MR. DAVID GREGORY: This Sunday, a special focus on the economy.
PRES. BARACK OBAMA: Our work is far from done.
MR. GREGORY: Is this a jobless recovery?
PRES. OBAMA: Even though we've reduced the deluge of job losses to a
relative trickle, we are not yet creating jobs at a pace to help all
those families who've been swept up in the flood.
MR. GREGORY: More than seven million jobs lost since the start of the
recession. Unemployment at the highest level in 26 years. Is the
president's new jobs package the answer? Our exclusive guest, White House
economic adviser Dr. Christina Romer.
Then, the road ahead. Where will the new jobs come from? What will get
businesses hiring again? Is the economy headed for another downturn
before it recovers? A special discussion with former chairman of the
Federal Reserve Alan Greenspan; the host of CNBC's "Mad Money," Jim
Cramer; Democratic governor of Michigan, Jennifer Granholm; and Mitt
Romney, former governor of Massachusetts and presidential candidate in
the 2008 campaign.
Then our MEET THE PRESS MINUTE. President Obama on the world stage,
accepting the Nobel Peace Prize while at the same time leading a nation
PRES. OBAMA: I know there's nothing weak, nothing passive, nothing naive
in the creed and lives of Gandhi and King. But as a head of state, sworn
to protect and defend my nation, I cannot be guided by their examples
MR. GREGORY: The Reverend Martin Luther King Jr. appeared on this program
one year after he received the Nobel Peace Prize and talked about his
commitment to nonviolence in the face of injustice.
MR. DAVID GREGORY: But first we're joined by White House economic adviser
Dr. Christina Romer.
Welcome back to MEET THE PRESS.
DR. CHRISTINA ROMER: Great to be here.
MR. GREGORY: The president taking stock of his first year in office and
an economy still very much in turmoil. He spoke in his weekly radio
address yesterday and talked about who ultimately is to blame. He had
some tough words for Wall Street. Let me show them.
(Videotape, December 12, 2009)
PRES. BARACK OBAMA: Even as we dig our way out of this deep hole, it's
important that we address the irresponsibility and recklessness that got
us into this mess in the first place. Much of it was due to the
irresponsibility of large financial institutions on Wall Street that
gambled on risky loans and complex financial products, seeking short-term
profits and big bonuses with little regard for long-term consequences.
MR. GREGORY: Is Wall Street to blame, as the president suggests?
DR. ROMER: You know, I think there's a lot of blame to go around. But
absolutely, we know that some of the practices that happened on Wall
Street did set us up for what was a very severe financial crisis, and we
are all still paying the price for what went on on Wall Street.
MR. GREGORY: And is the reality, the price, jobless recovery?
DR. ROMER: You know, what the reality so far has been is a very severe
recession, and that is what we have been fighting against. The drying up
of credit absolutely has had a tremendous impact on Main Street, and we
know it's had a particularly big impact on jobs, that we've lost more
jobs even than you would have normally predicted given what's happened to
GDP. At this point, though, I ought to emphasize how much things have
changed, right? If you go back to this time last year, we were losing
half a million jobs a month. In January it was 700,000 jobs a month. What
we learned in the last employment report, we're basically holding flat on
employment. That's not good enough. We want to be having robust job
growth. But it certainly is a--is a big change.
MR. GREGORY: Let me stick with Wall Street for just a second. The House
just passed financial reform, sweeping financial reform. Had these rules
been in place, would it have prevented the financial crisis?
DR. ROMER: You know, that is certainly the goal as we're setting up
financial regulatory reform, is exactly to do what Franklin Roosevelt did
back in the 1930s, give us a rules of the road that will protect us. That
one protected us for about 80 years.
MR. GREGORY: I know, but it's not just a goal. Would it have worked?
DR. ROMER: Yeah.
MR. GREGORY: Would it have prevented the crisis?
DR. ROMER: Oh, we are certainly--I think it is--you know, you could never
say anything for sure. I think it's a much better set of rules of the
road. Obviously, as we're going to be going forward and working with the
Senate and finally getting a bill, there are things that we can improve
and strengthen. But it's absolutely a much better set of rules of the
MR. GREGORY: The president said in an interview on another network that
Wall Street still doesn't get it. Goldman Sachs decided instead of paying
out big cash bonuses, that they were going to do all of that in stock. Is
that an improvement, or do they still not get it?
DR. ROMER: It's certainly an improvement. You know, there is just a
fundamental disconnect, right? We now--you know, the American people had
to take extraordinary actions to back up Wall Street. It was the right
thing to do, because we are all linked to that. But, you know, now Wall
Street's doing a whole lot better and Main Street is still suffering. And
so, you know, that's why the president is going to have the bankers in
tomorrow. We're going to be talking about a lot of things, like what are
the responsible actions they can take to get lending going again to small
businesses, to deal with compensation practices that encourage risk
taking, to make sure that responsible homeowners can stay in their home?
And those are all things we're going to be talking about.
MR. GREGORY: But when the CEOs do come to the White House tomorrow, the
president--sounds like he's going to be blunt and say, "You're part of
the problem here."
DR. ROMER: I think he's also going to say, "You're going to be part of
MR. GREGORY: Right.
DR. ROMER: Right? That "we're going to do everything responsible that we
can, you've got to do everything responsible that you can."
MR. GREGORY: But here's, here's--you talk about the disconnect between
Main Street and Wall Street--even though it's a bit of a misnomer,
because the two are really connected in terms of the credit flows of this
country. The question is whether just because Wall Street is doing well,
and you see there's executive comp rules that went into place this week
where you have top employees capped at $500,000 in, in the companies that
got the bailout money, is the goal here to simply punish Wall Street?
DR. ROMER: The goal has certainly got to be that, as we go forward,
we have a system that's more efficient, that works better for the
American people, that doesn't get us into this mess again. The, the other
thing we have to talk about is making sure that the American taxpayer is
made whole, right? That we have had to take extraordinary actions, the
TARP legislation that, that was so crucial in, in shoring up our
financial system. I think the president feels very strongly that the
American people have to be held harmless.
MR. GREGORY: But doesn't the president want these companies, even if
they're getting bailout monies, to be profitable, to return to
profitability without any impingement on their competitiveness?
DR. ROMER: Of course we want them to return to profitability. We want
them to return to lending.
MR. GREGORY: Right.
DR. ROMER: We want them to return to doing--as you described, they are
linked. They're the circulatory system of our economy. We know that's
MR. GREGORY: Let's--I want to talk about jobs more specifically. A lot of
focus on getting people back to, to work. How long before unemployment
falls below 10 percent?
DR. ROMER: Well, you know, we, we were very encouraged last--the last
jobs report, when we saw the unemployment rate tick down. Again, I got to
emphasize, you know, how the change that we've seen, say, in GDP growth,
where we were just plummeting at the first quarter of this year, we're
now growing again. I'll tell you what most private forecasters are
telling us, is that GDP is going to continue to grow, if anything is
going to accelerate. Most of them are talking about positive job growth
sometime in the first quarter. So what usually happens is GDP starts to
grow, then employment starts to grow, then finally the unemployment rate
starts to come down.
MR. GREGORY: Does--well, does it go--does it get worse before it gets
DR. ROMER: You know, these things certainly do bounce around. I would
anticipate some bumps in the road as we go ahead.
MR. GREGORY: It might go up again before you think it comes down?
DR. ROMER: It could well. I mean, especially if you talk to a lot of the,
the analysts, what they say is actually once we start to recover, the
chance that some of those seven to 10 million people that have become
discouraged workers, dropped out of the labor force, they may well come
back in, and that would cause it to go up a bit. But then, you know, once
we're firmly growing again, once employment growth is again--coming
again, we will see the unemployment rate start to come down.
MR. GREGORY: When is the recession over, do you think?
DR. ROMER: You know, there's the official definition, and that talks
about just when do you turn the corner, when do you go from plummeting
to, to finally starting to go back up? And I think we have, at least in
terms of GDP, reached that point. But I think the president's always
said, and what I firmly believe, you're not recovered until all those
people that want to work are back to work.
MR. GREGORY: So in your mind, this recession is not over.
DR. ROMER: Of course not. We have--you know, for, for the people on Main
Street and throughout this country, they are still suffering. The
unemployment rate is still 10 percent. That's what--that's why the
president was talking this week.
MR. GREGORY: Right.
DR. ROMER: He wants to get it down.
MR. GREGORY: The unemployment picture has been grim for a long time, and
the predictions were dire a year ago. Jared Bernstein--who as you know,
of course, is the economic adviser to the vice president--said this in
December of 2008: "We'll be lucky if the unemployment rate is below
double digits by the end of next year." Again, this is '08. "Even if the
economy improves, the growth won't be enough to rehire laid-off workers,
much less absorb those coming into the labor force." Kiplinger, in
February of this year, had this report: "We know what a jobless recovery
feel like, but this will be more painful. ... `It will take a recovery in
automobiles and housing for the manufacturing sector to once again
prosper,'" that according to Norbert Ore, chairman of the Institute of
Supply Management Manufacturing," in a survey that was done. "And
prospects for rebounds in those sectors are dim until 2010 or beyond,
despite the federal government's gargantuan efforts to stimulate the
economy." The warnings were there. Why didn't this administration, this
White House attack unemployment sooner?
DR. ROMER: Well, first of all, I will tell you that within the first
month of taking office we passed the biggest, boldest fiscal stimulus
package in history. We had a comprehensive financial rescue package, we
had a housing package. We hit this thing with as much as we could get
through Congress and as well as we could do.
MR. GREGORY: And you thought that stimulus would keep unemployment to 8
percent, and it didn't. It didn't work.
DR. ROMER: I will be the first to say I didn't have a crystal ball. And
certainly I think, you know, what we learned--we learned...
MR. GREGORY: Well, you asserted that you did in, in the report,
suggesting it would keep it to 8 percent if it was passed. There was an
attempt to forecast.
DR. ROMER: Yeah. We--well, of course people have to forecast. What I'm
saying, not having a crystal ball, is I don't know the future. I--we're
making an educated estimate. The fundamental thing is that the first
quarter of this year, no question, was worse than basically anyone
anticipated, and that this economy did really come to the edge of the
cliff and, and start to go over. And precisely because of the actions
we've taken, we have walked it back. The important thing, though, is over
the summer, over this fall we've continued to take actions. We had the
Cash for Clunkers program, we've extended the first-time homebuyers
credit. And that's really what the president was talking about in his
speech this week; what are the other steps that we can do? What are the
appropriate actions at this point?
MR. GREGORY: Would it have had more of an effect on the economy if the
stimulus money had been released sooner? Only about 20 percent of the
money's been released.
DR. ROMER: Well, you've got to be so careful, because think about all of
the--you know, about a third of the fiscal stimulus was a tax cut. That
went into effect almost immediately. A big chunk of it was aid to people
that had been directly hurt by the recession: the unemployment insurance,
COBRA, aid to the states. That went out almost immediately. We always
knew that the part that would take longer is the direct government
investments in infrastructure...
MR. GREGORY: Mm-hmm.
DR. ROMER: ...and smart energy. Those have also been going out quickly.
But they were also always part of the plan for 2010, because we knew this
was a very severe recession, would take some time to, to fix it.
MR. GREGORY: And in those initial discussions about stimulus, you
advocated a larger stimulus, at least 1.2 trillion. That figure was never
even taken to the president. Was that a mistake?
DR. ROMER: You know, the president certainly knew that this was a very
severe recession. I remember going back and looking at my notes. We had a
meeting with the president on December 16th last year, and I remember
what I said was conditions are grim and deteriorating fast. He knew that
this was serious, he knew that we were all deeply concerned.
MR. GREGORY: Right. Yeah, but my question is about the size of the
stimulus. Do you think it should have been larger? You thought that at
the time. Was it a mistake not to take that larger figure to him?
DR. ROMER: No. What we were talking about is what's the range of options.
And all public policy is a mixture of what are the, the, you know,
possible effects, and what can you actually get through Congress? And I
feel confident we got the best package that we could through the
MR. GREGORY: Well, now you're talking about another package getting
through Congress, the idea of something that would specifically stimulate
job growth. And there's been some discussion of even using that bailout
fund, the TARP, to pay for this. The LA Times pushed back hard against
this idea in an editorial, and it kind of synthesizes some of the
criticism. I'll put it on the screen. "The administration should explain
why the massive amount of money already approved to simulate the economy
isn't sufficient. After all, most of it hasn't been spent; according to
the administration's Recovery.gov Web site, only 20 percent of the nearly
$800 billion has been handed out as of Oct. 30. And if more funds really
are necessary, the administration should find a way to raise them without
exacerbating the federal deficit, which hit $1.4 trillion in the fiscal
year that ended on Oct. 31. The idea of converting bank bailout funds
into jobs programs might have populist appeal, but the returned TARP
dollars aren't new revenue. They're borrowed money, and we should be
thankful we can pay” it back—“so much of it back."
DR. ROMER: You know, what the president has said, we inherited two
problems: a huge jobs deficit and one that was growing, and a huge budget
deficit and one that was growing. What he has said is we absolutely have
to attack both of those. On the jobs side, everybody knows you're never
going to get your budget deficit under control if you don't get the
economy growing again. And that's why what he's been talking about is not
just government trying to get people working again, it's the government
helping to jump-start the private sector. We know that that’s what's got to
On the fiscal side, we know that the actions that we take are likely to
be more effective if people have confidence that we will get that
long-run budget deficit under control. And that is what the president is
committed to doing. I got to tell you, he has shown that commitment in
the debate that's going on on the floor of the Senate on health care.
MR. GREGORY: Right.
DR. ROMER: Because he has been the most passionate, effective advocate
for genuine cost containment, and that is a crucial step we can take
right now to get the budget deficit under control over the long run.
MR. GREGORY: But is it still his view that, essentially, the government
must spend its way out of the recession rather than attack the deficit?
DR. ROMER: He has never said--what, what he has said in his speech is
that now, at this stage in the recovery process, some targeted actions
like investing more in infrastructure, in tax incentives for small
businesses to hire and to invest, for incentives, say, to get homeowners
to retrofit their homes, those are targeted actions that we can take
right now that can help to jump-start the private sector job creation.
MR. GREGORY: Government spending is necessary before attacking the
DR. ROMER: You're going to--it, it's a parallel process.
MR. GREGORY: Right.
DR. ROMER: At the same time we are taking important actions to put people
back to work right now, which is good for the deficit...
MR. GREGORY: Right. But you're not addressing...
DR. ROMER: ...we also are going to be...
MR. GREGORY: ...how it's going to be paid for. Are taxes going to have to
go up in order to pay for another government stimulus?
DR. ROMER: You know, what we're certainly going to be doing--you know,
the, the, the news that we got on the TARP, all right, no one's talking
about taking the TARP and literally using it for infrastructure. But the
fact that we discovered that we, through good stewardship, are going to
have substantially lower losses, some $200 billion more going back to the
federal Treasury, tells us that there is the space to do what we have to
do for the American people. One in 10 are out of work at this point in
MR. GREGORY: Right. But, Dr. Romer, my question is, will taxes have to go
up for the government to pay for additional stimulus?
DR. ROMER: What is absolutely true is, as we look--I mean, first of all,
no one's talking about raising taxes in the middle of a serious
recession. That would just be...
MR. GREGORY: So how do--how you going to pay for it?
DR. ROMER: ...bad policy. I--what...
MR. GREGORY: You're going, you're going to use TARP money? What are
you--how you going to pay for it?
DR. ROMER: What you're going to be doing is looking at the--you know,
everyone knows that in the middle of a crisis you don't do a major fiscal
consolidation. That would just be suicide. That's not what you do for an
economy that is struggling to come back from the first--from the worst
recession in post-war history. What the president is committed to is
putting forward a plan for getting that deficit under control in the
medium and the long term. Healthcare reform's going to be a part of it.
We're going to have to be working with Congress. It's going to have to be
a bipartisan effort. We inherited--let's be clear, we inherited a huge
problem. It's not--it was years in the making. We are going to have to,
you know, be the responsible people and step up and deal with it. The
president is absolutely committed to doing so.
MR. GREGORY: By this time next year, where will unemployment be, in your
DR. ROMER: Well, I'm--I feel confident it'll be on the way down. As I
said, we've talked about how there will, you know, very likely be further
rises before it, it comes down. You know, what I feel confident is, is
that we're on the right trajectory. And I think what the president has
committed to is doing all that we possibly can so that number comes down
much more dramatically, because that is ultimately what we have to do.
MR. GREGORY: When do you expect you will be able to say the recession is
DR. ROMER: Well, I'm not going to say the recession is over until the
unemployment rate is down to normal levels, until...
MR. GREGORY: Which would be?
DR. ROMER: You know, again--are you asking me, you know, timing?
MR. GREGORY: No, what's a normal level?
DR. ROMER: Well, the normal, you know, where we were before the recession
is sort of in the--certainly in the 5 percent range. That is, you know,
what Americans are, are used to.
MR. GREGORY: Can that be accomplished in a year's time?
DR. ROMER: Well, it--we'd have--I think we're going to--it's going to
take--you know, this recession took a long time coming, it's going to
take a long time coming out. We can make incredible progress. We can get
that unemployment rate coming down. The--you know, the whole key is not
just, you know, growing again. We've got to grow robustly. That's how you
get a lot of job creation, that's how you get a lot of progress on the
MR. GREGORY: Dr. Christina Romer, thank you very much. Continued good
luck with your hard work.
DR. ROMER: Great. And congratulations on your first-year anniversary.
MR. GREGORY: Very kind. Thank you very much.
Up next, when and how will all those Americans searching for jobs get
back to work? Our special discussion continues here on jobless recovery.
Alan Greenspan, Governor Jennifer Granholm, former Governor Mitt Romney
and Jim Cramer. Plus, our MEET THE PRESS MINUTE: War and peace on the
world stage for President Obama, and the connection to this MEET THE
PRESS guest in 1965, one year after his Nobel Prize win. Only on MEET THE
MR. GREGORY: Is the road ahead a jobless recovery? A special discussion
with Alan Greenspan, Jim Cramer, Governor Jennifer Granholm and former
Governor Mitt Romney after this brief commercial break.
MR. DAVID GREGORY: We're joined now by CNBC's Jim Cramer and former
chairman of the Federal Reserve Alan Greenspan, as well as Michigan
Governor Jennifer Granholm and former Massachusetts Governor Mitt Romney.
Great to have all of you here today. And it's an important discussion,
this focus on jobless recovery.
Dr. Greenspan, I must say, there are some mixed messages coming from the
White House economic team this morning. Larry Summers says everyone
agrees the recession is over; and yet, you have Dr. Romer saying, "Not so
fast. This recession will not be over until we're out of this jobless
recovery." What do you say?
DR. ALAN GREENSPAN: Well, those are two separate concepts. And economists
will say the recession is over, because what is measured is what's
happening to economic activity. And it's very obvious, certainly in
retrospect, that the bottom was in July, maybe even June. There's a
different issue, however, is when the economy is restored to normal, and
that's what the president's talking about. In other words, merely having
gotten by the bottom is not all that terrific, because, by definition, at
the bottom is when things are worst.
MR. GREGORY: Hm.
DR. GREENSPAN: Worse off. And the result is that you still have a long
way to go before you get more normal characteristics in the economy.
That's what the president was talking about.
MR. GREGORY: Jennifer Granholm, Governor Granholm in Michigan, I don't
have to tell you how hard the situation is, with over 15 percent
unemployment in your state. Is this a jobless recovery?
GOV. JENNIFER GRANHOLM (D-MI): You know, David, this week I was at a--the
announcement of the Volt vehicle, the, the new General Motors vehicle
that's going to be an all-electric plug-in, in the, the boundaries of the
city of Detroit. That would not have happened were it not for the Obama
administration and the commitment that they've made to the auto industry,
to new technologies to make the electric vehicle. So those jobs--you
better believe, for those people who work on that line, whose jobs are
now safe and will be there for awhile, it's not jobless. But for the 15.1
percent of Michiganians who don't have a job, they are still looking. I
can tell you though, David, as governor of the state with the highest
unemployment rate in the nation, who has been disproportionately affected
by the restructuring of the auto industry, it would have been so much
worse if we didn't have an administration that cares about manufacturing,
that cares about having an auto industry. These companies would have been
MR. GREGORY: Governor Romney, why is it that companies are not investing,
that they're not hiring?
FMR. GOV. MITT ROMNEY (R-MA): Well, companies are going to hire if
there's additional purchases that require them to, to staff up and to
beef up and to start their production lines. People have to be buying
things. And unfortunately, what the president created with this $780-plus
billion stimulus plan was something which grew government but did not
grow the private economy. In fact, in some respects, the, the work that's
been done by The Washington Post recently points that out. It shows that
there's, there's 10 times as much spending per person in the Washington,
D.C., area as there is in the nation at large. This is not going to be a
jobless recovery. The economy will come back, the private sector will
grow again. But it has been a jobless stimulus. And, and that's
unfortunate, because the president had an opportunity to focus on the
economy, to create jobs; but instead, Nancy Pelosi and Harry Reid created
something that, that stimulated government.
MR. GREGORY: You know, it's interesting. I mean, some people would, would
hear that and say that's a partisan view, Jim Cramer. But the reality is
that there are people who say, "Well, what if you got this stimulus to
take effect sooner, you got more than 20 percent of the money actually
paid out?" The president this week said that Republicans seem to be
rooting for failure; and yet, it was Republicans who, at the outset of
the stimulus debate, said, "What about a payroll tax holiday? Let's do
something to prime the economy faster."
MR. JIM CRAMER: I don't think that--when I talk to CEOs, and I talk to
dozens of them for my show, no one has seen it. I keep asking, "Where's
the money? Have you seen any money coming from Washington?" Even
companies that are involved with road building, the most elementary
aspect of any sort of stimulus, are saying, "No, this is the first
quarter that we may have seen a trickle." So I agree with you, David,
this--the stimulus is not helping create jobs. And that's not Republican
or Democrat. I just don't see anything beyond municipal and state worker
MR. GREGORY: Dr. Greenspan, let's stay on this issue of jobs, and, and a
bit of a historical perspective here. There's a very interesting
chart--which we'll show in just a minute, but let me set it up
first--which compares the depth of job loss in this recession to that of
the recession in 1981 to 1983. And let's put that graphic on the screen
and you can see it. The red line, '81 to '83, and the black line is 2000
to the president--present. The, the end point there on the graph on the
right shows that, at this point in the recession in the early '80s, you
had seen a return almost to not 100 percent employment, but back to where
it had started. That's almost a V. Whereas you look at the depth and the
duration of this recession and the job loss, it's a much darker picture.
What does that say to you about what recovery's going to look like and
how long it's going to take for unemployment to come down below 10
DR. GREENSPAN: Well, first of all, the reason that we're looking at such
a disparity, difference is that in the current period, it's very apparent to me that
business got very frightened when the crisis occurred and presumed that
the economy was going to go down far more sharply than it actually did.
Indeed, I think Dr. Romer was making much the same point. What this means
is that we have a level of--a level of employment at this stage which is
barely adequate to staff the level of output, and that it seems to me
virtually inevitable, if nothing else were to happen, that employment
would start to come back fairly quickly. That's not the same thing as
saying that the unemployment rate is coming down, for two reasons. One,
it takes 100,000 a month of employment increase just to stay even. But in
addition, as Dr. Romer pointed out, as the economy improves, you're going
to get a number of people who are not seeking jobs, meaning they're not
in the labor force, who will now start to come back, and that will make
the hurdle as to bringing the unemployment rate down quite difficult.
MR. GREGORY: Is that to say you think unemployment goes up before it
ultimately comes down?
DR. GREENSPAN: I don't know. But what really concerns me, David, is that
38 percent of the total unemployment are those unemployed more than 27
weeks; and indeed, a significant part of that is a year or more. These
people are losing their skills, and it is very critical that those people
have the skills when the economy comes back or we will not be as
productive as we'd like to be.
MR. GREGORY: And, Governor Granholm, that gets to a point that I, I've
talked to people, you know, on, on, on my staff and outside about what
jobs are coming back? How much are these jobs going to pay? Are they
going to be the same kinds of jobs or, as Dr. Greenspan suggests, because
of the, the skill disparity, they're not going to be very good ones?
GOV. GRANHOLM: Well, I think it's very clear these are not going to be
the same kinds of jobs. There is no doubt that the--I mean, I just give
you my Michigan perspective on this, but the traditional manufacturing
jobs, which have repetitive motion, we know that a lot of those have gone
to India, to China, to Asia. But we, we know we also need the investment
in a level of skill, as Dr. Greenspan said. And let me--I have a prop. So
this is today's Detroit Free Press, which I was reading. This is a fellow
who runs a, a, a--used to run an auto supply company, and now they're
making wind turbines. And the workers, who were auto workers, are now
making wind turbines and they're all employed. It's a slightly different
MR. GREGORY: Mm-hmm.
GOV. GRANHOLM: ...but machining is required. So part of the stimulus,
though, David, allowed for us to reconfigure our whole training system,
and it makes something called No Worker Left Behind where people are
being trained for specific emerging sectors in the economy. So you have a
skills gap that has to be filled. The stimulus has helped us to do that.
And we have an economy that's in the middle of a massive transformation.
So both need to happen; you need to stimulate those new technologies and
you need to train the workers for that.
MR. GREGORY: So, so, Governor Romney, then, what about this new jobs
package from the president, who says, in effect, we need more stimulus,
additional stimulus to specifically help the private sector start hiring
GOV. ROMNEY: Well, I think, first of all, he's admitting that what he put
in place at the beginning of the year, almost a trillion dollars of
stimulus spending, hasn't done what it was intended to do. He predicted
that if they put in place that bill, that they would be able to hold
unemployment at 8 percent or below. It's gone to 10 percent, and that's
what they said would happen without their bill. So it was a failure. So
now they're trying to change it. It's been a year, and obviously that's
an extraordinary failure.
But secondly, the, the right course here is not to create a new stimulus,
but to fix the one they've already passed. So let's take that money
that's been allocated to all sorts of government programs that aren't
necessary and they're not growing the economy, and let's instead focus
that on efforts that'll actually create jobs: an investment tax credit,
allowing businesses to expense capital expenditures in the first year,
reducing the payroll tax. These kinds of things will get jobs growing
immediately. And the TARP money, the TARP money that's being paid back,
don't put that under more government. Give that money back to the, the
investors, if you will. Give it back to pay back the debt, get the
government debt off the books. We have to show the world that we're not
going to keep growing government and borrowing more and more money. Pay
back what's been borrowed, the federal deficit.
MR. GREGORY: But you--but, Jim Cramer, you know, the--you heard Dr. Romer
say, "Look, we've got to grow the economy before we start attacking the
deficit." And you also hear from inside the White House, wow, all these,
you know, calls by Republicans to deal with the debt. You know, where
were they when George W. Bush was president? What do you say about that,
what the priority ought to be?
MR. CRAMER: Well, I think the priority ought to be get rid of the agenda.
I hear the agenda over and over again from business people. In other
words, Congress is stalled on health care. I favor universal health care,
everyone does in this country. But Washington is killing job growth,
not--and then trying to stimulate it small scale? How much does it cost
to bring a new employee in? We don't know. We don't know what the health
care will be. We don't know what the tax scheme will be. Washington is at
the root of many of the problems of why you should hire here. The CEOs I
talk to, they're hiring. They're hiring in Brazil, they're hiring in
Russia, China. Why are they hiring in those countries? Because it's
steady, we know what to get from the government. It's a rather, it's
rather quizzical that we know what the communists'll give us but we don't
know what the capitalists'll give us.
MR. GREGORY: This is an interesting question about our role in the world,
how the rest of the world sees us, our commitment to capitalism and, in
corporate America, Dr. Greenspan, the notion of where is the certainty?
Washington is a big question mark now when it comes to climate policy,
healthcare policy. A lot of businesses saying, "Look, we don't know
what's coming down the pike." There's no impetus to grow, to expand, to
DR. GREENSPAN: That's the key problem; that is, investment occurs when
you have a stable economy and when you can foresee what's going on in the
future. Because, remember, you make a risky investment which may have 10
years or 15 years life to it, and unless you have some semblance of a
notion as to what is out there...
MR. GREGORY: Hm.
DR. GREENSPAN: ...you're going to be reluctant to invest. And that is
key. I mean, I agree with Jim in this respect. I think it's very critical
that we get the uncertainties out of the system.
MR. GREGORY: Do you think additional stimulus for jobs makes sense at
DR. GREENSPAN: No. I think what is missing in this whole discussion is
that the--what I presume to be the major source of the recovery, and that
is the remarkable increase in the amount of stock market wealth that has
occurred in the last six to nine months. People think stock prices are
just paper profits. They are not. They create real purchasing power and,
most importantly, they create a fluidity into the financial system which
is the reason why even though banks are not lending freely at this
particular stage, they are solvent and the problems that we had six to
nine months ago have disappeared, because essentially $5 trillion worth
of increased equity is pouring into the economy. And you can see it in
the retail sales figures. 401(k)s, for example, have increased by half a
MR. GREGORY: And yet the president says Wall Street's to blame. He just
said it in his radio address. Is that the wrong message?
DR. GREENSPAN: Well, the problem is that there is an issue here, namely
that this is a bivariate type of economy.
MR. GREGORY: What does that mean?
DR. GREENSPAN: It means that, it means that...
MR. GREGORY: Don't try to slip that in here where we can't understand
DR. GREENSPAN: Well, it's my old Fed...
MR. GREGORY: Exactly.
DR. GREENSPAN: It's my old Fed speak coming back.
MR. GREGORY: Exact--old habits, yeah.
DR. GREENSPAN: I can't break the habit. Look, there were two economies
here, which is very unfortunate. The economy is being driven in a
positive sense by big business and wealthy individuals. Small business,
small banks and a very significant part of the unemployed are not
prospering. I'm particularly concerned about where the job machine is
relevant to small business...
MR. GREGORY: Mm-hmm.
DR. GREENSPAN: ...which are doing miserably. They're getting--have great
difficulty financing and great difficulty in creating jobs.
MR. GREGORY: Governor Granholm, how do you see this divide which, you
know, been sort of boiled down to Wall Street vs. Main Street? Because
the president does have a problem: Wall Street's gotten healthy again,
Main Street has not. And you're, you're seeing it, Main Street all over
GOV. GRANHOLM: Yeah. And this--I mean, so much of that has to do with the
fact that there is so little access to credit both for homeowners who
want to refinance and for small businesses. This issue of the tightening
down of credit requirements on the part of banks have made them extremely
paranoid. And therefore, especially...
MR. GREGORY: But I thought we wanted tougher rules.
GOV. GRANHOLM: ...in our state, where we've got...
MR. GREGORY: I thought we wanted more oversight.
GOV. GRANHOLM: Well, we...
MR. GREGORY: I mean, I thought this was a good thing.
GOV. GRANHOLM: And I think that's--yeah. But to then block--you get--give
the banks all this money and then block it so much that money can't go
out, and the whole purpose is to get the money out the door.
MR. GREGORY: Mm-hmm.
GOV. GRANHOLM: And that's what the president is talking about. We have so
many auto suppliers who want to diversify into defense, into green and
clean technology products, but they--even though they've had great credit
and have always made payroll and they have always made their bank loans,
they cannot get a loan. That is wrong. So that's the next step that the
president intends to address.
MR. GREGORY: Right.
But, Governor Romney, I've spoken to bankers this week who say, "Look, we
do have programs in place." This was a, a banker at a very healthy U.S.
bank. "We do have big programs in place to lend. There isn't the demand
out there, because small businesses don't want to take a risk right now
on the venture, on the ultimate enterprise that they would--want to get
GOV. ROMNEY: Well, you still have, in this country, a lot of concern, a
lot of fear. We, we vacillate, during economic cycles, between the
euphoria and the optimism of the up cycle and then the fear of the down
cycle. There's still a lot of fear going on. And, and one of the reasons
for that is that the, that the government is, is attempting to play such
a, an extraordinary control role over various sectors of the economy that
people are very, very concerned. That's certainly true in health care;
people see the government potentially changing the rules there, taking
over almost one-fifth of the economy, that scares them. The financial
services sector has to be terrified after what they saw over the weekend
come from Congress. And so as a result of this kind of overreaching by
government, people are pulling back. What, what you're going to have to
do is free the private sector to do what it always does, which is to
recover from this recession, to start hiring people again and providing
the opportunities that particularly those in small business desperately
MR. GREGORY: Let me turn to another question about the role of
government, and that is the role of the Federal Reserve. Dr. Greenspan,
Paul Krugman, liberal economic economist for The New York Times
columnist, wrote this this week about what the Fed ought to do: "There's
also," he wrote, "I believe, a question of priorities. The Fed sprang
into action when faced with the prospect of wrecked banks; it doesn't
seem equally concerned about the prospect of wrecked lives. And that is
what we're talking about here. The kind of sustained high unemployment
envisaged in the Fed's own forecast is a recipe for immense human
suffering--millions of families losing their savings and their homes,
millions of young Americans never getting their working lives properly
started because there are no jobs available when they graduate. If we
don't get unemployment down soon, we'll be paying a price for a
generation." Does the Fed have more to do?
DR. GREENSPAN: I think the Fed has done an extraordinary job, and it's
done a huge amount. There's just so much monetary policy and the central
bank can do, and I think they've gone to their limits at this particular
stage. And you cannot ask them to create more than is physically
possible. They, they stopped what essentially was a major financial
collapse by interposing sovereign credit for private credit for
commercial paper, for essentially blocking a number of problems which
emerged especially, incidentally, in conjunction with the Treasury, the
so-called TARP program, where they put capital into banks.
MR. GREGORY: Mm-hmm.
DR. GREENSPAN: I thought at that point was essential. The difficulty is
there is a limit. And if the Federal Reserve does not, in fact, pull in
all of the stimulus it's put into the economy, then down the road is
inflation. It's a long way down the road and it's not immediate. But the
question is, you cannot ask a, a central bank to do more than it is
capable of doing without very dire consequences.
MR. GREGORY: Are you worried about the Fed's independence?
DR. GREENSPAN: Very much so.
MR. GREGORY: What do you think the consequences of some of the
legislation on Capitol Hill are now?
DR. GREENSPAN: If, in fact, specifically, they take away the amendment
that was passed in 1978 which prohibited the GAO, the General Accounting
Office, from auditing monetary policy, if that is removed, I think that
will very significantly compromise Federal Reserve independence. And what
you will be getting is a monetary policy more dedicated to political
short-term considerations, not to the longer-term considerations which
the Federal Reserve Act was specifically constructed to do.
MR. GREGORY: Jim Cramer, let me ask you about something on a slightly
different level, which is the U.S. role in the world. There's a lot of
other countries who are pretty down on the U.S. right now, as, as we've
talked about. And the president talked about the role that the U.S. plays
in, in the world. He gave a speech expect--accepting his Nobel Peace
Prize, during which he said this, and I'll put it on the screen: "I face
the world as it is, and cannot stand idle in the face of threats to the
American people. For make no mistake: Evil does exist in the world." And
yet, recently, just last week when he rolled out his plan for
Afghanistan, he said there are limits to what the U.S. can do to factor
in national security. This is what he said then.
(Videotape, December 1, 2009)
PRES. BARACK OBAMA: We fail to appreciate the connection between our
national security and our economy. In the wake of an economic crisis, too
many of our neighbors and friends are out of work and struggle to pay the
bills. So we can't simply afford to ignore the price of these wars.
MR. GREGORY: The question is, can we do both? Can we stand up to evil and
also be mindful of the balance between an economy in trouble and wars
that are being fought?
MR. CRAMER: We tried it in the '60s, didn't work so well. That's the guns
and butter Lyndon Johnson period. I feel very strongly that the, the
notion that we have enough money to do all these things is also at the
root of some of the paralysis that's in business. People talk about the
deficit as if it's, "Well, there's nothing we can do." Obviously, if
we're going to finance wars around the globe, we have to cut back or
raise taxes. Your questions to Dr. Romer were right. Taxes have to go up
if we're going to continue to finance and the rest of these countries
around the world are not going to help.
MR. GREGORY: Governor Romney, our role in the world here. The auto
companies going through bankruptcy; and yet, we find out this week that,
in fact, the Chinese are buying more cars for the first time more than
GOV. ROMNEY: We can compete around the world, there's no question about
that, David. We have the capacity to do that. The American workers are
the best in the world, our technology is at the leading edge. America,
long term, can be the, the powerful economic engine it's always been. But
the real threat right here is something that Alan Greenspan just said,
and that is that if we don't take action to rein in the scale of
government and the growth of government spending and the compensation
levels of government workers--you saw government workers, average
government workers, are now making $30,000 a year more than the average
private sector worker. These kinds of excesses and the massive deficits
that, that, that government is putting in place, over a trillion dollars
a year for these coming several years, this threatens our long-term
viability, because it, it, it suggests that we could have runaway
inflation. And, and the Fed and the federal government are going to have
to rein in, pull back from what have been the excesses of these past
years, Republican and Democrat. It's not a partisan issue, it's a growth
of government issue. And it's got to stop, or America's future could be
very much in jeopardy.
MR. GREGORY: Dr. Greenspan, where are we next year? Where is unemployment
in December of next year?
DR. GREENSPAN: It's going to be lower. You know, we're going to get a
special bonus that nobody really expects in the fact that the bureau of
the census announced that it's going to employ 792,000 workers by April.
That's a big--it's not a huge number, but it'll take several 10ths of a
percent off the unemployment rate. The unemployment rate will be
significantly lower a year from now. But between now and then, largely
because of people coming back into the labor force, almost irrespective
of how much employment expands, the unemployment rate will probably stay
high. I don't think it will stay at 10 percent, but it's not going down
very quickly or very dramatically.
MR. GREGORY: You talked about the role of the Fed. What about interest
rates? Do they have to stay where they are?
DR. GREENSPAN: They can't, in the sense that over the very longer term
it's pretty obvious that as the economy begins to pick up and as loan
demand begins to pick up--remember, loan demand has been very dull,
because businesses are very heavily liquidating inventories.
MR. GREGORY: Mm-hmm.
DR. GREENSPAN: That's coming to a halt. And when that happens, loan
demand will come back and the pressures on short-term interest rates will
begin to grow.
MR. GREGORY: Governor Granholm, I want to give you the last word here,
and that is a question that brings all this home. What is the
psychological impact on our country of this kind of jobless rate and the
effects of this kind of recession? You're seeing it every day up front.
GOV. GRANHOLM: There is no doubt that people are angry and frustrated,
and certainly there is a pullback on spending as a result. But, David,
you know, I think that we've got to, as, as leaders, be projecting
confidence in the steps that we are seeing. And truly, there have
been--there has been progress.
MR. GREGORY: Right.
GOV. GRANHOLM: Dr. Romer said in January we're losing 700,000 jobs a
MR. GREGORY: Right.
GOV. GRANHOLM: Last month it was 11,000. So there is progress, there are
signs of hope. We can't be all about doom and gloom.
MR. GREGORY: All right.
GOV. GRANHOLM: So I'm, I'm confident and I'm optimistic.
MR. GREGORY: All right, we're going to leave it there. Thank you all very
Coming up next, our MEET THE PRESS MINUTE: war and peace. President Obama
accepts the Nobel Peace Prize while leading a nation at war and talks
about the lessons of Martin Luther King Jr., who appeared on this program
just one year after he received the Nobel Peace Prize and spoke about the
concept of nonviolence. After this brief station break.
MR. DAVID GREGORY: We're back with our MEET THE PRESS MINUTE. In 1964, a
young 35-year-old Dr. Martin Luther King Jr. was awarded the Nobel Peace
Prize for his work to bring about civil rights and equality through civil
disobedience and peaceful means. The following year he appeared here on
MEET THE PRESS and spoke about the importance of nonviolence as the
centerpiece of the civil rights movement.
(Videotape, March 28, 1965)
MR. NED BROOKS: This is Ned Brooks inviting you to MEET THE PRESS. Our
guest today on MEET THE PRESS is Dr. Martin Luther King Jr., who led the
civil rights march from Selma to Montgomery, Alabama. Dr. King, who is
the winner of the Nobel Peace Prize, is president of the Southern
Christian Leadership Congress.
MR. TOM WICKER: Dr. King, your movement has been distinguished for its
nonviolent approach, but your people are under great pressures in many
cases. How deeply do you fear the eruption of Negro violence in pursuit
of Negro rights?
DR. MARTIN LUTHER KING JR.: I feel that we will continue to have a
nonviolent movement, and we will continue to find the vast majority of
Negroes committed to nonviolence, at least as the best tactical approach
and from a pragmatic point of view as the best strategy in dealing with
the problem of racial injustice. Realism impels me to admit, however,
that when there is justice and the pursuit of justice, violence
disappears, and where there is injustice and frustration, the
potentialities for violence are greater. And I would like to strongly
stress the point that the more we can achieve victories through
nonviolence, the more it will be possible to keep the nonviolent
discipline at the center of the movement. The more we find individuals
facing conditions of frustration, conditions of disappointment and
seething despair as a result of the slow pace of things and the failure
to change conditions, the more it will be possible for the apostles of
violence to interfere.
MR. BROOKS: I'm going to have to interrupt. I'm sorry.
MR. GREGORY: This week, as President Obama, the commander in chief of a
nation at war, received the Nobel Peace Prize in Oslo, he praised the
nonviolent message of Dr. King but confronted the struggle between the
merits of peace and the realities of evil that can lead a nation to war.
(Videotape, December 10, 2009)
PRES. OBAMA: I make this statement mindful of what Martin Luther King Jr.
said in this same ceremony years ago: "Violence never brings permanent
peace. It solves no social problem, it merely creates new and more
complicated ones." As someone who stands here as a direct consequence of
Dr. King's life work, I am living testimony to the moral force of
nonviolence. I know there's nothing weak, nothing passive, nothing naive
in the creed and lives of Gandhi and King. But as a head of state, sworn
to protect and defend my nation, I cannot be guided by their examples
alone. I face the world as it is and cannot stand idle in the face of
threats to the American people. For make no mistake, evil does exist in
the world. A nonviolent movement could not have halted Hitler's armies.
Negotiations cannot convince al-Qaeda's leaders to lay down their arms.
To say that force may sometimes be necessary is not a call to cynicism,
it is a recognition of history, the imperfections of man and the limits
MR. GREGORY: And we'll be right back.
MR. DAVID GREGORY: A programming note here. Tune in to MSNBC's "Morning
Joe." This coming Tuesday morning they'll have, as their special guest,
Vice President Joe Biden.
That's all for today. We'll be back next week. If it's Sunday, it's MEET