tv [untitled] CSPAN June 6, 2009 11:30am-12:00pm EDT
undertaken, do you think they will have a more important role coming out of this historic lee? >> i think for me it is quite obvious that china will become more important, economically, financially, but in one sense i have to say that there is also a huge problem, of course. the environment, the social problems, income inequality. i know that in the united states income inequality is also an issue the income inequality in china is much worse than it is here or in europe. i fear a little bit, i have talked recently to people at the imf will follow up china closely that of a lot of the stimulus problem is window dressing and
that the maine publicity avid. in an attempt to push up confidence but that is really the hard practice that shows that it is not that impressive in terms of what really happens and has put extra into the economy. >> and what is the reason to try to make it out more than it is? >> basically the same reasoning as the germans, a free ride on american expansion. >> everybody is waiting for us to buy and i think i like that idea but not doing much. in the book is a bit of a stretch. i will wait for this question. >> you spoke about china. how about india? >> well, i think it is less in
the picture to a certain extent, but i think they have a very good industrial policy because if you look at where economic activity develops in india it is much less in basic sectors of the economy in coming chinese economy still very much oriented toward the of that kind of basic industrial activity or as, for example, in india you have a lot of development in software and information technology, medical equipment. india has become after the united states the second producer of medical equipment so i think there are developing their economy more clever and less dependent on the competitive situation because what is a problem for china is that countries like bangladesh, vietnam, even pakistan and
become competitive because the wage costs their competitors visavie china because labor costs are much lower than they are china. india is less dependent on the kind of cost competitiveness and much more clever industrial policy and i don't think china, of course, the advantage or the power of its huge currency reserves which india has some reserves but not nearly as much as china which is china some power but don't overdo that either because they start using these reserves that will run the risk of shooting their own foot. they're basically dollars at the moment that start moving too much and the dollar goes down,
they throw down the value of their own reserves so i really don't think that china will make a sudden move out of the dollar. that would be totally self-defeating. >> what is going to happen to the dollar and how low will it go if it is going to? >> i'm not sure it will go down much more than it actually has. because if you look of the world economy basically there is one competitor and at this point in time and maybe the chinese will be of competitor but today wilmont. now, coming from europe and not so sure that people realize and what kind of situation with respect to the currency because we have one currency the 16
countries so which is the bernanke of the banking in europe has to close 16 secretaries of the treasury and a obviously were unnecessarily the voice of it mr. steinbeck of germany is worth more than a voice of the minister of finance of my own small humble country. so the guys at the ec meat are in an impossible situation and i am blame them for reacting much too late in the financial crisis but i can't understand the institutional and run into in which they have to work and is horrendously difficult because can you imagine what would happen if they started doing what the federal reserve has been doing and i refer again in taking over the credit positions from private banks. what is it to do? the italian bank, a german bank,
belgian banks, dutch banks, irish banks? it is immediately a gigantic purely political question where as. the united states bernanke calls to pull senate in the geithner now and they work out a deal in do something and mr. bernanke takes over credit for american banks and that is that. out the situation in europe is a very complicated, it is no coincidence that each time there is really a pressing financial crisis and everybody runs to the dollar bear go. >> your local community bank of the bottom but yasser. >> before the turn of the millennium, i understand that there were $2.50 for every
dollar of its gdp. that would mean that the economy was bankrupt, the dollar meaningless, now you explain with those figures that the economy runs and is still going? >> well, of course, the u.s. economy is a huge economy, the biggest in the world and you have the reserve currency. at lot of people are almost fighting to have dollars and their central banks so as long as the rest of the world believes that the people of parade this money, the federal reserve keep their heads, there is trust in the dollar and you can have that kind of relationship between amounts of dollars moving around in your economy and not getting into a
bankruptcy situation. when the trust falls to the ground i will have a problem and you have a run on the dollar which will diminish the value enormously at that point in time. like for example in the '50s and '60s. >> geithner has said and when he was a member of the new york fed didn't have any real power to do certain things that would have favored the financial crisis. and lately elias' spencer has been saying that the fed does have a lot of power but it did not have the political will to exercise it and now there have been all these reports about the fierce lobbying effort that the banks and financial institutions are exerting on our politicians to try to make sure that we
don't have more regulation so i wondered if you have a perspective on this and your where is bernanke coming from on all this because i haven't really heard him be outspoken about it? >> there is a lot to say on that question. first of all, i think bernanke has always been very careful with respect to speaking on issues that were not really only monetary because there is a huge tradition in the united states and independence of the federal reserve, but congress and will not away tomorrow. with respect to the first part that is one of the reasons why bernanke rather reluctantly space about things that are not closely related to a purely monetary issues. with respect to your first question i think in that is one of the things you can blame bernanke of four, it wasn't a nonsense to say that they didn't
have the machinery or have the power to do what was necessary with example lehman brothers. and there was just a situation of panic, there is a situation of aig happen in the same day and everybody would be overwhelmed with demands involved, so i think the excuse, we don't have the powers or don't have the authority for this kind of thing or that having, a really weak argument and that is certainly one of the things for which you can blame mr. bernanke of being maybe it certainly those days of 2008 a little bit on the ec side. >> it does seem like we have come along way and we now all owner general motors among other companies, the amount of government intervention is unbelievable considering when you wrote this book on free markets in the chicago philosophy of hands of
government so have we now set a precedent or from now on and this is the way the markets are going to work and government owning businesses? >> you certainly have treated a precedent that is for sure, and there is a big difference in my way of looking at things between letting lehman brothers were bank of america or citigroup going bankrupt or general motors because of the summit of fact of a huge bank going down the drain in an uncontrolled way can be enormous. you get in the 30's. what is the difference between what they are doing now with general motors, which at the end of the day will mean there will be huge job cuts? i don't know exactly but and there were 14 plants close in the united states. you probably would have more
less the same results after two years in the bankruptcy situation here now. >> is in bankruptcy, of course. >> chapter 11, pure bankruptcy situation where you would immediately have parts of the business taken over and now you're trying to do it in a controlled way. there's an argument for that but their arguments against it also can and it's interesting to hear about individual dealerships being preserved as a result of congressional intervention or the local politician calls up general motors and says you can't close to the dealership, that's important so shebly is still in business or a least. we will see a lot of changes. before we had a chance to come up here i was asking johan about real estate and residential real estate and he said spain, if you want to get a good deal on a condo the coast of spain so i would ask you, where is the biggest discount in residential real-estate around the world of these major countries? >> as far as i have looked at
and purely as a research interests not as a buyer, spain is in the real estate problem or they are huge, the real-estate prices in the united states is quite modest compared to what is happening there. for example, the city of valencia and the south, apartments on the coastline that went for something like 300,003 years ago and you have 100,000 euros now, but yes. >> it sounds nuys. >> i don't know how the expense of the following tickets to spain are. but a remarkable thing is that none of the spanish bankers are in problems and it is certainly a remarkable because you'd
expect such huge real-estate prices to translate itself almost automatically in a huge banking crisis which is totally not the case and essentially as far as i looked there were two things that happened in the last seven or eight years in spain. first of all, you certainly have the balance that it bangs created to do a lot of strange things. the bank of spain already in 2001 sent to the banks i'm going to put it a little bit plainly now, if you do that it is okay for us, but we consolidated and you will be taxed on it whether in liechtenstein or wherever, we don't care. it is your branch, you are transferring activities to that. we consolidate and which were doing, we consolidate that your balance sheet and we tax you on that so basically that was gonna
and secondly the bank of spain has incentives to increase profit retention so is and in terms of decisions but to keep profits in the banks and hence strengthen the capital base of the bank's and i think those two issues everybody knew that the spanish banks, their balance sheets, that was it. there were no corpses in the closet, everything was their. and so there was no pity surrounded the banks, everybody was saying in is much worse, but we don't know how much worse. it was planned, it was open and clear. >> i wish we had done that. >> i have two questions, first is when it be fair to say that the efficient market theory is worse than an orthodoxy actually of theology? and secondly, there once was a wonderful build an american
economist named robert tipton and he predicted it way ahead of his time that there was a terrible dilemma awaiting the american economy. where were these men preparing us for what came in the last few years? thank you. >> starting with robert, whom i have known very well, he was a very nice guy in the last 10 years of his life he didn't do any of economics, he was just interested in history as a sideline. what did he say? the world has a dilemma because you are dependent on the dollar to keep the machine going and if you don't create another mechanism to yet the liquidity for the world economy you will always depend on what the americans are doing. that is basically what he said and that is basically where we still are today. i mean, it's a little bit too easy and that's not because i am here at an american audience, to blame the united states for all
these situations. there was nobody obliging in european banks to buy a the subprime crap. you can edit it. the american bank. but there was nobody holding guns say you have to buy this stuff, we bought them because we wanted more profit with the banks. more broadly, if you don't create an alternative to the dollar, he will remain dependent on web the united states being the country of the dollar is doing, and that was so in the time of robert in the '60s and still so today. >> thank you. >> the first question we will settle in private. >> thank you for it being in then discussion and a supporting the chicago june and literacy. a bookselling will take place, as you exit on the left it is the first question on the left.
>> i want to thank everyone for the questions. >> thank you. [applause] [inaudible conversations] >> you have been watching johan van overtveldt, author of a "bernanke's test", "bernanke's test: bene bernanke, alan greenspan, and the drama of the central banker". booktv live coverage from the 2009 chicago tribune printers row lit fest will continue after a short break. coming up next, authors kim bobo and jon jeter talk about workers and the economy. >> we are heading over right now to the in iran institute which is always set up here and for some reason we're going to find out why and talk with jeff of
here. what is your name and position. >> i'm archivist at the ayn rand institute. >> why is it that ayn rand always seems to bump up in sales when there's a lack of a crisis of blacks. >> the sales of "atlas shrugged", up and that is directly result of the story and the ideas in the book. this is a book about the not too distant future when of the creative people of all stripes come all talents and all liability is the side to go on strike against a world that does not appreciate their value in their contributions and a world very much like the one we are currently facing economically. >> what do you think of the current response of public policy response to the abdomen situation we're facing? >> total disaster. the whole premise behind the response is that the free market is in the essential problem and
it is quite the contrary, it is then on free market that has produced the economic catastrophe we are currently in and that is a few that is, time is in "atlas shrugged" as well as made very clear in her work such as capitalism, the unknown ideal, if you analyze that and look at those essays and what they were examining in the '60s, you will see that the basic principles, the basics of version of the markets, the basic decision to go away from independent judgments, the basic view that you don't have a moral right to keep the product of your own efforts -- those are the issues that the book consolidates and those are vital issues relevant to our current crisis. >> when you see the crowds out here at the l.a. times book best, what are your thoughts and how is it compared to previous years? >> i am glad that there are so many people reading and still
reading and it is gratifying and as far as the ayn rand response, every year it gets bigger. at every year people come up in sight, you know, i'm going to rethink that book, i am going to look at that -- i remember reading that when allison tenth grade or remember reading when i first got married and i'm going to revisit that and they do. on this and have distorted reading this but now what has happened because of the economic situation there saying ayn rand was really write another something about her novels in what is going on here and that, boy, are you riding on the waves is what they saying. >> what are you currently reading? >> i am currently rating in short stories of the boat off. a great brilliant writer. >> y? >> beautiful prose, crystal clear beautiful prose. i am not really wild about his content and everything short stories but i get hooked on paragraphs and and i am there for the anna. >> finally what is the website?
>> the web site for the ayn rand institute is ayn rand.org. >> thanks for spending a few minutes, here is your book back. >> this summer booktv is asking, what are you reading? >> senator mitch mcconnell, what is on your summer reading list? >> welcome i have just finished a couple books i would highly recommend, john mecham by our free of andrew jackson which is fairly recently out. wamp fabulous sort of different look at andrew jackson from previous biography is that i have read of him and i have read several. and it really focuses mostly on his presidential years and also a good deal about his personal life, however for his family was, his wife died right after his election and so was never in the white house. but he had a collection of
relatives who serve as advisers and sort of supported him and this really delves deeply into their relationship with him and also the infamous was commonly referred to in as a the peggy eaton matter which was the wife of one of his cabinet members who will have held similar that his wife had been maligned during the campaign and he defended her and made it into a really big issue peridot so john mecham is a good writer and it is a good reading. also i finished a book actually since then, it is older and been on a couple of years, by michael korda, a biography of eisenhower. farewell putin. a very well written, it dawned on me i never actually read any eisenhower books and i felt like that was a gap in mind reading that i needed to fill. i would highly recommend that to everyone as well.
i'm going to move on to a book, the author actually escapes me, a book that has been out a while, the best year of their lives here go is about 1948 in the life of richard nixon, lyndon johnson and john f. kennedy. which was recommended to me by senator barrasso, who is also a voracious reader of american history. and also interestingly enough there is a book about the republican leader of the senate coming out in june 15th by an author named john david died which is called republican leader, political biography of senator mitch mcconnell. and so i expect i will read that. i have not seen it although i did it come i was interviewed in by the author. and since it is about me i expect i will read it. >> to seymor summer reading lists and other program
information, visit our rating site and booktv.org. the publishing 12 of publishes 12 books a year, carrying gold stain is publicity director at 12. mr. goldstein, what are some of the books you have coming out and later 2,009? >> this summer we are publishing henry waxman, the waxman report in july, it is a look back some of the landmark legislation of the congressman has involved involved with, tobacco, clean air, nutritional labels and what he does is explained to us how coalitions are built, how bills can move from subcommittees' to committees, how you collect votes and it is really a look and how the sauce is made in and, of course, the congressman has a couple big bills coming on the floor this summer. >> did you approach henry waxman or did he approach to? iraq are publisher approached
him and thought that he would be the perfect person to explain how congress works and i should add that josh green from the atlantic monthly did a fantastic job. >> another book by peter peterson. >> he has lived a fairly low nominal wife. born in 1926, raised by greek immigrants will, was born into the depression era in nebraska and were tennis fathers diamond, found himself secretary of commerce for nixon, chairman and ceo of lehman brothers and beta the blackstone group and here we are in the greatest recession since the great depression and he has a bird's-eye view of this that few people would have. >> do is both brosnan and actually mention? >> a journalist and writer, author of the number one bestseller what should i do of my life and actually is a science journalist and they have taken a look much as was done for the economy and friedman for
globalization, they're taking cultural look of the way we raise children and when they discovered is there are certain key twists that science has overlooked and recent research shows that conventional wisdom of raising our kids is all wrong so they won a national magazine award in new york magazine and it turns out for example, that we all think raising children gives a sense of confidence, but overpraising your children studies show will, in fact, make your children less inclined to attempt to do things and they don't think they are back and furthermore more inclined to cheat. there also chapters on siblings, there are chapters on gifted programs, passing to private schools, and it turns out that the testing for gifted programs through kindergarten and testing for elite private schools, they have retested a lot of these kids four years later and they found that they are misplaced 73% of the time. three years later the develop
differently in a different race, if the person should not be in the programs they are in. >> is it risky in today's economy to publish only 12 books a year? >> actually i think it makes a lot of sense because i've talked about this before, we put all our energy and marketing publicity an editorial on one boat for a full month, not distracted by other campaigns, and we can be creative and not just published a book one way but publish one book several ways. a good example would be robert feldman, the lawyer in your life, one, on the one hand one of the world's leading authorities on deception peridot he is the chair of the department of behavioral science, at university of massachusetts, and he has written this book when he was a young assistant professor he went to the national archives and thought you listen to the nixon tapes. he learned in the near to what
he discovered was remarkable besides forbidding a remarkable and you discover that even he an expert couldn't tell when nixon was truthful or not, so the book is not about bernard may not for clinton lies come in is about the lies we tell every day and age as tells an average three liza ratan minutes. you look good, i feel well, the more lies are told the level our own lives increase. clinically depressed people have more accurate use of themselves and powerful people who tend to maintain a façade of strength in order to maintain their ambition appear go so in covers all these things but not just about the sort of small lies but how to handle lies in the office, in your bedroom, at the dinner table. but we published it about business, a book about becoming a more honest person yourself. ..
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