he was constantly fighting with volcker. as a matter of fact, wanted volcker not to be reappointed which of course reagan did. he thought that volcker was inflation and growth on acceptsed, thaccept -- obsessed. he was wrong in some cases. b kemp was afraid volcker would raise the interest rates again and spoil recovery. he also thought -- reagan -- what passed was not pure kemp-roth. it was delayed, diluted and the whole idea was that the tax cuts would be an accelerator while paul volcker was pushing on the brake. somehow the accelerator never got down far enough which is what caused the huge 1983 recession. unemployment rose to almost 11% in one month. to answer the second part of the question -- i'm against term limits because we have term limits. every two years, if you don't like the guy or woman you've got, you can throw them out. it's in the constitution. all you are going to get a is a result of term limits is novices on capitol hill, career lobbyists, career staff aides, career bureaucrats, they're going to run the

paul volcker brings a miracle. everything is good for a while. the roleeviates from and everything falls apart. are there not a whole lot of other things going on? john: absolutely. monetary policy cannot do everything. the fed says that and i agree. it can cause instability. i think you look at the timing of those movements. if you look at different periods of history, different countries, monetary policy is powerful, for good and for bad. david: and your views was that if it was tighter in the 2003 to 2005 period, we would have had no crisis, no housing bubble, or a smaller one? what? comparison,y way of in 2003, the fund rate was 1%. inflation was about 2%. in 1997, the inflation was 2% and the fun read about .5%. two different inflations, two different periods. it is a big difference. a searchhat is part of for yield. part of the excesses. i always say it was not the only thing. i think there was regulatory oversight missing. but those together -- we never know for sure, but that is just the kind of thing people were talking about and that wa

you have people who are making a risk against the volcker rule and you have less demand on the buyingide and you have people who are less willing to get per -- gets aggressive. scarlet: there are a lot of structural changes to keep in mind here. what is interesting about this new round of a volatility is that more people are willing to take a risk here in the u.s. as compared to europe. tell us more about this. jared: a measure as to how expense of these stocks are is the spread, and the spread between that the stock a measure vvix showseasure and it is more of all in the u.s. than it is in europe. are going toyou have the fed hike and the ecb easing. speaking of the ecb easing, let's talk about china. what kind of market volatility options are you seeing their? -- there? jared: absolutely, the cost of has come in quite a lot since the market stabilized there. it is notable to bring up that we are seeing a levels that we really haven't seen before. it suggests that even though the equity kind of stabilized and is moving higher, and the expectations have been moving up, the stock optio

the other issue is on the volcker rule. they allowed a loophole that allows banks to invest 3% of capital in hedge funds and private equity's. she would eliminate that completely. also, reimpose what is known in washington as section 716, technical jargon. but there is a lot of big fights over where banks could keep their portfolio in their subsidiaries. this would remove it from their areas where they have insured deposits. those are the three key omens. not as big as breaking up banks are re-imposing glass-steagall keyhose are the three elements. the will start to address idea she is too close to wall street or can be outflanked on the left when it comes to finance issues. stephanie: welcome. christine, this is what blows my mind. to dig back into the vocal world -- the volcker rule. it took them a year and a have to to agree on what the term market making meant. now we want to get deep into hft? ruletine: the volcker component of this -- this is premature -- but it seems to be targeting the percentage they are allowed to

she's preparing to close a loophole in the volcker rule that allows banks, guaranteed banks to do someusiness now through hedge funds. she would close that loophole. she would review the swapped pushout rule that was struck down in budget legislation last year and finally she says she would reorient prurosecution an regulation of wall street so that individual executives would be more likely to be prosecuted than they have so far. after all, nobody from wall street went to jail as a result of the financial crisis. >> thank you so much. john harwood on the north lawn of the white house. >>> strike averted. the united auto workers and fiat chrysler reached a tentative new deal late last night. the agreement must be ratified by the automaker's 40,000 union members. neither the union nor the company released details but the union said it won big gains. >>> during a congressional hearing michael horn expressed remorse over the automaker's skirting of standards. as eamon javers reports, lawmakers were looking for more. >> the whole truth and nothing but the truth. >> reporter: it was a bruta

is causing another problem. >> you know the other part of your question was you know, around the volckert reduced inventories are affecting the bond market in ways we still have yet to really see. maria: something jaime diamond had written about banks forced to hold capital then not having capital to -- >> no problem but we are to broaden out a bit since you are overseeing so much money what do you see as biggest obstacle for u.s. markets forward changing interest rate environment changing political environment with 2016 or regulation. >> or regulation? >> kind of. >> all the above. >> you know -- our biggest concern going forward you know next 10 years is if you look at where we are at today, from evaluation standpoint equities are pretty highly valued if you look where growth is likely to come in we are likely to see over the next 10 years, equity returns, several hundt basis points below long term average, then we are in very low inflationary period some is separably but a classic 60/40 portfolio. >> 60% stocks 40% fixed income. >> our best guess you might earn a 5 1/2 or 6% on that,

another issue to look at is on the volcker rule. hillary clinton will be targeting hedge funds.lly how much banks can invest in them. at this point the level is 3%. she would eliminate that entirely. that is the financial regulatory side of the proposal. it is the regulation that will get most interest on the campaign trail. pimm: is this -- you take something, you give something away? go as far assn't her key opponents. if you look at bernie sanders or martin o'malley, who are on the democratic side advocating for breaking up the banks or free imposing the separation between commercial and investment banking, hillary clinton doesn't go that far. her team's point is that this is a more nuanced approach. if you have a strong volcker rule and keep banks from holding their swap portfolios in subsidiaries that kerry insured deposits, that is more effective in today's banking sector then re-imposing a glass-steagall. you will see similar things going forward. the big question that hillary clinton has faced from the left has been issued to close to wall street? close to wall street? t

paul volcker brings a miracle. the fed deviates and everything falls apart. aren't there a lot of other things going on at the same time? monetary policy cannot do everything and the fed says that and i agree. but it can cause instability. it can cause stability. if you look at the timings of those movements. if you look at different period's of history, and you look at different countries, monetary policy is very powerful for good and for that. andd: tighter in the 2003 2005. period. john: by way of comparison, into who thousand three, the file 2%. was in 1997, the inflation rate was inflation, 1.5%, the other .1%. it was a big difference. that was a search for yield. part of the excesses. i always say it was not the only thing. there was some regulatory oversight missing. put those together, and we never know for sure, but it is just the kind of thing that people were talking about. >> do you agree? i think monetary policy is second or third quarter. order.hird i would point to the -- they turned out to be toxic. i think we would have had a -- if i were to

evoke cancellation orders purchased trying to tighten up the vocal world -- the volcker rule.: go cubs. it will be fun to watch. phil mattingly helping out from washington. speaking over to -- speaking of baseball. we move on to something odder, soccer. mr. blatter suspended but fifa. i think it is a major-minor. mr. blatter suspended this morning. we will continue with james stavidis. this is bloomberg "surveillance" ♪ tom: good morning, everyone. bloomberg "surveillance" from new york city. right now we need to get to our news. here is vonnie quinn. vonnie: a warning from turkey's president erdogan. he called russia's military buildup unacceptable. moscow should consider its trade ties with turkey when it chooses to fire missiles at syria. turkey is unhappy about russian warplanes violating its airspace. u.s. warships will challenge china's territorial claims over part of the south china sea. the u.s. ships will sail inside a 12 mile zone that china claims. the move is likely to increase tensions between the u.s. and china. fiat-chrysler avoids what would have been a costly

paul volcker says today. we need to reinstate glass-steagall, and that's a huge difference between us. >> i'm with both senator sanders and governor o'malley putting a lot of attention on the banks. the plan i put forward would allow regulators to break up big banks if we thought they posed a risk. >> that said, the campaign made it known she would not would not proceeded it. joining me now, robert reich, labor secretary under president bill clinton and chancellor professor at berkeley. all right. i saw that response, and i you may be saying that now. it's a whole different thing when the chips are down as we learned when the actual crisis happy? do you believe that? >> we're not going to let the banks fail. they're much bigger now than they were the financial crisis, before they almost melted down the entire economy. the five biggest banks in the united states right now, before the financial crisis in 2007-2008, they had about 25% of all banks assets in america. now they've got 45% of all banks assets. the f

double-digit inflation, double-digit interest rates, paul volcker squeezing it all down.oceeded with his brand of economics to make the economy grow at double rate of mr. obama. that is empirical evidence. that is not analysis or opinion or what have you. liz: when you have the government is always answer and you have gridlock in d.c., becomes at the federal reserve is the first responder. you have to rely on the federal reserve to basically fix the problems of the country. that is not a good place to be in. >> no it's not. one of reasons europeans can't recover. europeans have lots of disincentives to work. portugal has 40% of youth unememployment because youth won't take jobs. that is why seven million men 25 to 54 for doing nothing. unemployment pays. liz: professor, really appreciate it. coming up tech on fire these days. apple tv relaunching one day ahead of apple's big earnings release tomorrow. that could shake the markets tomorrow. microsoft's surface tablet being shown. microsoft opening a flagship store six blocks away from apple. microsoft taking the fight righ

volcker, general, thank you very much for the perspective.preciate it. >> thank you. >> thank you. >>> investigators are turning their attention to the mother of the college shooter in oregon. in online postings she professed her love for beguns, wrote about her son's disorder but did she know just how troubled he was? the latest, next. ♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck. tit's amazing.. this is amazing. that's amazing! real people are discovering surprising things at chevy. we're sold. it's so pretty. beautiful! it feels great. perfect. this is not what i would expect from a chevy at all. get more than you expect for less than you imagined. the 2015 models are going fast. find your tag and get cash back for 15% of the msrp on select 2015 vehicles in stock. or, get zero percent financing for seventy-two months on most remaining 2015 chevy vehicles. right now, at&t is giving you 50 percent more data. that's

we worked up to volcker. it collapsed. we lived through that. many people in this room lived that.e have come down with a great moderation. we have enjoyed the last seven years. where are we now in that continue on when we observe odd things? mathematically i would say -- folks, we need math on the radio. a lot of curves like indonesia, we have brazil. other challenges of the united states. where are we right now within that equilibria? ray: the united states is in the midpoint of its short-term debt cycle. as in utilization, gdp gap. as a result, we are talking about whether the fed should tighten or not. that is what central banks do. we are near the end of a long-term debt cycle. because that cycle of being able to raise -- you have interest rates going to zero. you have spreads that have come down. those spreads that have come down means that asset prices have gone up. in other words, so now, the expected return of asset prices are all very low. cash, we know bonds are 2.25%. you know what you will get the next 10 years. 2.25% on your bonds. the equity price premiums look like

think about the volcker inflation. we saw a sharp rise in real interest rates but a fall in inflation. this might tell you that the market interest rate is an overestimate of the natural rate. because inflation. inflation is falling at the same time. so their estimator builds this kind of information in. and i think this is a major advantage of this approach. i won't say too much about this. we only have a few minutes left. an equation linking the metro real rate to natural rate of growth, which is unobserved. but they estimate that. and they find their coefficient which responds to the inverse of the sigma, the aelasticity. very much in line with what economics believe. and their reading growth is rather important but less than half of what's going on. and they have this variable z which covers everything else. i just want to sort of show you something that jim stock calculated and generously shared with me. even if you use a univariate approach, if you look at long-term fluctuations there is a case a that growth and

that slow crash played to us until ronald reagan and paul volcker came to the scene and broke down the garbled mouth full. and they had no idea to fix it. the inflation was run away and jobs and the economy and growth were going nowhere. the prime rate went up 21%. think about that today. 2% of month for most borrowers. our economy was crushed. the only way to bring the fever under control was to nearly bankrupt the country. they raised the prime rate higher and higher, crushing manufacturing. crushing automobiles, chrysler went bankrupt, crushing the building trades, crushing everything that required borrowing in order to grow. by 1983 the fever had broken. the fever had broken in the form of structural redistribution. what had basically happened was inflation dropped to 3%. the problem is for the middle class that relevant inflation. for all the moderation of inflation did not go down. what does it have to do with the middle-class? middle-class life meant a new house, new car, healthcare, a college for your kids, retirement and the belief that your children were going to be better of

in volcker persuaded him that this was something that he should invest his money in, that newark was verge of a revolutionary change in education and that his $100 million could make the difference. there really wasn't a tremendous amount of due diligence. the way booker presented to him was almost like a startup of a tech company that, we will have a proof point in newark, find five or six things that we can do here that will transform education, then we can take it every city in the country, every inner-city that has struggling schools, and zuckerberg as a philanthropist could spend the rest of his philanthropic life changing urban schools for the better. juan: you talk in the book about how this was an attempt, as much of what is happening in education is today of reform from the top down. of a few people coming up with a plan, finding the finances and then imposing their will on all the other stakeholders in the system. could you talk about how that played out in newark? >> it sounded like it would play out pretty easily because chris christie as the governor controlled the schoo

hedge funds -- preventing banks from putting 3% of their money into hedge funds, a loophole of the volckern if they weren't allowed to do that, it'd be small potatoes. increasing the statute of limitations from 7 to 10 years? come on. it ain't happening anyway. liz: specifically for the high frequency trading, seth, spoofing issue does start to look a little dicey. they're submitting orders and then suddenly canceling them once the herd follows. it almost lures people in. do you see anything manipulative about that? because she does and feels that once you fix that part of it and maybe tax canceled orders that look suspicious, then you clean up hft, high frequency trading. >> yeah. there are lots of things that are bad on wall street and lots of things that can be cleaned up. the thing that concerns me about this proposal is that it's so micro, it's so narrow in focus, and there's so many other issues that can be tackled, have to be tackled. it's like putting your finger into a dike, and all these other leaks are happening around you. >> right. >> what i would like to see from a presidenti

ambassador to nato curt volcker said russia's tactics in syria are something we've seen before. >> it sounds very familiar. it sounds very much like what we saw in ukraine where russia denied it was doing anything inside ukraine, but maybe there are a few volunteers when in fact what we saw was a russian led, russian trained, russian equipped and russian manned military operation that first took over crime mean i can't and now very active in eastern ukraine. i think it's going to look similar in syria. the only thing i would give credence to russian statements is where they don't want it to be a largeriesable regular russian military operation. they want to keep it smaller, more special forces. they want to keep it more flexible and on the front lines, they have hezbollah there, they have the assad regime's forces. they have help from iran, so i think they don't want to have russia in the principal role in the front lines because that could create backlash inside russia, but every other form of support including personnel we'll find there. >> two russian fighter jets violated turkish

presidents meet with fed chairmen all the time, i was in a lot of those meetings with reagan and volcker so, presidents have influence on fed policy, all right? influence, not over. you make a good point. i want to see them speak to the country about the dollar and interest rates. i think it would be a great thing for cnbc to do. you know what? no one's asked them about the fed and if we don't, no one will. >> that's true. >> you certainly, larry, have the pedigree to do it. we'll all be watching. hope it goes well. larry kudlow there. coverage tonight of the debate starts at 5:00 p.m. eastern only on cnbc. >>> up next, shares of twitter plunging on stagnant user growth. invests not happy with what the company was saying on the conference call. more "squawk on the street" when we come right back. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holida

if you look back at volcker, it was a much stronger performance. i wonder if that would change where we are. we are where we are and janet yellen has the job. >>> when we come back, the take on the markets from mark cashin. we'll look at futures. this is the fourth straight disappointment on nfp and the sixth in seventh months. >>> here's a look at futures, decidedly negative after a good premarket. investors were not counting on the miss we got on jobs. 142, well below the 200 expected. let's bring in art cashin. i doubt you were surprised. >> not much. a couple of things. if you look at the trim tabs data, it hinted it would be a lower number. if you looked at the six-month moving average over the last year, it's been decelerating. people have overestimated what the payrolls will be time and time again. i think i've -- i've been saying i didn't think the fed will raise rates this year. i still don't think they will. >> i wonder about the market reaction. there are those who believed if they told you it would be this low a number that would state

if you look at this plan what she wants to do with dodd-frank, the volcker rule is pretty meaningless what she wants to do. the aspect she wants to tweak is not a big deal. and the end of proprietary trading. there is part of that that says you can't put 3% of your assets into a hedge fund, they don't do that much anyway and if you can't put 3% it won't break the bank, there is stuff about extending the statute of limitations from seven years to ten years. like i said. >> so you could rein in an executive. the firm is fine. >> one thing where she puts a tax on high frequency trading, it is a very small part of the market and those guys vote for high-frequency traders, particularly certain trade where they do what is known as the fake trade. i won't get into the details but the upshot of this thing for the viewer is when she says she is tough on wall street when you peel back the onion this is weak tea. neil: the former morgan stanley ceo telling me not too long ago to ignore all the anti wall street, now she is the one toppling the 1% the week it go far enough. >> to me it is all poli

also strengthening the so-called volcker rule.y tradiy commercial banks and calling for a new tax on high-frequency trading. the context for these new proposals from hillary clinton, we are less than a week away from that big first democratic debate. full frontal attack on wall street is essential to her chief rival, bernie sanders. this is a topic that you can expect him to be talking about extensively when the candidates meet next tuesday night. now clinton hopes she'll have something to say on the subject, too. now, all of this as we say while joe biden is finalizing his plans and the rest of the elm dids prepare for that debate next week, meanwhile, republicans are continuing to watch donald trump. he's going to be in las vegas for a big campaign rally later today. trump was in iowa on wednesday where he got a glimpse at what "the washington post" is calling his second act. well, the republican front-runner says he doesn't plan to change his confrontational style, he did go out of his way to defend his closest rival, ben carso

my favorite donald trump an dote is that powell vaul volcker is chair he admires most. >> steph?ah, maybe he can get some cleansing spray for his hands so he can shake more people's hands? i don't know. >> john, i guess in the art of the comeback he said shaking hands he thinks is one of the curses of american society. >> when you think about it, kelly, one of the other candidates in the predebate photo session or when they get together at the beginning, could really psyche him out by putting something on their hands when they shake. you know? could really throw him off his game. >> already trying to set up this debate for fireworks. i see it happening. thank you so much. >> we're going to have a great time. >> i'm thinking. thank you, john. john harwood, appreciate it. >>> your money, your vote, october 12828th on cbs. >>> we're getting more on the shares. >> we got headlines here on micron guidance. let me give you the headlines. of 20 to 26 cents for q1 versus estimate of 37 cents on the street. i'll quickly clarify that. on the call company's executives said seem to imply tha

[laughter] >> maybe that same day or at another meeting the same year, paul volcker was here and we wentover and had a few drinks and jim tobin came and i remember-- this is 1982, difficult time and i remember very well jim asking paul, why don't you lower interest rates, paul. paul said, i don't set interest rates, i set the money supply and the market reacts to the interest rates this would've ended the conversation right and which is a whole interesting issue, but this was also a cross roads period, if you will. a time where the fed was turning, i think, and it's somewhat related to where we are now. i think what he was able to do with his colleagues is turn the fed from a very discretionary stop go, go stop policy, which was destructive with both inflation and unemployment rose in the economy didn't do well i basically change. it was tough. it was a crossroads during that tough time. i think this experience, plus all the research that people have done has led me to the conclusion that we really need to strive to some kind of a focused rules -based policy because actually that is what

the scope of activity, the volcker rule,= -- industryhas made the safer.ou heard brian moynihan. deepak narula, what do you think? deepak: it is a lot less risky than what it was. is it too risky? at this stage we are probably getting to levels where capital holdings of various banks seem to be fairly high. what kind of stress tests are you trying to solve? erik: i think lehman brothers is the stress test you are trying to solve four. deepak: i think we are heading in the right direction. the amount of capital banks hold will continue to go up if that is the metric you are trying to judge banks by. banks willso maybe be ok. at the end of the day when the market turns, is someone always left holding the bag? ranks are going to survive. if you think about where people money, areed their we going to see insurance companies and pension funds, are they going to get hit? or we say let hedge funds go down? hedge fund investors are individuals. in a game of money transfer, can everyone win? thanks will be ok, someone else is going to get hurt. deepak: for sure. th

directive -- the volcker rule, directive from e.u., independent commission on banking refines and, do think we have less regulation? the political leaders, not just the regulators, will ensure that we do not have too big to fail again. megan: is seven years since the height of the crisis. if we had a major calamity in one of the world's leading investment banks, there is no way the taxpayer -- stephanie: what could the calamity be at this point? they are not taking that much risk. megan: morgan stanley had huge bets in asia, we learned yesterday, which we did not know they had. i remember david at goldman 'schs, everybody balance sheet was affected. bob: i am going to say it proudly. we never took government money at barclays. every quarter was profitable. we never had a fear of not having deposits. jamie it is interview with you, stephanie, yesterday said the same types of things. it is about the management. we are coming back to the same issue about, how do you protect the larger -- tom: cash on the balance sheet. thank you, tom. we have bob diamond with us for the rest of the hour.

frank and the volcker rule aggravated this pressure, even though you are talking equities, even though longer can investment banks cushion the blow. it.: that is the biggest issue out there is the lack of liquidity. everybody, sort of, does not want to focus on it, but whether it is on the equity side, the realsaid he, when you have sellers, prices really move down debt, when you-- have real sellers, prices move down really quickly. stephanie: but that is because regulators and politicians do not trust banks. that is how we end up in this place with new regulations. marc: i agree. do you think that is going to change? no. that is why we are where we are. david: it puts downward pressure on the price. in anyhe problem today market is if you are not right, and if you're not right short-term, you will be in a lot of trouble. no one has any patience anymore for being a long-term investor. i could say invest with me and or three years, and if i am down after six months, what you do --i am out. does this make steve schwarzman, and the rest of the private equity committee, have this extraordi

volcker and christie added to this plan to expand charter schools and radically restructure district schools. they thought they would arrive within five years with a proof point that zuckerberg with his philanthropy could take to cities across the country solving the education crisis and all of urban america. as we all know that did not happen. mark zuckerberg didn't end up spending $100 million in newark and as a result of charter schools have grown to serve 40% of newark children and more than a third of newark district schools have been closed renewed relocated face doubt repurposed redesigned were taken over by charters. the stresses on the schools are enormous. most of this process is taking place without public participation because philanthropy for all the good it does is one of the least democratic institutions in american life. privately appointed boards decide where the money goes. people aren't happy with the philanthropy of bill gates or the walmart heirs were mark zuckerberg they can't vote them out. there's no product to boycott the marketplace. the staff of the foundat

that wiped out millions in jobs and savings for families and we are still just as vulnerable paul volcker>> for viewers at home, glass-steagall is the depressionry banking laws repealed in 1999, prevented commercial banks from investment banking. senator sanders wants to break up the big banks. you don't. you say continue to monitor them. why is your plan better? >> of course we have to deal with the fact that the banks are too big to fail. we can never let the middle-class failures bail out the speculative activity that we saw. but we have to worry about aig, a big insurance company, lehman brothers, an investment bank. there's this whole area of shadow banking. that's where the experts tell me the next potential problem could come with. i'm with senator sanders and governor o'malley. the plan that i put forward would empower regulators to break up big banks if we thought they posed a risk. but i want to make sure we're going to cover everybody, not what caused a problem last time but what could cause it next time. >> senator clinton just said her policy is tougher than yours. >> well, t

. >> the key thing to realize, because when volcker circumstances liquidity is down some point i thoughtay markets dysfunctional try borrowing in liquidity are they seeing that anyone talk about this. >> a great point there is an interesting study in august about october 15 last year, treasury rates, when the market was left to volatility the point in this report hft's principal traders stayed in the market when banks were bailing these are guys you want in the market and you don't want disincentives i think cancellation good issue to be talking about. but you know, in markets every day making prices better more efficient effective o. maria: i think an really important point what you said earlier we are having this discussion ongoing about liquidity, if you are taxing liquidity and your putting anything in the way of liquidity in markets that is going to be a major problem. >> you know what it is proven not to work over and over again, they tried in it switzerland had market migration all over the place, they have tried a number different places even tried it in u.s. years and years ago,

paul volcker says today. and that's a huge difference on this stage among us as candidates. >> o'malley is a former mayor and former governor. so, gentlemen, do you think this debate lifted him at all? >> no, i do not think it lifted him at all. it did display, however, exactly who he is and what he is about. it shows he's probably four to six years from being a real national figure. >> governor, what do you think? was this a moment for him to rise or wutz was he showing good audition as vice president? >> i think he presented himself calmly and with poise. if you're a hard left person in the democratic party you're with sanders and if you're with an establishment wing of that party, you're with hillary clinton. who's going to peel off either faction to go with jeannie oohm o'malley? in that regard, there isn't a rationale for his candidacy at this point. >>> still ahead, the man who wasn't at last night's debate. joe biden. is that window for potential run from him closing? we'll hear the vice president's re

see rising inflation, then, ronald reagan has to come in, slow things down were, the help of paul volcker did well in run-up to that, during the -- >> depends. >> we are going to leave a massive amount of debt after what has been an economic recovery last seven years. >> propriety. >> what happens, you know. >> but i don't think dealing with that is going to slow the economy down. i think we are at full employment that is basic fact if you look ahead we're not going to have very strong growth because we no longer have that excess labor to absorb. >> wait a seconded don't we have evidence that in fact smaller government and environment that is positive and encouraging business and encouraging to business does in fact create jobs encourage businesses to hire more people we do have evidence of that. >> yes but i would say at this point we've -- we've hired the people we are going to be hired, of course, there are new people joining the labor force every year every month. you have to have an economy that will absorb them. but basically, at 5.-- excuse me at 5.1% unemployment, there isn't a lo

volcker rule eliminated principals trading. and the law of unintended consequences. stuart. something expecting one outcome, it's an organism that adapts itself in a way that creates things that you don't necessarily like. stuart: but it's very hard to explain the opposition to that tax in a one liner that grabs people. much easier to say get those people. >> and donald trump, rail on the hedge fund managers and simple points. stuart: it's a plus for hillary clinton, isn't it? a good answer. no, question a plus and she is a focus group candidate. she just switched on the tpp for that reason as well. so she-- she's got a great weather vane and her approach to winning the presidency is to follow where the wind spins, it's spinning in the direction against wall street right now. stuart: stay there with us, i know you're here for the hour. one hour from now watch the whole interview with dr. ben carson in this program. i'm staying on this, kevin mccarthy taking heat for this clip. >> everybody thought that hillary clinton was unbeatable, right? but we put together a benghazi spe

came out 1979 jimmy carter, same kind of bipolar setup and democrats and republicans were like-- volckerg to take the pain 1981 recession and-- >> a tough period and a glorious long period after that. you've got to take your medicine. >> charles, how do we get the growth up-- >> you get out of the way. the government is not the answer. >> absolutely. maria: get out of the way. >> the government has been in the way so long people don't know where to go. maria: that's the key point and we're seeing that through labor participation, right? >> it's the lowest level since 1977. people have given up the size of our work force is shrinking. now, that's where i talk about there's some disconnect here, we're saying we have all of these job openings, we need employers, corporations out there to innovate and to hire and to add to the work force. we need to get the word out there, also, that there are jobs out there and there's lots of opportunities and people need to start participating in the work force again. >> by the way, they're going to watch the market and say, oh, my god. and you actually a