tv [untitled] CSPAN June 15, 2009 8:00am-8:30am EDT
[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> people like to have books. it is a very sticky medium. you see this obviously be sticky cents the 15th or the 16th centuries. >> tonight, the co-chairman of burgles man, owner of random house, on how the publishing industry is changing. >> when you read something great, you want to be an heirloom product. when you have digital media, it is harder for that to be true. you cannot actually be proud of a bookshelf that is a memory stick. >> the feature of publishing, tonight at 8:00 p.m. eastern on "the communicators" on c-span2. july 4 weekend on "book tv, "
unfamiliar sight of the nation's first president as we are live from the not vernon estate with a historian and author on the ascent of george washington. join our three-hour conversation sunday, july 5, live on "in depth." >> how c-span funded? >> i have no clue. >> maybe some government grants? >> i would say donations. >> advertising for products. >> public money, i'm sure. >> by taxes? >> how is c-span funded? 30 years ago, america's cable companies created c-span as a public service, a private business initiatives. no government mandate, no government money. >> "washington journal" continues. host: bruce stokes, columnist and journalists for " the national journal -- for "the national journal." he has an article about
europeans and the efforts of economic recovery. the headline says, europe must jointly tax and spend. for americans, why is this important? guest: in a global economy you need partners to can act as effectively as you hope you can act. and the europeans have a common trade policy and have since 1957. they have a common monetary policy for most of the countries. common currencies since the early 1990's. what they lack is a common fiscal policy and it has been highlighted in the price is where there have been times where it was needed for europe to spend money jointly, but they couldn't because of that power still is in the various nations states in europe. is it the political will -- host: is there a point well? guest: that is the big problem. it calls into question the european experiment. they would like to be an equal partner with the united states
in dealing with nature will park -- problems. but this crisis suggested that unless you can get the europeans to somehow put together pots of money,, and pots of money, that they can spend in a crisis, raise and lower taxes together somehow. one of the ideas we put forward is why don't you all cut your taxes at the same time. they could not even do that. host: give us a history lesson come as and a couple months ago. the president went to the g-20 meetings back in april. what did he ask european nations, what did he and secretary geithner is european nations to do at that time? guest: at that point, estimates were europeans were about to spend 1.8% of their economy, gdp, in stimulus. we were spending over that, the chinese were spending more than that, and the imf had asked that every country spend at
least 2% of their gdp -- gdp. yet companies like germany spending 1.8%. companies like france were spending far less. there was an inability to courtney the stimulus of the economy, and it is beginning to show. there is evidence it seems that the united states will pull out of this crisis more rapidly than the europeans will because, in part, because they spend less money to stimulate the economy. host: did any of the european nations say we are not going to do that because things are just fine here because of the cockpit -- in terms of the economy? where we are, we do not need to spend the suggested 2%? guest: they say they have the stabilizers -- and and when the benefits, national health care and you americans are not counting that and as a result we are spending more than you think we are. that is all true, and in fact, it cushioned them and they feel the recession less than you do now. but it also probably endangers
their ability to rebound from the recession and a timely fashion. host: bruce stokes to focus on europe and the world wide recovery -- recovery. in your article in "the national journal" you conclude with, as the obama administration ratchets up its dialogue with europe, it is time for a frank discussion about how such european nationalism harms mutual efforts to cope with shared policy challenges. europe will undoubtably countered that it faces problems created by american federalism. to be sure, insurance, professional services, and much of the public procurements in the u.s. are still regulated by the 50 states, a decentralized system that is not always in tune with the global economy.
guest: it seems a strange way we both face the same problem. we are a federal system, created in, let's remember now, in the 18th century where states have great sovereignty. the europeans created a centralized european community after world war ii, but that had remnants of their national systems. those decentralize actor had difficult to play in a broader global economy we now live and. that is one of the challenges we both face, how we challenged our desire for localism kamal local control, with the fact we now live in an economy that is much more global and what we do locally has impacts. host: have there been projections done, had europe and on board warm much of your been on board, would the economy be advancing or recovery?
guest: this is the bid by economists, but the majority of economists agree that if the europeans could have spent more on stimulus spending, their economy would not be contracting as much as it is. a severe downturn and the economy. it would have been useful to have that stimulus to spur growth -- germans did not do as much as they should have and the of paying the price. host: of florida, good morning to michael on the independent line. are you there? caller: thank you for c-span for taking the call. my question to you, could you, when we talk about economic stimulus by governments -- my understanding is that to pay for the stimulus, the u.s.
government is in essence borrowed a tremendous amount of money from china. and my question is, when you talk about stimulus, whether from the european economy, where are these governments who are endeavoring to stimulate their economy -- i understand even china is trying to stimulate its economy, where are big giving resources, the capital to dump all this money into the economy? guest: at a very good question. we are, in fact, although deeply indebted to the chinese from overly indebted and will continue to be in some time, we are in fact the most recent month barring more and more from the american people. the american people have begun to save at a level they have not in decades. so there is more money for the u.s. government to bar from the americans -- host: treasury bonds? guest: things of that nature. the chinese government is borrowing a lot from its own
people. their savings rate is very high. a couple years ago it was as high as 50%. it has gone down a little bit. and because we live in a global market, a global capital markets, governments around the world of course a borrow from the saudis, or borrow from the japanese, or whoever. the reality is, governments are beginning to issue some of these bonds, and either there are no takers who wants to lend the money or they have to pay a much higher price to get the money. so we are beginning to bump up against what is probably the available pool of capital for this government borrowing in this moment, at this price. and that is probably a constraint -- more than probably, it is a constraint -- on the ability of governments to continue to stimulate for an extended period of time.
that doesn't undermine the value of stimulating in the short run because of we hadn't stimulated here and the u.s., our economy would be mired in a much deeper recession. host: leesburg, fla., steve. caller: i am wondering what all the talk is about european stimulus -- aren't they suffering because we stopped buying their products and some buying japanese and chinese products? guest: that actually, the europeans have suffered, especially the germans have suffered, but a dramatic decline in exports. not just to the united states -- host: why germany in particular? germany had developed only recently and economic growth model that was based on exports. they had decided that the best way to have sustainable long-
term growth was to become increasingly dependent on manufacturing exports. that turned out to be not so sustainable in a downturn. their exports have fallen off the table. and it is why germany is suffering, among the major european industrial economies, while germany is suffering the most, because global trade in general has fallen off so severely. host: secretary to geithner and other ministers from the g84 meeting in italy over the weekend. ministers way on winding rescue programs. and the wake of your suggestion about european spending, what your thoughts? guest: i think it is not premature to begin to stir talk among themselves. they asked the imf to do a study, how what is it we on wine from all of this spending. people in europe, when i was in france last month, were already talking about when we are going to have this start to cut these
deficits because they are getting too big. there is worry now that paying for these deficits will slow growth and the feature because it will drain off money from the economy. and there are examples. the danes, the dutch, and a recent years have dramatically cut their deficits through belt- tightening, a combination of cutting spending and raising taxes, and there are probably lessons to be learned here about how we began to unwind this. that doesn't mean it is time to unwind tomorrow. that is not what the folks at the imf meeting, but g8 meeting in italy were suggesting. but they did suggest it is time to begin to talk about it, which i think is a sign that politically this spending -- the growing deficits is not sustainable for much longer politically. host: what role does the u.k. have and all of this quotient --
had in all of this? house of are they from the rest of europe in terms of spending? guest: they actually severed a great deal in part, some people think, because they have become so dependent on financial services at the major industry. there is very little manufacturing left in the british economy. and financial-services was deeply dependent on the housing prices and sales, which have fallen dramatically in great britain. it was deeply dependent on transfer is in the financial system and activity in the financial system, which has dried up a great deal during the recession, in part because, we must remind ourselves, much of the financial crisis began because of the excess is. and the problem going forward for britain is that they've you how to fix this problem, how to deal with this crisis differently from most of the other continental europeans. they are desperately concerned
that the european union will want to impose new regulations and financial-services and bank activities and hedge funds, etc., and much is centered in london and the british see this as a threat to their competitive advantage. host: peoria, illinois. good morning to hezekiah on our democrats line. audit of i -- caller: i was just wondering about your guest. do you seem the european union emerging as a global power over the united states? because they have about the size of our economy, 300 million people, all together throughout those nations state. i was wondering if you saw the european union in merging as the superpower over the united states with the next 10 years to 20 years. i will hang up and listen to your answer.
guest: i think the point that your viewer makes is important for americans to hear and understand. the european union's economy is larger than our economy and they have more people than we do. now, i don't think that they are ready to replace the united states as the global superpower, either economically or in foreign policy or military terms. and part because, as we discussed, they lack a common fiscal policy. they cannot act as one point when it requires spending. and until you have the power, it seems to me, you cannot really play a leadership role in the world with the united states does. host:, nations in the eu and common people? guest: over 400 million people, 27 nations. but the original number was 7, i believe. 1957. there was discussion about growing the european union.
some of the balkan states will probably be joining sometime soon. huge controversy in europe, of course, about whether they should admit turkey. turkey would like to join and in europe would not like them to join. host: any advantage to allow turkey? guest: i think the economic advantage in europe, and a sense it would increase competitiveness within the european union. very active, aggressive, competitive turkish companies which would press european companies to be -- a huge market of tens of millions of new consumers. by the same token, turkey is very, very poor. poorer than portugal would join the european union, porridge and greece when it joined. and one reason the european union worked so well is that the european union understood when it was creating conditions that
they had to subsidize those countries initially to bring the standard of living up to a certain level. the cost of doing that and the european union would be enormous. and then there are all the cultural and religious problems that make the headlines of whether europe thinks turkey is really a european nation, and this raises questions about islam. it is a very dicey -- host: bruce stokes rights and " the national journal." we have another 15 minutes for bruce stokes. your reaction to a peace and "the financial times." optimism is not enough for global recovery. last week, the green shoots shriveled and south korea,
china, and germany, exports were declining once again. and the u.s., the federal reserve is beige book said economic conditions remained weak or deteriorated further from the period of mid april through may. and as an analysis as -- global industrial output is still missing dejecta as it was in 1930. the only question is, whether we can avoid 1931 and 1932. guest: of wolfgang is a very old friend of mine. it very insightful column. if you look at the data -- and your viewers can do this, the economic blocs. -- blogs. showing very indicators, industrial production, and ejector going down, compared to that in the early 1930's. unfortunately they are on the same track. obviously you do not have to go
down as far as we did in the 1930's. no inevitability here. but it is disconcerting. i do think that viewers have to take with huge grains of salt all the headlines and commentary you here in the news now about green shoots and recovering, and stock markets -- it is self- serving, being fed to consumers by politicians who want to say the what they have done work, but the public by people on wall street who are desperate to have people put money in a market. it doesn't mean it is a good or bad thing to do, but remember who is telling you that i take it with a grain of salt. what -- host: will win -- also have bennington bruce stokes on our website, c-span.org. a wreck on independence line. -- eric on the independent line.
caller: i wanted to comment on the cycle we always seem to go through, the boom and bust cycle. i believe the government will and this, we will all go through the ups and downs of the economy. the government's role should be to mediate the extremes of the ups and downs and make it less of an impact for people around the world. i think one of the best ways to do that is to focus on the green movement and lessening our -- excuse me, first-time caller. the u.s. and china have trillions of dollars toward military spending and medicare is a huge thing. i call the during the health care discussion did that as well
as many commenting on, how completely upside down a wish to have more primary care givers and last of these specialized categories that contribute. " scott thank you for the input. guest: observations on the comment. i think the caller is on to something here, and we need to all remember this the next time there is a boom in the u.s. economy. i have lived through multiple booms in my lifetime. i remember the japanese bubble economy in the 1980's and the japanese telling us, of course, they invented a new economy and it will go on forever. i remember the tech bubble, the house and bubble, we're the same thing, somehow the old rules don't apply. capitalism, for all of the benefits, has its ups and downs. it creates its own contradictions.
as sure as we know there are going to be ups, there are going to be down. i do believe, as the caller does, that the role of the government is to moderate those. one of the value is the europeans have had is because of their strong health-care system, their strong unemployment system, the suffering in your from this recession has been moderated, and i think, as people will care about other people, we should have more of that ourselves. the challenge, though, is, how do you keep that from stultifying the dynamism of the economy? host: we will talk about this a little later in the program on the proposals the obama administration is going to make. our new look -- looking to how the economy is regulated and other countries, world wide regulations? guest: one of the debates -- we
were involved with the g-20 process with the major industrial countries, and we have pledged to work together to regulate the financial system, which is now a global financial system, global capital transfer system. in a way that the regulation that the least not clash with the job. the europeans have moved more rapidly, imposing restrictions on rating agencies and had funds -- which has r. rating agencies and hedge funds upset. our agencies may or may not be able to get together among themselves to coordinate. we may actually move more in that direction or be able to move more in that direction, but that develops more tensions were you have regulations -- regulators that approach and see things differently. host: jerry on our democrats line. caller: can you hear me now? a big difference between our
system, the american system -- with our constitution, we have a credit system where we can put credit directly into what we need to build, which is a lot come in infrastructure. long-term credit. 2%, maybe 4%. at this point at -- our system is bankrupt. globalization is a failure. we should just admit it. it does not work. free trade does not work. british system -- adam smith, promoted, versus the american system of political economy, through our constitution we have a long-term credit system. we should just admit. you can't look of the system of hmos, 30 percent of the 50 percent are in desperate with hmo's vs two% for medicare and medicaid. guest: o caller: --
guest: i think the caller is right, with a constitutional system that allows us to inject money into the economy in ways the europeans have yet to be able to do. they are moving in that direction. the european central bank has done an number of things, as felt -- well as the fed, following the fed's lead. they have not gone as far as the fed, but it does seem to mean that it is one of the strengths of our system. the criticism of trade, i have long been a critic of trade, but it is with us to stay. we have to learn to adapt to it. we have to learn to make it work for us. and i think that one of the challenges going forward is that probably this crisis have demonstrated that there is such a thing as being to globalize. the germans are probably too globalized. and the chinese were probably too dependent on exports.
and one of the new consensus is coming out of i think this crisis may be a bad to have a more sustainable economy, you have to have a better balance between export dependency and dependency on domestic demand. and when you let that get out of whack, you expose yourself to danger. and that will be heretical in many economic circles, but i think it is one of the lessons we will learn. host: bruce stokes, international the grazed at george washington forest service schools -- new york, rick on the republican line. roddick of good morning. a lot of people calling -- eli caller: sustainability -- like that you end talk about reducing the world population, but can you talk about ron paul's bill, 220 co-sponsors about the
federal reserve. international bankers are running the country and world economy like a giant bernie madoff ponzi scheme. thank you. guest: the listener raises an interesting point, the federal reserve is not democratic with a small d, it is not directly accountable to the political process. it was designed that way, to give it independence, so there would not be undue political conflict over the decisions made by the fed. by the same token, we are a democracy. and to much independence does, it seems to me, raised questions about accountability. now come in this particular crisis, the fed has done extraordinary unprecedented activity is to stimulate the economy. it does seem to have worked in the short run. it raises questions about the future about debt -- the
independence of the fed, and how directly involved in has been in the activities. while i do not endorse the ron paul bill, it does seem to me that we should have a lively public debate about how independent the fed should be and are there ways to maintain that independence while at the same time we increase the accountability. host: up all the fed has done since the beginning of the financial crisis until now, have expanded their role -- is the barn door open? kenyan not get the genie back into the bottle? guest: you raise a very valid point. it seems to be once but that has demonstrated that it at least thinks it has these powers and it has exercised these powers, it would be very difficult to say to a fed chairman and a fed board 10 years from now or 20 years from now, no, you can't do that, when the id
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