by the mid-1980s we were doubting our ability to manage the economy. ilization policy-- are we still in control? we'll investigate that with economic analyst richard gill's help on this edition of economics usa. i'm david schoumacher. for many years after the great depression national economic policy's basic goal was minimizing unemployment. but the winter of 1982 saw 12 million unemployed. many complained they were victims of a needlessly cruel government policy. public enemy number one was inflation, and jobless workers were the war casualties. the battle cast new doubt on the government's ability to manage the economy or the wisdom of even trying. why was stopping inflation so hard? the time has come for decisive action to break the vicious circle of spiraling prices and costs. inflation is domestic enemy number one. present high inflation threatens the economic security of our nation. from richard nixon through jimmy carter president after president set out to fight inflation. when that threatened to increase unemployment president after president r

the dangers of a profound effect on the economy, equally real. rous commentators observed that the parallels to 1929 were ominous. even the upturn in the market in late 1987 had had its parallel in the 1920s, only to be followed by a further collapse and the greatest depression of all times. but it didn't happen. and one reason was that theories of long-run steadiness gave way immediately to an appreciation of the crisis. did we need more money, more liquidity? we would have it, the fed told us, quickly and unequivocally. forget general rules -- handle the crisis first. which leaves us where? perhaps better off in economic facthan in economic theory. cruise control is great in automobiles on the open highway, but when the traffic gets hot and heavy, there is, alas, no substitute for human judgment. hopefully, good judgment. monetary policy was an effective factor in holding down inflation in the booming '90s. the federal reserve was also successful in limiting the damage from various crises to hit the u.s. economy, including the financial crisis a

i think it would have probably been rather harmful to the economy. ve sometimes extravagantly said we would have lost the war. if we had tried to do it by pay-as-you-go, we would have had to impose very much more of a dictatorship on the community than we did have to. schoumacher: the end of the war found the country facing a huge national debt. yet somehow, the $260 billion we owed in 1945 did not seem as terrifying as the $40 billion we'd owed in 1939. the nation was prosperous. and as the economy grew, tax revenues increased and government expenses declined. and years later, as all those billions of dollars of world war ii bonds came due the government simply borrowed new money to pay the old obligation. the nation had gone deeply into debt to pay for the war. that debt never really went away. it just seemed to shrink in size compared to the total gnp. we asked economic analyst richard gill if this meant that we had passed on the cost of the war to future generations? the simple answer is no. the basic costs of world war ii were borne by the genera

is it the economy? s that will keep you up and night are china and europe and the possibility that things could seriously go wrong. mohammed and i have talked many times about europe not addressing its fundamental growth crisis and the actions they are taking. i still don't think that is going to work and i don't think we are -- i think we are in for some dark news. >> you and i have talked football so many times on air and by e-mail. and a you are a jets fan great predict of things to come. do you think smith should go? >> i don't know. and i geth hopes destroyed emotionally. maybe it is a good thing. >> what about you? >> i am a cubs fan. i don't want to hear any of this. >> thank you so much. thank you to scarlet fu and julie hyman. we will have reaction to today's better than estimated job report. john perez will give us the white house's take. -- tom perez will give us the white house's take. ♪ >> the u.s. economy added 240 8000 jobs last month. well above the 215,000. perez says the country faces t

lagarde discusses the slowing global economy. despite democracy protest, hong kong's chief executive says he will not resign. to our viewers here in the united states and those of you joining us around the world, welcome. we have full coverage of the stocks and stories making headlines today. tom keene is in washington today with highlights of an interview with christine lagarde. julie monitors equity markets and oil dipping below. petergton correspondent cook and a preview of president obama's speech on the economy. good afternoon. >> good afternoon. speak to business school students outside chicago in just a few minutes time. really, this is an opportunity for the president to try to change the conversation back to the u.s. economy. so much focus on foreign-policy issues. airstrikes against syria, even arriving hereat in the united states. the president trying to refocus again american attention on the u.s. economy. the jobsday away from report, about 30 days away from the midterm elections. a big focus right now for democrats,

strong enough to lift the global economy. the fear of a triple dip recession, is making markets nervous. >> germany has been a star eyed boy, who was going to lead everything to the next phase of the recovery. that's not happened and it feels like they have been dragginged back to the likes of france, and italy. but hold on, why should the u.s. be worried about europe's economy? there's plenty of good news here, interest rates are still at rock bottom, mortgage rates are dipping again, unemployment rate are the best we have seen in almost a decade, and gas prices many americans are now paying less than 3-dollar as gallon. >> it definitely helped out. when it comes down 20 to 30 cents that means i am not putting 80-dollars in here. lower prices may make you feel better, but take a broader view. and the benefits to your wallet now could be offset later if the economy faltering. let's get back to the markets, yes, in the past five days market power looks bleak. i think our markets need volatility, it is healthy, moving in one way

i think the people of colorado are talking about the economy. you know if you look at the last several years the median household income has declined over $4,000, people are working fewer hours because of obama care, you scratch the surface and people are hurting. >> tomorrow's jobs reports will provide another scenario where the economy is heading. president obama hopes to give democrats like senator mark udall something to brag about. i'm john harwood in more son, colorado. >>> still ahead, would you buy a car from warren buffet. why he decided to get into the auto selling business. >>> warren buffet is getting into the auto business, his company, berkshire has bought the auto dealer. the economy has rebounded and that caught buffet's attention. phil lebeau has more. >> reporter: it is the big business that has made a big comeback, running an auto dealership. now, warren buffet is getting into the game, buying the tire group which is the majority of the owners around the u.s. >> this is just a very, very good operation. the partnership approach

the u.s. economy is far smaller today than it would have been if the crisis had happened. >> isn't that the problem with the japanese? >> they responded particularly ineffectively. the europeans have done a worse job than the japanese. now. a response to this crisis significantly worse than the japanese responded to the worst. the lesson i draw from this, if a big crisis happens, nearly every government and policy system will fail. they want to one not to deal with it quickly, even if they could. that is a controversial issue. the first lesson is don't get into such a terrible state in the first place. that becomes crucially about how you arrange the financial system. >> i will come back to do after the crisis, but do you think the reform that was created is sufficient to prevent a crisis again? >> no. i don't. i think there are genuine improvements. i argue if you look at this, in essence the financial system we have today is similar to the financial system we had before the crisis. sometimes it is m

it's the economy. it's the jobs. james carville famous lip said, it's the economy stupid. this is what we should focus on as well, right? >> yeah. of course they're concerned about ebola and isis. what they're really concerned about, empty bank accounts. democrats continue to say, oh, the economy is doing fine, doing great. the labor participation rate is the lowest its been in 36 years. and a new poll out shows that only 24% of americans have confidence in president obama's economic policies and it's easy to see why. because obama's policies have not worked for the american people. >> all right. juan, 92 million people, americans, are not in the workforce. one in four young americans aren't working. how can he possibly, our president, possibly say by all economic measures everything's great? >> because it's true. i mean, unemployment's down. i don't think we've had unemployment in the 5% range in the last seven years. not only is unemployment down, consumer confidence is up. the stock market is breaking records. i don't think there's anybody on this panel -- >> because pe

and the global economies. he is co-head of willva economics research at bank of america/merrill lynch. welcome. good to see you. we've led the broadcast with a tremendous amount of observations, statistics, international, domestic, how the consumer feels, retail spending. pull it all together for us. how are we doing in the united states? how's the world doing? and how might a slowdown globally affect us? >> the u.s. is doing pretty well. i mean, probably the best indicator is to look at the labor market. we've had average job growth over the last eight months of about 230,000 a month. that's about double the normal growth rate. so this has really been the first sign in this recovery of real healing in the labor market. so we're quite optimistic about the u.s. we think that we're entering a new, stronger growth phase. now, obviously, overseas, things are very different. and we've had had a slowdown in many major economies. i don't think that means they're going into recession, and i don't think it torpedos the

that is about the size of the german economy. k about what expect from a post-qe environment. trish regan joining me on the set. also, and alice from the new york fed. -- an analyst from the new york fed. you can give us the fly on the wall perspective. the arc from the beginning of qe until now, what did it accomplish? a i think it accomplished whole lot. sure, it hasn't been everything we have hoped for but when you look at the problems from fiscal policy, the headmans from -- headwinds from europe, the fact that we have had the economy we have had, there is not a lot of fiscal policy to make up for it. >> i was talking to kathleen gaffney and constance hunter about the initial criticism of qe, and there was a lot of it. a lot of people thought it was going to wreck the economy -- >> i think that the reality is we do not know yet. we do not know if it created an asset bubble unintentionally. it could be credited with preventing us from going into some kind of deep recession. had this been more quick -- here , and weix years late

predominantly in the advanced economies go but up only the advanced economies. are dealing with the challenge of creating jobs for those people looking for the man making sure that those are coming to the job market in all cultures of the world have the means to access it and make a living end of it we currently have about 200 million people looking for jobs of which 759 of under the age of 25 to win and that is a we should focus on. focusing on the fact that apart from the 01 percent of the wealthiest in canada has been stagnant for most. you quoted me put it is not just a moral issue good that sustainable growth with the labor market that works better. some people think it's not right. there are countries that have tried and have succeeded. if you look, for instance, at some labour market policies is inside then successfully captures of germany, countries like esther oyer, countries like sweden. there is no magic recipe because it has to be specific predestine deal with the particularities of the skill set to the educational system and, indeed, the kind of gro

the u.s. economy is far smaller today than it would have been if the crisis hadn't happened. >> rose: isn't that part of the problem with the japanese in terms of how they responded? >> well, the japanese responded particularly ineffectively. an object lesson but the europeans have done an even worse job, by the way, than the japanese. >> rose: at different times. >> now. the europeans responded to this crisis significantly worse than the japanese responded to theirs. the u.s. sort of is a bit in between. so the lesson i draw from this is that if a big crisis happens, nearly every government, policy system, will fail. they won't do enough to deal with it quickly. even if they could, and that's a controversial issue. so the first lesson, like with persons health, is don't get into such a terrible state in the first place. and that, of course, becomes crucially about how you arrange the financial system. >> rose: i will come back to what you do after the countries is hits. but do you believe-- after the

so deep ties all the way around. >> let's talk about the economy. lk about bentonville where wal-mart's headquarters is. last time around the support dropped substantially. what is that somebody? >> it's very interesting. the northwest part of the state has really become, you know, a republican haven. there are numerous republicans who now live in that part of the state. it has a lot to do with economic growth. i think it also has a lot to do with people coming in from out of state to work at wal-mart, tyson and other economic enterprises that really don't bring the traditional democratic values that -- up until say 2010, arkansas was known for. so that transformation has lead to a rise in republican voters in the northwest part of the state and an influential sector that is driving republican success statewide. >> in an election where there are fewer and fewer competitive races, arkansas will be one to watch. blake thank you so much. >>> up next, a warning today about our global economy and how building things like bridges might be one way to fix it

to politics, to the economy. we'll catch you up. tonight on "washington week." >> it's clear that our security plan was not properly executed. >> i wish to god you -- you protected the white house like you protect your reputation here today. gwen: julia pierson out at the secret service. as the people charged with protecting the president suffer a is you session of black eyes. raising new questions. how deep do the problems go? and how will they be fixed? only last week the president sounded the global alarm. >> if left unchecked, experts predict that hundreds of thousands of people could be killed in a matter of months. that's why i've told my team

there's little doubt that the economy improved. but clear the fast number of people don't feel the improvement. an article i read put it quickly, that the middle class has not had a raise since the 1980s. another thing that the president said is i'm not on the ballot, ballot. >> his name is not on the ballot. but so much is associated with him. another side of this is he did not give immigration to a lot of candidates. there's no legislation on immigration, which is what a lot of candidates thought mark udol was running in colorado. the president has to give ammunition for the candidates improvement. >> how much ammunition is he giving him. there has been a growth in jobs, and then you see the flipside. many stop looking for jobs. long-term unemployment, still twice the historic average. how much fear is there on the democratic side that they are in threat of losing the senate. >> it's a good question. the fact is the economy is better. people don't feel the trickle down as they have in the past. it's not coming in jobs or changing,

i think the u.s. economy is going to be growing at about a 2% pace two or three years from now and if it's only doing that, it's going to be faster overseas. >> let me jump in. if the other student gets a d-minus, i look good by comparison. i'm not going to say the u.s. economy is going to boom. you heard europe. china has got a lot of concerns about their nonperforming loans number. the dollar trade against other currencies. isn't europe going to purposely drive the euro down? >> i think they've got more room for improvement. they've got room for improvement. we really don't. we're running out of capacity. that means that other countries will have faster growth rates in a few years than we have. >> david, i want to focus on current labor and the comments in the statement here. one of the significant things underlying policy here has been janet yellen's believe in a lot of slack in the labor market. the idea there was a low participation record and these people could be drawn back into the labor force by high

>> that is a big "if." >> the u.s. economy or the global economy? are both important, but i think the u.s. economy is important online i think we are living in two different worlds, the world of wall street and the real world. >> really? so last night after the daily hack yesterday which was just daunting, exhausting, terrifying, were there people who were planning to buy a coffee table, a couch, and an armoire at ethan out and saying i'm going to hold off or are they still going to buy? >> people are cautious. i would say the consumers cautious but somewhat optimistic. you are absolutely right what you just said. theseere to worry about daily swings, look at what is happening on wall street. this is becoming a trading business, so we have to look at it, but we really cannot take it that seriously on a day-to-day basis. i have to make decisions for the next one year, two years. we are now changing 60% to 70% of our product line. we are investing in the united states, which we're going to benefit two years, three years, four years from now. >> let's s

all of that has gotten the economy rolling again, despite the fact that the economies of many other countries around the world are softening. but as americans, we measure our success by something more than our gdp or a jobs report. we measure it by whether our jobs provide meaningful work but give people a sense of purpose and whether it allows folks to take care of their families. and too many families still work too many hours with too little to show for it. job growth could be so much faster and wages could be going up faster if we made some better decisions going forward with the help of congress. so our task now is to harness the momentum that is real that does exist and make sure that we accelerate that momentum, that the economy grows and jobs grow and wages grow. that's our challenge. when the typical family isn't bringing home any more than it did in 1997, and that means it's harder for middle class americans to climb the ladder of success. it means it's harder for poor americans to grab ahold of the ladder into the middle class. that's not what america's supposed to be about. it off

the federal reserve is giving the economy a boost. unemployment is coming down and the houseing market is on the road to recovery. given the sombre news from the eurozone, it's not hard to see that we may be headed for a growth gap between the two sides of the atlantic. >>> the european union is the biggest trading partner of the united states. what happens in germany and the rest of the e.u. matters on this side of the atlantic. we have to ask the question - when will europe's economic weakness take a toll on growth in america. joining us to answer that and other questions is matthew bishop, globalisationed tore for "the econ mist", when does it happened? >> a bright spot is a relative term. no one in america feels that the economy is powering on all cylinders. we are talking about the best of a bad lot. >> it's relative. >> it is. there's a serious concern about what is happening in europe will eventually take a toll on america. one of the things happening in europe is a lot of the people in charge of economic policy there is hoping

tom asked her about the u.s. economyarly one of the bright spots here and i look at the advanced economies, the u.s. tops out in much better condition. the u.k. does as well. clearly, on the investment and infrastructure front, more needs to be done. >> the imf will be releasing the growth forecast next week. >> very good. a lot to talk about. hong kong has been unstable for the last three hours. moving tick by tick. andrew davis has given us terrific perspective. p.m. of your:00 friday evening, what has changed in the last two hours? , thee tensions demonstrations this week have always swelled late afternoon as more people come down to the site. they have relief and today with the return -- they have really today with the return of the work week. dwindledrs have really in the commercial areas. those numbers of anti-occupy people really started to grow, particularly there. there now and they are pulling out students for their own safety. people have been trying to attack them. the images are very dramatic. this has heate

was the slowing economy? ripe for prophet taking? the possibility of a recession in europe triggered by the conflict between russia and ukraine. the seemingly endless threat of terrorism or another person infected in the united states with ebola. it could be some, all or none. if you don't know why this is happening you can't protect yourself. over the course of the next hour i will speak with economists and public health experts. and the man who wrote the book army general. today's dips and peaks in trading finished 1.4% for the day. the panic is rushing investors into bonds. talk about panic, boy, what a difference a month makes. it was only last month septemb september 18th to be exact, right there, when the s&p closed at an all-time high. despite volatility over the summer stock market observers were still talking about america's six-year bull run. but in less than a month's time the index has shaved 7.4% off its market capitalization. this is less than two points shy of the official definition of a correction. as of today the s&p

it's the economy. young women are not only thinking about now, but they are thinking about the fact that one day they might have children or be married. >> not only do though want them as voters both parties want young women candidates. but while women run for office now more than every a significant gap persists. according to a recent study, while nearly half of high school boys think about running for office, only about a third of high school girls. >> we've had training programs specifically for young women especially who want to get more involved in the political process and how to do that. >> the republican party is very diverse. for many different demographics. so as they outreach to young women it's important for them and for us to continue to propel and push and empower young women. and i can tell you that's what the rnc has been doing. >> you've been organizing at college campuses, the most important thing let's not forget to get millennials out to vote. they did vote in prior elections in the

every data point, negative, suggesting the economy there is just getting worse. there is also disappointment that the european central bank has not done more to stimulate the economy. they wonder if it is not turning into japan. the consensus was that the country was not aggressive enough on monetary policies or cleaning up zombie banks, or not aggressive enough in doing structural reforms to the economy. all of it is needed, and politics is part of the equation, if they don't get it under control soon, there could be a lot of tests coming for that continent. for "nightly business report," michelle caruso-cabrera. >>> and more on the wave that is keeping the possibles up and running, mary thompson looks at where the jobs are next. >>> more recalls yet again for general motors, this time involving over half a million cars and sport utility vehicles, the latest recalls are for cadillac and saab suvs to fix a rear suspension problem that could cause drifting at high speeds, and for chevy, to secure the hood from opening while the car is moving. gm told the dealers to

the more energy gets cheap, the better it is for our economy. >> y talk about the ice of creang -- >> it ts money in consumer's products -- pockets. it hasas not fallen enou to hurt domesticroduction. >> green lht, red light or yellow light for t company - economy? >> greenight. >> green light. >> i will say yellow light. one day my son came to me and said, "dad, let's go shoot some hoops." i couldn't play with him. i didn't have the energy, i was just so overweight. it just made mfeel like i was nothing. and then my sister introduced me to herbalife. i started drinking the protein shakes, she helped me plan out a more balancediet. i've lost 44 pounds. and now when my son asks me to shoot some hoops, i wear him out! find out more at iamherbalife.com thanks for joining us this week. we always s want to hear what yu ththought about the show. what is your take on the barbara comstock-john faust race? comment on our facebook ge. follow-up on twitter, or watch our past interviews at wjla.com. [captioning performed by the national captioning institute, which is responsible for its caption c

it was last year the american economy started to recover. person spending and housing sales picked up. in june, the fred chairman made announcement that surprised everyone. >> if the data a is broadly consistent with this forecast, the committee anticipates it would be appropriate to mad rat monthly purchases later this year. >> the message through global markets entered confusion. investors started shipping out of emerging economies and back to the u.s. volatility in financial markets made officials more careful about how to phase out monetary stimulus measures. another six months passed before they decided it was time to start scaling back. since then, they've been steadily winding down size of their purchases. in the middle of this year, they broadly agreed to end quantitative easing by october but only if the economy continued to recover. six years after they embarked on this drastic course of action, fed officials are finally reaching a point they can see the finish line. >> investors around the world trying to make out what the fed's an

is it a problem for the economy at this point? >> it would be if we didn't see that kind of job number we saw this morning. the job number makes me feel good and makes me feel we are a beneficiary of deflation around the world. this set of circumstances if i were in europe i would be trying to create jobs and be very concerned because it feels very 1921 over there. in our country we are a huge beneficiary of our natural resources and we have great job growth. our fed did see a lot of things coming. their fed doesn't see it yet. >> let's talk about the fed for just a minute. a lot of people would say today's job number was so strong that it now might emboldin the fed to move a little quicker. what do you think about that? or is that something that we in the media overtalk about? >> i think that we -- you always have to pay attention to things. i would say this. you can try to raise rates and it wouldn't matter right now. the rest of the world wants america. the rest of the world wanted our bonds and now want our stocks. if they take

the new normal economy is changing the traditional work schedule.s a chilling and draconian sentence... it simply cannot stand. >> its disgraceful... the only crime they really committed is journalism... >> they are truth seekers... >> all they really wanna do is find out what's happening, so they can tell people... >> governments around the world all united to condemn this... >> as you can see, it's still a very much volatile situation... >> the government is prepared to carry out mass array... >> if you want free press in the new democracy, let the journalists live. ♪ >> one thing that hasn't changed in the new formal economy is how hard americans work. we have a well-deserved reputation for being a nation of workaholics. get this americans work a whopping 42 days more than the germans each year, and while americans are among the world's most productive workers, more hours spent working doesn't necessarily mean more productivity that is one reason why more companies are experimenting with a four-day workweek. it has them saying thank god it's thur

so we're nowhere near out of this downturn of the economy. it has not created the jobs we need at the wages we need. >> when will we be at the downturn point? >> as soon as you see a major increase in gdp that extends for at least three years that will run 3 and a half percent or better. >> this isn't exactly news. we've been reading about the wealth gap, income gap, skills gap. this was a survey of well placed harvard graduates, business school graduates, and they pinpoint education is a problem. transportation infrastructure, job skills and political dysfunction. i think they should step up a little and start lobbying some people on capitol hill because government are not working. >> i read a book called the great betrayal. american corporations have gone out into the global economy and are doing great competing but they do well by getting rid of all these high paid american workers action getting these factories out of the united states, getting away from the regulations, and they're dumping behind america and they're going into the global

>> well i think this good news in the economy. i think today was good news both on the stock front and gdp numbers but i think it is too little too late. what i see when i look at those polls, gerri, complete condemnation of washington, compete. republicans will win on tuesday but it will not be, gerri because americans have great confidence in republicans. gerri: right. >> i think it is going to be because they feel there is breakdown in leadership in washington. they want to send a message. republicans are going going to l but i wouldn't be surprised, if some republican governor incumbents may go down too because people are holding these politicians accountable for the lousy way they feel. gerri: will republicans take the senate though? >> oh, yeah, i think they win eight to 10 seats. i think it will be a big night. it feels to me and looking at "real clear politics" polls every today. >> you're starting to see signs in this last week of a little bit of a wave to the republicans. and i wouldn't be surprised if this doesn't turn o

. >> some say the economy is recovering. ver, for our online community, they are very skeptical: so there sentiment that the system might be rigged. >> it was the most vicious hit to the u.s. economy ever since the great depression. the crisis resulted in 8.7 million jobs disappearing, an estimated $14 trillion in lost output, not to mention the millions of homes that fell into foreclosure, and from bank bailouts to out right buyouts, the feds and institutions have put forth various remedies. experts say we are recovering. but with atm, bank and the overdraft fees also at an all-time high, some say consumers may be getting the short end of the stick. so have we really addressed the systemic problems of the u.s. financial system that lead to the crisis in the first place? here with us on set is vice president for federal affairs, out of rich monday virginia, a former bloomberg business week writer, and host of the podcast. and from washington, d.c., senior fellow at the competitive enterprise institute a free market think tank

. >>> things don't look so bright for the japanese economy. we're joined now from the business desk with the latest on the economic situation. what can you tell us? >> good morning, catherine. analysts at the international monetary fund released their outlook, and things are looking rather gloomy for japan. the analysts slashed their growth forecasts for the country citing a strong reaction to the consumption tax increase. the ims world economic outlook downgraded this year's forecast for japan from 1.6% to 0.9%. the report said personal spending and investment have fallen since the consumption tax was raised to 8% in april. exports are sluggish as well. >> potential growth in japan is very, very low. and so the only way we are going to grow faster is by increasing potential growth. this is the chance of japan. >> blancheard unched the japanese government should ease the monetary policy. the annual growth forecast for the global economy was lowered from 3.4% to 3.3%. the report called the eurozone the weakest of the advanced economies. official