Charlie Rose

EPatrickMosman  07/21/2011 10:57 AM Report

If Mr.McMillion truly believes the New deal programs were so effective and "The problem was halting its economy-rescuing measures prematurely" isn't he admitting that the new deal"economy-rescuing" programs failed to rescue the economy and that the only solution was more and more government programs 'ad infinitum'.

Even Henry Morganthau FDRs Secretary of the Treasury,one who was there and deeply involved,apparently disagreed with Mr.McMillion as he said in 1939;

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot."

sheilabernard  07/17/2011 08:29 PM Report

Charlie, I recommend you interview Charles McMillion, author of the article "The 'FDR-Failed' Myth," which reads in pertinent part:

"The basic economic facts from the 1930s—according to the Department of Commerce, the Federal Reserve, and other official sources—are fundamentally different from the unsupported claims put forward by Shlaes and prominent in popular myth. The monthly data for industrial production show a near three-year collapse under President Hoover, ending when FDR came to office in March 1933. Production rocketed by 44 percent in the first three months of the New Deal and, by December 1936, had completely recovered to surpass its 1929 peak. GDP, only available as annual averages, plunged 25.6 percent from 1929-1932, including by 13.0 percent in 1932. It stabilized in 1933, and then soared by 10.8 percent, 8.9 percent and 12.0 percent, respectively, in 1934, 1935 and 1936. Real GDP surpassed its 1929 peak in 1936 and never again fell below it. After-tax personal income, consumer spending, real private investment and jobs all reached or surpassed their 1929 peaks by late 1936."

McMillion goes on to explain that the problem wasn't enacting the New Deal. The problem was halting its economy-rescuing measures prematurely:

"A second cyclical downturn officially began in May 1937 when FDR, always a fiscal conservative, mistakenly thought the economy had become self-sustaining and slashed public spending programs to balance the budget. These harsh and premature spending cuts caused another severe recession that ended after 13 months in June 1938....

"When the economy again contracted sharply in late 1937 and early 1938, FDR quickly reversed course and rapid growth immediately began again. GDP soared by 10.9 percent in 1939 and industrial production soared by 23 percent."

The charts included in McMillion's article demonstrate strikingly the connection between FDR's economic policies and the steady climb out of the recession.

Yes, World War II was undeniably an economic freight train barreling toward prosperity. But so, too, could be World War III: the war to end Climate Change before it ends us. The real goods produced, instead of tanks and other armaments, would be electric rail cars, solar panels, wind turbines, electric grid components, electric cars, bicycles and bike paths, light rail tracks within or above freeways, organic farms and gardens... the stuff dreams of pleasurable and sustainable human survival on this planet are made of.

Charlie, the myth that FDR failed must be refuted, and President Obama deserves the country's support in implementing the Green Deal.

louis777  07/16/2011 10:13 PM Report

The US has to go back to its origins. Immigration is what built this country. Since 9/11 this country has been on a decline due to the restrictions on immigrants.

Change the laws and offer 30M permanent green cards for a fee($50,000) a piece to select families who want to immigrate to the USA. They will come here and buy houses and cars and start more small businesses. They would be ineligible for public support like unemployment and SS benefits for years until they become US citizens.

These new immigrants would jump start the economy and bring more diversity to this country.

This policy would reverse the "close the doors" policy that has been in effect since 9/11.

tbo88  07/15/2011 11:42 PM Report

Overall, even though there is a lot of demand from everyone to purchase products, they can't right now. Either they are in debt themselves or they can't get credit from the banks because of poor credit. That isn't going to change until people realize they have to be more responsible with their money. This trickle up effect has finally taken place because it has reached Washington and we will see what happens before August 2nd. Summers actually is an economist. Geithner would say the same thing.

JohnGelles  07/14/2011 05:42 PM Report

1. "Why do conservatives, T-party-ers, and the well-to-do want to lower govt spending and lower taxes on income and wealth?" -- says Charlie Rose (calling the above types "Republicans").

2. "There is no reason to expect the rich upper class of today to agree to be taxed at the necessary level to increase Demand to the point where the economy can once more grow;

"..... and they own a stable of lobbyists, politicians and media companies to make sure that this never happens.

Perhaps they fear anything that smacks of Socialism.

"..... I for one fear more the evident drift toward Oligarchy/Plutocracy." -- says our colleague, aj617 07/14/2011 at 12:02 PM

==============

These two comments by the host of CR Show, and our colleague, highlight the issue of --

..... HOW TO FIND MONETIZED DEMAND IN THE PRIVATE SECTOR WHEN PROSPERITY REMAINS AROUND THE CORNER OR MISSING ALL TOGETHER?

Summers answers -- go to WAR (or PEACE) to kill Hitler OR to enrich the poor and protect the planetary environment.

aj617 does not disagree.

Both of them and me, and money cranks the world over, in their disregarded thousands, know that only government can SPEND THE TRILLIONS the private sector dare not risk and does not have anyway.

Governments with their own central banks empowered to issue a floating currency can match their NEW MONEY to future production of saleable necessities and even luxuries. Thus, it is only FEAR of hyperinflation that enslaves the working class and impoverishes the underclass when machines and machines that think stand ready to produce all we need if we spend the money to buy it up at a sustainable profit to private sector moneyed producers and credit worthy producers, alike.

Such production can also be provided by govt direct hire labor in nations with mixed economies and traditions that tend to minimize corruption at the top and all the way to the bottom.

The money cranks among us counsel at least a 50-50 split for the creation of new money between a fractional reserve banking system (like everyone already has) and a QUANTITATIVE EASING central banking system to encourage debt-free financing of production and middle class saving of cost-of-living indexed money by workers who must wait for shelves to fill before they spend all they earn.

Summers implied all the above but refused to say it for popular consumption. He is an academic and never learned to speak plain English.

Charlie Rose wants to follow not lead this nation to do the great things people like Tom Friedman cry for.

I cry for Charlie Rose. He may as well have died in France for all the good he's done so far. His bully pulpit is the closest thing we have to Walker Cronkite, Walter Lippmann or Edward R. Murrow today. But he is afraid of his shadow to -- he is afraid to take on the task of making sense of a full employment budget that is now well within our reach.

People are what they do -- if they can. If you can but the system let's you do nothing, you are nothing and all of us and CR are to blame.

aj617  07/14/2011 12:02 PM Report

Summers provided us with a helpful list of four basic areas in which

demand (backed by credit) may be expanded by government spending:

infrastructure and other public projects, subsidies or tax breaks for

important work (local gov't,autos), unemployment insurance, and promotion

of US products abroad. To this list perhaps a controversial fifth item should

be added: small tariffs on selected products to protect the US against unfair

foreign competition.

The model of total free trade is frankly overated and the benefits derived from

it have in some aspects run its course. Capital is presently free to abandon

whole industries in any country in favor of a lower-cost producer. A country

such as Greece, which cannot compete in ANYTHING successfully, is

seen to be stripped of anything of value that they might possess. Really they

would be better off sitting behind a protective wall of taxes that at least

preserves a few jobs. To some extent the dire straights of Greece are

replicated in the US. Disadvantageous "free" trade agreements have

permantly ripped the guts out of our economy during the last decade in

return for a brief period of bubble prosperity that is now over.

Summers pointed out that even with the New Deal in place, that the

Great Depression did not end until WWII, though of course it would have

been much deeper without such public projects as the Civilian Conservation

Corps. The rich upper class could have agreed to be taxed at a much higher

rate to provide more money for these public projects, thus greatly increasing

Demand across the economy as a whole, but they were disinclined to do

so for obvious reasons. Only when they became frightened enough of Hitler's

War Machine did they volunteer to open their wallets. It also became clear

in short order that wiping out the means of production of major competitors

would eventually increase their wealth greatly.

There is no reason to expect the rich upper class of today to agree to

be taxed at the necessary level to increase Demand to the point where

the economy can once more grow, and they own a stable of lobbyists,

politicians and media companies to make sure that this never happens.

Perhaps they fear anything that smacks of Socialism. I for one fear more

the evident drift toward Oligarchy/Plutocracy.

EPatrickMosman  07/14/2011 11:08 AM Report

While there was full employment in 1942 it was not due to FDR's New Deal.FDR's big government spending did little or nothing to end the depression as his Secretary of the Treasury said in 1939. The 19% unemployment of 1938 and 15% in 1940 ended as the millions of unemployed volunteered or were drafted into the military and

government spending went into real jobs in factories, shipyards producing planes, tanks, trucks ships,jeeps,guns uniforms, boots and other military needs.All guns, no butter. No monies for more welfare moms and unwed mothers, no monies for more government bureaucrats to ration healthcare, no monies for ACORN and other community organizers, no monies for spend thrift states to continue their profligate ways.

Good high paying jobs can be created immediately by contracting with GM, Ford,Chrysler, Caterpillar etc to repair, rehab and or build new tanks, trucks and other vehicles, building new plants if necessary.

Allow energy companies to begin exploration drilling for oil onshore and offshore, coal companies and power companies to construct clean coal facilities and coal to fuel plants as SASOL has in South Africa and allow power companies to start planning for nuclear powered plants as the lead times for containment vessels is over five years.End subsidies for ethanol and green energy as the Spanish rush into renewable energy showed that 2.1 jobs were lost for every green job created, a losing proposition. The most important and necessary actions for the government,are to stop demonizing businesses and treat them as the job creators they are,stop the EPA, the DOE, and other rule/regulation writing bureaucrats from issuing industry/job killing mandates, and to start creating a certainty on taxes and regulations so all business, large and small, can plan for the future.

JohnGelles  07/14/2011 05:09 AM Report

Rose and Summers, as I've said, pointed to --

(1) MONETIZED DEMAND (not the wish for products -- but the intention by a buyer with money in hand to purchase a product), as what was needed to achieve the recovery from the current financial malaise and create all the jobs, earnings and profits America so desperately needs, and

(2) WORLD WAR II's DEMAND that broke the back of unemployment caused by the Great Depression (which a decade of New Deal projects could not bring below ten million jobless souls).

These two pointed to clues that readers here, Americans everywhere, and our trading nation partners, must all fully understand, are obviously MISUNDERSTOOD by Rose, Summers, both political parties, and all critics, far and wide, who want to solve the DEMAND, DEFICIT, DEBT, and JOBS problems (imbalances) that threaten to embolden our rivals and speed the decline of American financial power on planet Earth.

Such MISUNDERSTANDING begins with the monetary system of production adhered to in fact by the major nations, corporations and businesses that supply the real global economy. That system uses CREDIT, MONEY, DEBT, LAW, PRACTICE AND FORCE OF HABIT, to sell the resources, plant, equipment, supplies, labor, goods in process and finished products -- without which you and I would have to return to marginal farming, fishing and hunting to stay alive.

All our necessities are generally sold for money. That same money is often deposited in accounts, or invested in financial paper or real assets. Taken together, the money and investments comprise global wealth WHOSE ELEMENTS IN RELATION TO EACH OTHER are revalued EVERY MINUTE OF EVERY DAY.

No element in the system, from gold coin to fried tomatoes, has an absolute unchanging price or value. Nothing STORES VALUE as well as the SYSTEM AS A WHOLE backed up with usable military power that can compel obedience to rational plans and laws.

At this point, America can create all the MONEY it can conceivably need and want BUT not MORE than the amount that represents a balance between our PRODUCTION of necessities and the REAL NEEDS of all our people and of our military forces.

The same is true for all other nations on Earth.

So, Summers and Rose, Obama must create the jobs to PRODUCE the goods, services, assets, results, etc., that we promise with every dollar we create for Americans and the rest of the world to accept in exchange for world class economic output.

If we say, Obama cannot do it -- only private for-profit producers can, -- then we are accepting defeat at the hands of producers who PRODUCE REAL THINGS, not paper or any "profit" based on metaphysical thought that carries no weight in the contest to survive international tests of military and political power.

What is POLITICS? How did that word slip into a discussion of REAL WEALTH and REAL FORCE?

..... It is REAL POLITIK the mysterious system of winning and losing that has run amok in today's America. It can negate all rational thought and short circuit all the past glories of empire lost and dreams (like the American dream) denied.

jason  07/14/2011 03:25 AM Report

love Charlie Rose' program.

last night, Rose had Tom Coburn representing the TeaParty view. this one is the liberal view albeit 27 minutes long vs Coburn's 15 minutes.

also, Summers was being less honest when he said he is an "economist", not a politician.

KansasEducator  07/14/2011 02:15 AM Report

The question according to Summers and Charlie Rose was "How can we create demand?" Oh, my goodness, is the emperor really still wearing clothes?

Hello!!! There is so much pent-up demand in this country that seems to go unnoticed by pundits, un-funded, and un-met! Unfortunately for the political and financial pundits, the demand is for not-for-profit, job-creating, socially-beneficial, services that these men in suits don't seem to recognize or value even when it's visible all around them. Sometimes I think we just need women at the head of our country! Women see this demand and can fill it. Men who don't have huge over-sized egos can also see it and can fill it.

For example, we have a huge demand for preventive health care to reach more people than are currently being served. Preventing lifestyle-related illness will employ a lot of good people and help prevent the bankrupting of our economy and decline of our society during the next 20 years during the aging of the baby boomers. By investing in preventing chronic disease rather than treating afterward with the most expensive options, we can save billions of dollars in unnecessary medical costs that are currently bankrupting business, government, and private citizens. These billions of dollars spent on lifestyle-related chronic disease are flowing to all those who treat lifestyle-related disease in a variety of ways. They seldom buy into prevention or tend to give it lip service. They are for-profit insurance companies, health care systems, insurance brokers who are paid by insurance companies, and many others employed in the giant Medicare bureaucracy including some who sell high-tech medical testing equipment, and expensive pharmaceuticals. Where can prevention be done? Everywhere that people are! How can it be paid for? On a sliding scale according to income.If every hospital and community hired preventive heath care workers to help baby boomers avoid chronic lifestyle related illness - we would save billions in health care dollars.

Reducing out-of-control costs that are bankrupting our country by investing in prevention - what a concept! Ben Franklin said "a penny saved is a penny earned."

Those who only think about how to make millions aren't concerned with pennies but the rest of us, especially those who need a job or would like to save money on healthcare are!

Where I live, we now have enough new roads and bridges! If we don't have shovel-ready infrastructure projects, let's consider investing in good health, and caring for our elders. Prevention jobs in every community. Healthy boomers, healthy economy!

Together with investing in health, investing in education and renewable energy would save our economy by providing jobs. There's plenty of demand just not a lot of profit, but that's OK. Updating our educational system and our competitiveness in the world, and protecting the health of our boomers, our economy, and our environment is more important than generating profit for shareholders - it's building a future - that's priceless!!!

JohnGelles  07/13/2011 10:32 PM Report

Summers and Rose would like to offer some words of wisdom to create the jobs we need to speed recovery and move on to again be the model for and leader of the free world's financial engines.

They did score two points:

1. Our problem is DEMAND. Without demand for profitable products the private business community will not grow their payrolls to rapidly reduce unemployment.

..... Implied in the above is a call for government contracts to supply essential products and simultaneously create the payrolls and demand our situation must have if we want to succeed -- to recover from the recession-depression that followed the bursting of the housing bubble.

2. In 1939-42, we found that the New Deal was too small to bring American industry up to par so that we enjoyed the monetized demand that monetary systems of production must have. By the end of 1942 full employment was the rule. Whenever we have less that full employment, personal suffering and business failures wreak havoc with society.

..... If we do not find ways to full employment and a mass produced supply of high quality necessities of life, we will no longer be a model for other nations. We will decline and fall -- and other wiser peoples will show us how to govern ourselves and do business in the modern world.

Barack Obama has turned out to be the president who had the best opportunity to change our nation from a collection of crooks to the land we were meant to be. He has failed miserably to do his job as President because he thought it was our job to do his job.

If the President suddenly saw the light -- and asked the American people to recognize that money represents production of world class necessities of life; and that machines and machines that think can help us to produce such output and create the money to buy it, at the same time, would anyone believe him?

If they did not believe him, would there be a better message for him to offer? I think not. But some of the commentators here seem to think there is a better message. Unfortunately, that better message is so self-contradictory its authors do not even attempt to put it into few words. They make it long enough to have no meaning at all.

tbo88  07/13/2011 09:50 PM Report

An excellent interview with Larry Summers. Charlie Rose finally got out of Larry what he was looking for at the very end of the interview. It is still supply and demand and how is that created. Mr. Summers made an unbelievable statement about FDR in that he would probably would not have been re-elected had it not been for WWII. I never knew that to have been the case. Strictly because the war effort provided jobs that wasn't happening in the 1st place. EPatrickMosman, you are exactly right. FDR would have failed and was failing badly because he didn't have a clue how to put people to work. Your bullet points about those receiving money or assistance because of robbing Peter to pay Paul is exactly the platform Obama ran on in 2008. He said it explicitly to Joe the Plumber. Go back and listen to what he says "If everyone has a chance to share in the same wealth as you Joe the Plumber than that is what my goal would be." That is exactly what Clinton's idealology was back in the 90's which then got us in the current crisis. He was successful with the economy, then got greedy in trying to go back to the Great Society proposed by Lyndon Johnson in the 60's. Everyone, I mean EVERYONE, should have a chance at a better life because we live in America. It doesn't work that way, in ANY society. There are always going to be the halves and halve nots. Whether you liked Clinton or not, take the party affiliation out of the equation, he did a pretty good job with the economy. However, his number 1 mistake, was getting involved with expansionism with the halve nots. Charlie just discussed this with Gretchen Morgenson in early June on her book Reckless Endangerment. In all, I believe Summers interview was very informative and again, I will repeat this until I am blue, because our country is so divided politically, take his affiliation out of the equation. As an economist, he went back historically to decipher what is and what isn't successful in a capitialist society and what he discovered allowed him to understand what is necessary to be successful from Washington so we can all benefit when the economy is working well.

robdverity  07/13/2011 05:00 PM Report

Summers promotion of the TARP bailout says it all. Be interesting to know how his gratuity was handled.

charlizecourriers  07/13/2011 03:40 PM Report

"Badly wrong" is a great way to start this Democrat party propaganda. I notice neither Rose nor Summers mentioned the UNFUNDED Obama medical care plan. It is the next BIG problem for the long term debt problem. Obama is stalling on the real problems so that he can get reelected. And if he is NOT reelected...

EPatrickMosman  07/13/2011 02:44 PM Report

Mr.Larry Summers was Obama's economic architect of today's disastrous deficit of 14+ trillion dollars and advocates now to continue increasing the deficit. His history of the Great Depression was distorted and contradicted by one who was there

Henry Morganthau FDRs Secretary of the Treasury in 1939

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot."

Several months ago President Obama produced a verbal draft of a proposed budget which increased massive deficits far into the future with absolutely no historic proposals to cut any spending programs. It was only words no specifics and certainly no restraint of spending. He also had control of both the Senate and the House and again made no effort to rein in spending just the opposite, adding trillions of dollars of debt to the deficit. Mr.Sommers paints the President now as a model of compromise when he showed no signs when he had total control of the Federal government. The President's position is purely political not economic, give me the money so the borrowing and spending can continue.

Further more Mr.Sommers continues the President's class warfare, antibusiness diatribe by bringing up corporate jets and company depreciation schedules, no doubt those of oil companies. The corporate jet rapid depreciation was specifically included in the first *800+ billion shovel ready" spending effort to shore up the failing aircraft industry and save jobs.. Now the President and Mr. Sommers are painting it as some kind of predatory big company perk that harms the old, the sick and the children. Depreciation schedules and other deductions are available to all international companies not only oil companies including GE, that paid no federal taxes last year, while oil companies contributed hundreds of millions to the Treasury.

It is said that President Reagan once said the most frightening words are “I am from the government and I am here to help you.” The industrial might of the United States did not result from government leadership but from the government getting out of the way of inventors, investors and entrepreneurs. The industrial might of the United States is slowly but surely being tied down by ill-conceived and unnecessary rules, regulations and mandates as surely as Gulliver was tied-up by the Lilliputians.

Henry Morgenthau's 1939 report on FDR's New Deal programs is being repeated as same can be said of the Obama administrations' borrowing, printing and spending trillions of dollars on 'shovel ready projects' that he President joked 'weren't so shovel ready."

Those who continue to advocate for more and more government spending and higher taxes obviously have never read or understood Santayana's words "Those who cannot remember the past are condemned to repeat it", FDR's big government programs failed to end the depression of the 1930s as any review of that period's economy history shows conclusively. However, tax cuts and economic incentives to the private sector introduced by Kennedy, Reagan and Bush brought ends to recessions and generated economic growth. Following FDR's failed policies for the past 18 months led to higher unemployment, has not produced job growth except in the public sector, more IRS agents to investigate working taxpayers, many of those are temporary, and for some unionized workers, GM and Chrysler. Saving public sector jobs by robbing from taxpayers like Peter and Patricia or borrowing from lenders like Ping and Pong to pay Paul and Pauline is not a sustainable path to create jobs and end a recession.

It is "Insanity: doing the same thing over and over again and expecting different results" Albert Einstein.

Feb. 5, 1976, Prime Minister Thatcher said, "...and Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people's money. It's quite a characteristic of them."

Or

"The trouble with socialism is that eventually you run out of other people's money [to spend]."or

"Eventually, Socialists run out of other peoples' money [to spend]."

These are possibly the 5 truest sentences you'll ever read, and describe quite well, the situation in

this country today:

1. You cannot legislate the poor into prosperity, by

legislating the wealth out of prosperity.

2. What one person receives without working for,

another person must work for without receiving.

3. The government cannot give to anybody anything that

the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it.

5. When half of the people get the idea that they do not

have to work because the other half is going to take care of them,

and when the other half gets the idea that it does no good to work,

because somebody else is going to get what they work for, that is

the beginning of the end of any nation.

As Norman Thomas , the long time Socialist party Presidential

candidate predicted:

"The American people will never knowingly adopt Socialism. But under

the name of 'liberalism' they will adopt every fragment of the Socialist

program, until one day America will be a Socialist nation, without

knowing how it happened."

tabs  07/13/2011 01:49 PM Report

The only way one could stomach listening to Larry Summers is to understand that listening to him is likening him to Obama as Mortimer Snerd was to Edgar Bergen. One posts this now because one will not be watching a second installment of Larry Summers.

doodah  07/13/2011 01:27 PM Report

I enjoyed and, more importantly, Learned some things from this interview, and always respect 'Larry Summers' view.

One size does NOT fit all, as the politicians try to PUSH. When will the electorate figure that out And STOP voting by Party. That mentality is totally Ass-uh-nine. And that's why we have derelicts like 'Mitch McConnell' in office fouling up the economy with his incompetent rhetoric; why should an idiot like him stop to think, when he knows he's got all the 'political power' he needs to continue thwarting the economy with redundant nonsense.

Some 'Americans' are ENJOYING this Recession/Depression a little Too Much.

REMant  07/13/2011 11:40 AM Report

I will defer criticism of this inanity until tomorrow (and I don't envy the poor soul trying to transcribe it), but shutting off the money and credit pipeline to Keynesians like Summers automatically means depression. And they may be right, because for the last 100+ years they have persuaded Americans and indeed most of the rest of the world that they can comfortably live off the exploitation of others in this way, and accordingly run the country into the ground. Their little game is finally up, but like Madoff they are far from repentant. And like Madoff's victims I don't expect anyone to be getting their money back.