, the economy was booming.