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tv   PBS News Hour  PBS  December 14, 2009 7:00pm-8:00pm EST

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ptioning snsored by macneil/lehrer proctions >> lehrer: good evening. i'm jilehrer. president obamwent after top u.s. banke today to help the economic recovery by lending more money. >> woodruff: a i'm judy woodruff. on the newour tonight, full coverage of that whe house meeting, plus the perspectives of the administration and theinancial industry >> lrer: newshour corrpondent tom bearden focuses on the impacof the credit cruh on small businesses. st entrepreneurs say a crit clock is ticking and
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their very existence iin jeopardy. i'll have a report from denver. >> woodruff:hen ray suarez has an update from copenhagen whe developing wor nations ended a ycott of the climate change summit. >> lehre we'll have a report on how green technology is helpg and hurting china. >> woodruff: and we'll rember nobel prize-nning economist ul samuelson. who died yesteay, at 94. people like me who le through the great deprsion arin great demand because the other people don'tave a clue as to what th kind ofituation is. >> lehrer: that's co >> lehrer: thas coming on tonight's pbnewshour. major funding for the pbs newshour is prided by:
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chevron. this ithe power of human ergy. and monsanto. and by toyota.
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grant thornton and with the ongoing suprt of these instutions and foundaons. and... this program w made possible byhe corporation for public broadcastg. and by contribions to your pbs ation from viewers like you. thank you. >> lehrer:resident obama call the leaders of american banking to the whiteouse today and la on a challenge and a warning. newshour correondent kwame holman begs our coverage. >> holman: t face-to-face at e white house lasted well ov an hour, longer than expted. nine major bank executives attended, with threethers conferenced in.
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>> i've just finished a cand d productive meetingith th ceos of 12 of ounation's largest nancial institutions. >> holn: the president pointed out, manof the banks faced eak prospects just a year ag and might not ha survived withougovernment help. >> when many of these institutions were on t verge of clapse, a predicament largely of the own making, ofntimes because they failed to manage ri properly, we took difficult and, frankly, unpopular steps to pulthem back from the brink, my main message in today meeting wavery simple, that america's banks receed extraordinary assistan from america's taxpers to rebuild their industry and now tha they're back on their et, we expect an extraordinary commitment frothem to help rebuild our economy. >> holman: specificay, mr.
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obama said he urged mo lending to smallusinesses in an effort to stir job creation. also pressed the bankers to support sweeping overhaul of thfinancial regulatory system. it psed the house on friday, and moved to the senat in the fa of industry opposition. >> i madvery clear that i have intention of letting their lobbyists thwart rorms that are necessary to protect t american people. if they wisho fight common sense consumer proctions, that's aight i'm more than willing to have. >> holman: the toughalk was a carrver from the president's interview on cbs's "60inutes" last night. >> i did not run for officto be helping out bunch of, you kn, fat-cat bankers on wall street. e only ones that are going t be paying out these fat boses are the ones that ha now paid back that ta money >> holman: some of the banke played down the inted criticism. richard davis of u. bancorp spoke the white house driveway. >> we're in th together and we understand that, the bankersre
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not surprised the public sponse. we get the samletters from smalbusiness owners who want more availability of credi i think thproductive conversation alled us to align our thinking and be re in line with each other we talk to the erican public about being party tohis recovery. we haven't done a very goojob of saying th are we're going to n. >> holman:efore the white house meetg, citigroup became the latest b bank to announce it repaying its federal rescue money to the u.s. easury, $20 billion worth and thgovernment will sell its stake in the company wth another $25 billion. the move is aimed at freng the bank from e scrutiny that came wi the rescue program, including restrictions on executivpay. wes fargo now is the only nation bank that has not yet paid back its bailout mone >> woodruf we take a closer look at what happened inoday's meeting wi the president and bankers. valerie rrett is a senior adviser to the president. she paicipated and joins us now from the white house briefing roo+x-
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ood to see you, thank you for being with us. how are you, good evening. >> woodruff: first of al thpresident had really tough wos for the bankers over t past few day, how did thmeetings go? >> i think iwas a very nstructive and productive meeting. yes, he d have some tough words but he alssaid to them look, the way bk to recovery iwith your help. we neeyou rit there at the table working with us nd and glovand on the four key topics tt he addressed at the meeting, i think at we saw that there was a lot of alignment in terms lending. the bas did agree they wod try to beef up their sml business lending. thathey are going to take a look aloans they have rected and see if they can give them another chance f they are actually good loans. he ask them also to take a hard looat their executive compensation and make sure that they understand tha the american people arvery frustratedaving spent taxpayerollars to get the banks back on track. th don't want to see all ose dollar going out to pay executive bonuses. he also sa he is concerned aboumaking opportunities availablfor people to renance their homes and
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the banks said loo we want people to stay itheir homes. sohe president asked them to pusharder to more move spdly on home refinancing and finalland very importantly the esident asked for their support fo financial regulatory refor so that we can make re that we don't end back in the same extreme suation that we weren in the begiing of the year, and we were heartened to see thatll the banks unanimously pledgethat they wl support regulatory reform. they said 80% of what weut on the table, that they are in agreeme with. and the president said lk, if there are uninteed consequees that you think will be dell -- delerious to businesses, tell us what ty are, come and work with us constructively. so i think oall four fronts the meeting wasery constructive >> woodruff: i tnk some pele are wondering, a litt bit confused, because on t one hand the president said tod i don't want to villi few anybody buts -vilify anybody but last night in the "60 minutes" interew he said he didn't n for office to ba out a bunch of fat cat bankers. which cture is more acrate. >> they are th accurate.
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look, the prident pressed frustration not just on his own frustration, judy, but thamerican people are very frtrated. i think at they saw is at look, we stepped up. taxpayers did their job year ago. we provided the imrtant dollars at were very also very unpopular dollarso help right the business community and get e banks back on ack. and now wh the president isaying, having done that, let's see what you can do work witus coop ratively to give something ck and improve ouoverall economy. and there is a huge disconnect. let's face it,etween the compensation tt we're seeing owall street and what the average pern is struggling wittrying to make es meet, seeing the unemployment rate at 10%. that's a huge frustratn th the president exessed. that doesn'tean that he doesn't want to work construcvely with those nkers. i think th is what happed today. >> woouff: the president is among other things aski them to le more. but we hear many of th bankers saying includi our guests coming up later in the program, tt it's a receion. and many of these business shouldn't be reiving
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loans. banks ouldn't be lending right now. >> well, i think it's not as black and white ashat, judy. there arresponsible loans that can be ma. we saw what happenedhen they just lent without any underwriting criteriand without any financial regulatory rtrictions, that iwhat was going on last year. now what we are seeing is ere are businesses and the president recees letters from these small business each and every day wre theyre saying look, i have great credit. i have a wonderful busines plan. in fact,he lenders were leing to me previously and now we can't get the loa they're not being pro zsd as quickly as they a needinto be pro zsd. the presidensays we have to work harderyou have to push your team f you reject a loan go ck and look at it a make sure it really was jected for good purposes. we're not suggestingo make bad ans. we're not lookinto go back in tim but we are saying that the are businesses out there that want to expand, they nt to grow, they want to hire, and let'all work collectively to e if we n make that happen. woodruff: and what about another argument we ar from theankers and that is
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we're getting a mixed message. on the one hanthe white house, the administratio lls us to lend more money. the other hand the baing regulators are saying whoa, don't make any loans unless you are absolutely se are you going to get that money back. >>ell, i don't think that they are inconstent. we are all sing let's lend reonsibleably. what we are sayings that we believe that there e mpanies out there who could repay ose loans. no one is advoting taking unnecessary risk so i think that there is middle ground her and that's what we wer pushing toda and it's interesting, to ta about what progress was madent right after the meeting bank oamerica announced a $5 billi increase ttheir small business lending. so right away wee already seng results. >> woodruff: and what are you -- so bottom line,hat do y think is ing to change as result of this. i mean you mentioned the bank oamerica. what else do wlook for. >> well, i think the chalnge is for each of the banks th was in the room as wl as many others that are out there as well. the presidt is inviting
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them, smaller banks next week to have a conrsation withhem about what are the challenges that they are cing in terms of small business lendi. and so i think what we wt to sees that everybody is going toust try a little bit harder. we tried very hard. we beinghe taxpayers a year ago. when we push forward t boldlans that righted the business. e business community by providing access to capitals to the banks, very necessa funds that as you kn were very unpopular at the me. everybod it was a herculean effort, a bo efrt and it was very unpopular. so what we are saying is in exchange for tt, give someing back. and so i think the charge to ch and every bank was go backwork with your management team, discuss with your boards what u cado to just go one step furtr than you have. and i thk what they committed the meeting is that they e going to do ju that. so we'llee. we'll see whether th conversation we hainside the roosevelt ro translates io providing efforts along l four fronts tt i described a mite ago. >> wdruff: valerie jarrett at the white house, than
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very muc >> you're welcome ju, have a grt evening. >>oodruff: and you. >>ehrer: and as we just heard, the major >> lehrer: one majoroncern raised at day's meeting are the problems of small busine particularly wheit comes to ans and credit. newshour corspondent tom bearn reports on how that has played out for some sinesses in colorado. >> reporter: thitiny house is thworld headquarters of the vedante corporation boulder, colorado. barbara kantor's businescard says "ceo and founr." she's also t marketing manage chief accountant, and inventormanager. in shorta one-woman corporation. it wasn't always tt way. a form california fashion designer and independe businewoman, she moved to colorado t years ago to do something ne manufacture and sell reflective arm bands an dog leashes to hp motorists spot pedestrianst night. at first it nt well. the prodts are popular on, and in retail outlets.
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but then the recsion hit. and hesources of capital began tory up. i started looking at bank funding and it wasightmare out therto be honest at the mont. the banks just aret loaning to small businesses and iave an extremely high cdit rating. >> reporter: unae to get a loan, she cut cost gave up her ofce space, began to take deliveri at home, and use her own car toaul products to an unheatedtorage unit 45 minutes away whe she stacks and tracks it al even in the dehs of a colorado winter. small business owners like kantor seem to be the hardt hit banks hold on to capital in the wake of the bking cris last year. don childears is theead of the colorado bankers association >> lenders theelves have their own financial uhestrictions. we'vsuffered bigger loan losses than we're typicallused to thataturally depletes the capital of the bank whicmeans it basical can lend less in a mmunity.
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now we have to have record catal levels because we're so conservative wh the stashing catal into the bank as fast as can. >> repter: while banks say they need to hold to more capital to prevent a fure collapse, presidenbarak obama is asking them to loosen up. that'shy he invited bank executives to the whithouse today to dcuss how they can better help small business lookinfor loans. lee prenjak could have used that help not long ago. 's co-owner of the cherry creek dance studio nr downtown denver. each week some 1800 studen, ages to 64, come here for lessons in ballet, jazz,ip- hop, a tap. e studio has been profitable for 16 years last summeprosenjak went shping for a $1 million loan to expand to larger udio space. he says hibusiness is so good that the smallusiness adminiration, a federal agency
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that guarantees small busine los from private banks, gave him a letter to show lenrs the sba would guarantee 40% of t lue of the loan. the banks were not impress. >> t national banks shut it down immediately. there was nothing u know, nothing, not a chance ere. the local banks at lst sort of seemed to run it up the fl pole a bit, they didn't evenook at it. >> repter: prosenjak got his new studio. but onlyecause the real estate market was so bad the buding's owner agre to carry the loan himself. ntor and prosenjak are just two examplesf what ken coors lls the worst small business crisis in american htory. coors is a retired longte all businessman who voluntee with score, the rvice corps of retired executives. the organization prodes business adve to people like kantor. the banks are, are not maki loans of course and theyre
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reducing credit nes, they're maki, they're making life miserae for, for good solid companies that are in toh tis. rember we're saving the banks, we'rsaving the car companies, we're ving the insurance companies, these little peop under the radar,hey're not politil, they don't, can't hire lobbyists, they're ju, they're tryingo do the best th can and were not helping them. can but we're not. >> reporter: the $78billion stimulusill included a number of programs designed to t small business through the receion. one of thewas the $255 million "america's recovery capitaloan prram" or arc. it offers up to 3500 government guaraeed loans to iable small businesses suffering immediate finaial hardsh." karen mills is the sba adnistrator. >>o far we've done about 4,500 of them t in every state in the country and theyre right now aboualmost 1000 banks making tse loans.
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>>he government flatly designed the program wh the best of inntions and the prram just flatly does not work >>eporter: the banrs associatios childears says his member don't want to take part because the arc qualication process is byztine. >> i don't kw if anybody within the sba, state government, anlenders that would defend that kindf bureaucratic nhtmare that they put togeth. 32 pages of deil whereas if i think a bank desned that, it would be a couple of pag of easy to undetand things. therare not very many small businesses who actuallqualify for arc loans. >> reporter: barbara kanr couldn't find a ba that would even talk to her aboutn arc loan collin shattuck's baer wouldn't even ke an apication. attuck has been selling moto scoors at four stores in colora for more than 10 years. in 2008, sportique scoers had a record year.
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what aifference a year makes. when gas prices droppe sales cratered. >> in 2008we actually had a local news outt here to do a reportn the scooter shortage in the uted states and now we're, we're literally choki on invento. it's beyd hard to stay open. it's virtuly impossible and 've had to reduce our staff levels a lotore dramatically than i ever have before. we've growover the last 10 years. tycally 20 to 25% per year. this is the firsdecline we've seenn excess of 60%. >> reporter: so shattuck turd to his longtimbanker, wells fao, and asked about the arc loan program. >> my local banker who's friend of mine a an outstanding ce guy looked me ght in the eye and tell me there's noredit. we've talked tnumerous local banks, um, we've basicly been told you d't have the assets to borroagain and so we've looked intthe arc loan process through the sbwhich were stilling wking with wells
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fargo at this time, buearly indicationare were going to be decled. >> reporter: all three of the small businesswners approached lls fargo, and other banks, and all we turned do. well fgo declined our request for an interview, statg they are the leer in small business lending. childears says don't blamehe banks. blame conflicting sials from the government. >> you've got the white hoe and the ngress and the media sayingo faster, lend more money, they've g their foot on the accelerator, ty want the money loan to businesses to kind of get us outf this recession. but don't answer to any of those parties. banks are related by a variety of banregulatory agencies and they have absote control over bank and they are very conservative and they thk, no you don't,e don't want you making tho kinds of loans. >> reporter: but admintrator mills insis the arc loan prram, as well as other sba loan proams, are a success.
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>> we've gotten 6 billion in a guaranteed loans into the hands ofmall business so far. so nowwhat do we do? beuse there are still needs for cred out there. so we' got programs that the president has asked congss to continue of recoveryct money, were going to raise oulimits. >> reporter: in the meanti, barbara kantorot some bad news last week. jp mgan/chase bank slashed her line of cred by 90%. somebody who's hard working o's ethical, who plays by th rules, alwaypays on time, the banks usedo support and not now, no. >> rorter: a lot of small business owners say th need help rightow if they are to avoid closing their doors fo good. >> woodruff: we get a respse on all of thesmatters now with eve bartlett of the financia services roundtae. his grp lobbies for and representsost of the banks that were at today'seeting. >> good to havyou with us.
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>> good toe with you. woodruff: now you have not only the psident of the united states, you've got a lot of smallusiness peoplen colorado as we st saw in that report saying t banks are not lending,hey're hurting sml business. >> wl, obviously the banks are lending. our banks get up ery day trying to figureut how to make good loan, make more loans, make more of them a provide more lending and we're doing that. the fact is that ln demand is down. evy survey would tell you that. the national federation independent buness came out with a svey last week, the federal reserve. so what's happening. and i'veeen a small businessman all of mlife voy been on both sides of the picture. i've nev met a small businessman who appliefor a loan that don't think that he she is qualified so i understand that thfact is you have to do one loan at a time and make sure it's a gd loan and that is what we communicated tthe president today. we're setting out to look foways to make more loans to increase buness lending, but we're nogoing to get back into at old habit of king bad loans. and i know that that isn't what the president is suggesting but we want to ma more good loans.
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we offer some suggestions of some ways that we could do more that and of course s and the government can also. >> what are some of thos suggestions. >>or example, the sba they had a 90% guartee. >> small business administration. >> they had a 90% loan guantee for the first half of the year. and then the aropriations ran out so we suested to tend that back up to 90%. on the art lns you saw the suestions from the guy in colorado tclean up some of the paperwork. we sgested the same thing with the hd program so you eliminate that 30 pages of back offe documentation for a 0,000 loan and make a more simplified stamlined product. to make it work. the other thini will just tell you that we also did, we went to the president a offered this second look idea so if someby thinks th they applied for a loan and should have gott it, our banks will take second look at it and we've incrsed our goals for loan pduction for 10. >> so there wasn't a sond look before,nce you were turned dn that was it. >> no, no, no.
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it'sard to describe. thers always a second look and a third look andhere's always competition sif you have four banks on a corne than you cano to the second o. but we're gointo make it a form, many of our banks are ing to make it a formal process whe they will go out and say okayif you think yogot an unfair deal, heres an appeals procs and we'll take another look at it has t have cash flow, has to he collateral. a an is not capital witht geting too much business school, i notice at the report sort of mixed two words. capitais your own money, a loan is the money yohave to p back. >> woouff: is there -- there is still a disconnec though between the stories at where the president said hgets dozens of tters every day, maybe ndreds from small businesspeopleaying i can't get the money i need the storieout of colorado. and wee hearing it from other states of course all 50 states for that matte u on the other hand are saying loan mand is down. helps square that. how do y explain it. >> loan demand is way do. but anndividual small siness does seek an individualoan from an individual bank.
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and that is competitive. there r8,000 banks o there and 50,000 other nonbank lender so it is a competive marketplace. if someone has a loan at has full cash ow and full collater, they'll be able to get the loan. but you have to package in a way that it makes it good loan. otherwise otherwise bank should or would take a bad loan. >> predent obama in that "60 minutes" interview used the te fat cat bankers. he said i dn't run for ofce to help people like that out. how do you a others in the banking industry rpond? >> well, let me just say that name caing never really improves od communation so i will just leave it at th. >> woodruff: but i mean do at improve, go -- do you think e ability to get th problem resolved? >> the best y to solve these public problems an we're all in it tother. we agree witthe president on the need fomore loans. we've suggted some ways that the government n do better and that we cano
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better. but mainly it's out the economy. so as the economy proves 'll make more loans but you know, public -- go communicatiois never helped by calling mes and so i won. >> do you thk anything willhange, i mean we've ready -- i guess valerie jarrett citetheical 5 milliothat bank of america done d. >> il 5 billion actually. >> woodruff: sorry, 5 llion but who's counting. the $5 bilon that bank of erica. what elsis going to change as a result. >> i think fundameally thathange chas is the recovery. our business ito finance the recovery. d that is of course what is sometimes missed inll this and that as the bank do better and are bett cap 258ized and bett functioning thanhe recoverys financed and that's what we do. so i think the first tng thathanges is as the recoveryicks up steam and begins tdo better,hen lending will increase anit should. but i haveo say that banks are hearing the messagand we're looking for ways to make more good lns. not wering the criteria or the andards th you have to p it back but looking
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for more ways to makgood loans. i had e of the other banks inhe room told me had doled, doubled his production goals for 2010 to make twice as many goo loanfor 2010 as de in 2009. so we're all on the same with the same goal here. and we jt have to keep pushing and pushing rder, doing thgs different, dog things better and we'll get through it >> just to be ear, i also want to mention of crse as i alwayso, bank of america is aunderwriter of the newshour but just to be clear, steve bartlett. >>hey are also a member of mine so, they e in good company, yeah. >> woodruff: but jt to be clear r standards going be loosened in anyway a result of is conversation. standards are not and shouldn't be loosened. to the psident's credit he did not ca on us to loosen andards. a good loan is -- re good loans is the answer, any more bad loans is not good swer. >> woodruff: steveartlett, thank yovery much. >> thank you, dy. >> lehre and still to come on the newshour: ray suarezrom the copenhagen climate smit;
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a report from china on theost of going gre; and the life and times of a nobel prize-winni economist. that folws the other news of the day, from hari sreenivan in our newsroo hari. >> sreenivasan: iran wil prosecute 3 amerans who crossed e border from northern iraq. shane baue josh fattal and rah shourd were seized last july. ter, they were accused of spying. today, iran's foren minister announced plans r a trial. he did not s when, and he did not specify the chars. interrogation of the three amican citizens who had illegally entered iran with suspicious nameis ongog and they will be tried by iran's dicialary system and judicia verdictsegarding their case wilbe issued. >> sreenivasanrelatives of the ericans and the u.s. government have insisted ty were innocent kers who strayed ross the border. washington, secretary of state hillary clintodemanded their imdiate release. >> we nsider this a
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totally unfounded charge. there is no basis for it. the three young people who were detaid by the iranians ve absolutely no connection with any kind of acti against the iranian state or government. >> sreenivasan: iran's announcement today came the standoff oveits nuclear progm intensifies. thu.s. and other countries are talking of imposinnew sanctions. taliban attacks kied at least 16 police across theountry. e insurgents hit 2 checkpoin one in the nor, and one in the uth at approximately the sam time. the violence came admiral mike mullen chairman of e u.s. joint chie was in kabul, meing with afghan president hamid kaai. mullen warnethe insurgent network is expanding. >> i remain deeplyoncerned about the growinlevel of cole useetween the afghan, taliban and al qda, and otheextremist groups taking ruge across the
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border in pakistan. tting at this network which is nowore entrenched wille a far more difficult task than it was just one year a >> sreenasan: also today, the second-ranking u.s. mmander in afghistan lieutenant general david rodriguez said dloying 30,000d mo u.s. troops could take 11 months. the obama adnistration originly said they'd be in place within six mons. italn premier silvio berlusconi remai hospitalized inilan, after being attacked on sunda he was hit in the face wita atuette as he signed autographs at a political lly. he suffered fractured nose and 2 brok teeth. police identified thattacker as massi tartaglia, a man with a history ofental problems. world stock marks rose today aftethe persian gulf sheikdom of abu dhabi bailed t dubai, its cashtrapped sister state. dubai will get $ billion in emergency nds, to save its ate-owned conglomerate "duba world" fm default.
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and on wall street, the dow jones industrial arage gained 29 points to close at 10,5. the nasdaq ros21 points to close at 221 those are some othe day's main ories. i'lle back at the end of the program with a previewf what you'll fintonight on the nehour's website. t for now, back to jim. lehrer: this is make-or-bre week for negotiars at the clate summit in copenhagen. rasuarez is there, reporting for e newshour, the word from him tonight is that efforts craft a deal areoving very owly. >> srez: it was one more demonstration of howough it will be get agreement in copenhagen. a 1997 treaty, the kyo otocol, threw the 2009 talks into temporary disarray. >> suarez: a bloc of developg nations, led bafrican counies, walked out. they said deloped nations had done too little to cut greenhouse gases, under oto.
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lumua diaping of sudan heads the 135-nation blo >> we are not afraid. we know that the develed untries have made that decision that they wouldant to kill the kyoto protocol inrder to change the lance of obligations between develong countries and developed countries and thats absolutely unacceptable. >> suarez: the prost had the supporof china, the world's largest emitter ofreenhouse gas. the developing nations a oking to extend kyoto and wo out a new deal f poorer countries. developed countries wanto fold the 1997 agreement io a new, overarching framework toight global warming. the new compact would clude the u.s. and ina, which never ratified kyo. antonihill is the senior climate changedviser to oxfam, thinternational aid group.
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well, in this tit for tat, the's accusations that developi countries, the orest countries, the ones th most need urgentction on climate ange are blocking the talks. and i ink in respect of that, we need to be clear th they're not putting blockages on t tracks in front the train. what they're doing is lling the emergency cord tstop the train bere it runs off the cliff at the end of this wk. >> suarez: by the d of this week iwhen leaders from 110 nations will arrive heren copenhagen. prident obama will be among that group looking thammer out a dealo curb global emmissions. today's impasswas resolved afteseveral hours of informal talks. the deloping nations won assurances that wealy nations are notrying to weaken commitments to emissiocuts. >> they weren't blockingthey were just trng to understand e procedure. but it took a veryong time. but now everyone at least understands and is cfortable and thats very important in a process like this, wherehere is quite a lotf tension. so it is worth investingn everybody beinclear. >> suarez: but gaininghat clary took time and british climate secretary miliband
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anothers suggested the boycott did not help. >> the priority nois to get down tthe substantive conversaons. i said earlier today tt negotiators anministers have got to get tir act together. i thinthat remains the case. i don'we are doing a very good job at it so far tod. >>uarez: earlier, former vice prident al gore laid out a new slide show report arctic ice melting. he said the arctic iceaps could disappear duri summer months 5 to 7 yearfrom now: >> it's almost like bld spilling out of a bo along the east coast of eenland there and it's gone in less than 30 years fr this to this. so on a gional basis this means a dramatichange in the he absorption from the sun during the summertim >> suarez: and aga today, there re protests by those who warned failure means
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catastrophe. greenpeace protesters marcd outside thconference, dressed as the four horsemen of th apocalypse. >> woodruff: next, aajor environmental dilemma,he production of scure but valuab minerals called rare earth. ndsey hilsum of independent television news reportfrom chin which produces nearly all thworld's rare earth. >> reporter: it doesn'look very green, rare eth procesng in chinis a messy, daerous, polluting business. uses toxic chemicals, acids sulfates, ammoa. the rkers have little or no protection. but without re earth, copenhag means nothing. you buy a prius hybrid c and think you're savg the planet.
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but each mor contains a kilo of neodymiumand each battery more tha10 kilos of lanthanum, rare ear elements from china. green mpaigners love wind turbines but t permanent maets used to manufacture a three megawatt turbi contain somewo tons of rare earth. the he of china's rare earth research institute showse one ofhose permanent magnets. he's well aware of the issue >> ( trslated ): the environmental oblems include air emissions with harmful elements such as fluine and lphur, waste water that containsxcessive acid and radioactive materials too. china meets 95% of the wor demand for rare rth, and most of the separation d extraction is de here, so the pollution stays in chi too. reporter: the authorities gave us a dvd of baiyun o in ner mongolia where most of t world's rare ear is mined
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along with iron ore. they wouldn't let us filit ouelves. but baotou, a hundred miles ay, we found the frozen tailing lake where rare eah mixes with mudwaiting for procesng at nearby factories, tenologies we all use like computs, mobile phones and engy saving light bulbs use rarearths processed here, and local llagers whose farmland has been ruined by spage from thlake pay the price. >> ( transled ): the baotou environmental protection beau tested our wer, and they concluded at it wasn't fit for people or animals to drinkor for irrigation >> reporter: forhose who rememberhe old life, its hard to understand. the authoritiepay compention, acknowledging that the land has been ined but they hav't yet relocated the villers. >> translated ): rare eah is the country'resource, but
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sml people like us need to eat too. weive on farming, but the crops no longer grow, d we will go hung. >> reporter: at a rare eth conference in ho kong, the talk is of how to redu dendence on china, which achieved 95% domince by undercutting other pducers. if the purpose ito lower our dependence on foreigoil and all were doing iput hybrid cars on the road that need chinese rare eth materials, ar't we inter-trading one dependen for another? >> repter: high on the frozen steppe oinner mongolia, a huge wind farm, chinas aiming to the world leadern wind energy. chinese negotiatorat copenhagenay resist political commitments, buthe governments alady subsidizing new technologies to boost the economy d be sustainable. deal or deal at copenhagen, there's going to be an incased demand for wd turbines in china and tside.
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but whathe chinese want to ensure is that they're n just providing thessential raw materials, the rarearths, and doing the manufauring but they also have acce to the most advaed low carbon technologies we were shn plans for what they're calling the silicon valley of rare earth, a high tech industrial pa in baotou, to aract international investors. this year, there was an oury when the chineseaid they would restricthe export of rare earth to conserve thr supply, and make foreign cpanies produce thr high end technologies here in chi. >> ( translat ): although ina has the largest reserves we only have 50%f global deposits we are supplying too mucrare earth and it not sustainable, we must restrict export. the writinon the wall says: become the leader of the wor in the rare earth indust.
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but china can't prode enough for everyone anymore, and if governments e serious about w carbon technologies, other countries will havto start producing. >> ihink that if we don't get a couple of projectsp and running very very qukly, there's going to be ve severe shortagef rare earths in the world, and all the clean energy technologies at we're leslating, that we're trying to impleme through policy anges are not going to be possible. >> reporter: champions of a w carbon future have yet to ke up to the environmenl price chinese rkers and villagers are ying. at copenhagen politiciantalk of cutting carbon emisons, but they can't meet any rgets without rare earth - a that means a stainable supply and not all from china. >> lehr: now, the passing of a gianin the world of economics. our economics correspondent paul solman intervwed
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pa samuelson a number of times over the yearsnd begins with his own look back. >> reporter: paul saelson, america's firsnobel laureate in economics i1970, and about as celebrated and twining a member of e discipline as ever there was. an mit professor f 69 years, his emphasis on mathrove economics down aath that has madet more scientific, more technical, more abruse. but his breakthrough, plainspoken tebook of 1948 also made economs accessible to millions and sold the ias of england's johmaynard keynes that government ays a key role in managing the ecomy. samuelson himself seemedo know and rememb everything, everyone. nobel bob sow was among his best friends robert merton, one ohis students. and last year at aoston university conferencwith both them, heas his usual dazzling,
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endlessly amusednd forever young self in fusing to speak to the topic: "what rerement means to me." >> what retirent means to me! i never obeynstructions on what i should ta about because only after irow up will i generate notns about what my own retirement wl mean to me! >> reporter: samuels sat down with mbefore the panel, just a month after the crash '08 had begun in earnest. >> i'meally very realistic about the mess tt we are in. people compare iwith the great depression. but the walltreet shenanigans this time are mu worse and people like me, who ved through the greadepression as
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a young, budding, nd of bright economist are in greatemand ( laug ) because the othepeople ( laug ) don't have a clue as, as to what this ki of situation is >> reporter: well, what diwall street do th time that it didn't do last time? this is the first me ever that this happened after e and i have to use my wds very carefully: fiendish, frkenstein, monsters of financiaengineering had been created, aot of them at mit, some of them by people le me. and the are marvelous things which can be used topread risks ratially, and in that sense reduce riskiness. but the frankenstein part the ory is that they also are
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maelous things, samson-like, to blind y. you don'know what you're doing. all trsparency disappears. what's happened this last ght years is an solutely unnessary thing. with centrist, reasonae behavior >> reporr: and regulation, you mean? >> regulation, monitoring d punishing therwould have been much, much less trouble. i'm not sure that all the fiendish stuff could have en picked up by centrist regulators, buyou don't have toe perfect in anything in economic life. if, if you snd 70 years in ecomics you'll understand th. >> reporr: i once misquoted you to yourself by sing that you'd id when asked, how come if you're so smart, yore not rich?
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you'd sa, but i am rich. what i say is, if you're so rich, w come you're so dumb? >> repter: paul samuelson died yestday of congestive heart failure at his home in massachusetts. he was 94. >> lehrer: david warsh h more on paul saelson. he's an economics urnalist with hiswn web site economic principals. he's a formecolumnist for the "boston globe" who knew samuelson. >> did walsh, welcome. what's the most important thing we suld all know about paul samuelsson? >> oh, gh, jim, he was a warm and generous pson, i gus is the most important thing. >> lehrer: what wa his principles thrust of his economics, wt was he up to? >> he was a remarkable guy. he was -- the are four people to conjure with in
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20th century economicsjohn maynard keynes was the one who influenc policymakers the most b he died in 1946. paul samueson and milton freedman were the other tw eedman probably had the greatest infences on ode citize. kenneth arrow is the fourth name. he was smurly the most important with respect t just economic theory. but paul samuelsson really changethe way the economists tald to each other, and t things that they tried to . the y they tried to manage the economy. >> lehrer: cnged in what way? what was his -- the bi change that at t generated? >> well, theig change was rmal methods. wawas beginning long before hcame along but paul samuelsson was rn at the right me. he was born in9150 in gary, inana. went to the univerty of chicago when it s still a big 10 fooall power, in 341. graduate -- 193 graduated 1935, he already pubshed a paper technical economics
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in 23ee and went tharvard for graduate school and published another ten inhe years he was in graduate school. and each one was more form and math met call th the last. it really chged the whole discourse of economics in a fair short period of time. >> lehr: discourse -- i'm sorry. no, no. diourse meaning the way that they described the economy, the way they thght of it as a system, the way they behav. and basically he tk the ynesian insights and trslated them into a mathematical form that permitted the asurement and manipulati of things. >> lehrer: you callehim a mixed economwelfare state liral. what is that >> wel that's the opposite of milton eedman which is a nd of entrepreneurial capitalism, libearian. the guys were remarkable. freedman was bn in 1912, samuelsson 15. samusson had life easy. his fatheras a pharmacist,
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a all businessman, prperous family in the midwest until they lost some money in the depressn. freedman grew up in new jerseyhis parents were rchants but he had a hard time of it when he went off to the univeity of chicago where he met samueson. head to borrow money from his sister to get there and hean out of money in the deprsion after one year. got a fellowship fornother year but aer that he had to leave sool all together he didn't t another job until 19. another academic job. samuelsson othe other hand waone of the first eight guys to get a tional research council fulride fellowship. and went straight to hvard, ayed there, went down to m.i.t. in 1946 and had a relatively easy time of it >> lehrer: but on his thry, on his ecomic theories, he was basically a guy o believedhat it could be controlled on -- in a centraway, that government anregulation could have an imct rather than laissez-faire. >> yes, r. nojust that it could be but that it shld be.
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and that he knew how to do it. he was very much an econic management guy i mean whawe call the new economics ich was sort of on everybody's lips in the '60s when kennedy me, kenny to whom samuelsson was the principal advise are. the whole ea was that governmentould regulate the vel of demand that there uld be -- there wod be insufficiencys periodically but it cod control with fcal policy, principay, by raising and lowering tes . >> lehrer: i wasust going y paul solomon we just have a minute or sleft here, he mentioned, anhe he up -- paul samuelsson holding up the big book th he wrotethe big textbook. how would you statthe influence ul samuelsson had on theducation of economists through m.t. and elsewhere? well, he had enormous affect. he wrotewo books, a book called econocs foundation for gradua students and economs
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introductory analysis and stu. he understood that he, through his influence sort of controlled economics. he said to monce, he said mion understands that in ordeto reach other economists he's t to come rough me, meaning through tenical journals. freedm wrote a very inuence book in 1962 called monetary history of e united states but after that, he rlly dealt directly with the blic by writing a book called capitalism and freedom and later the famous televion series free to choe. >> but your poinis that samusson's impact was more thugh the teaching of economics,hrough what, through the colleg, universities. >> wl, through text books. i mean almost evy textbook is based on his introdtory textbo, mainly through research. he influenced at was written in thnical jourls. and that in turn determine who winds up in theconomic policy. a whole bunch of advising obama or mit econosts.
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>>ll right. david walsh, tnk you very much. >> thanks , jim >> woodruff: and finally tonight, atory about important new research spurred by th search for a swine f vaccine. scientists think it mit lead to a universal flu vaccine ray suarez repts. >> whewayne and his team identified a few antbodies out ofhe billions of collected that combined with ten major flstrains, they were elated. d mystified at the same time. nce flu viruses and the human antiodies they spark are all different, t discovery ses to defy gic how is it that we would have aanti-body that would be reactive to all these different types influenza .
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>> repter: scientists know that human anti-bodys atta themselves to thindividual shapes of e viruses protei, especially the head of the h oraglutinin. but since the head's shape variesrom virus to virus how cot anti-bods found bind to off them? the te carefully studied every part of thvirus until the explation became clea >>he anti-bodies did not bind to the globular hea where most of the immune system directs its ergies, t these anti-bodies were uniquely targeted to the stem. and most imporntly, to the chinery in the stem that allows the virus to actual netrate the host cell . and since the stem is one element of the vus that does not change, the hopis that this region can be th target of a new ccine. >> be le to get durable, li-long immunity and not
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seasonal immity as we do right no >> woodrf: that excerpt part of a documentary out the h1n1 virusalled >> woodruf that excerpt is rt of a documentary about th h1n1 virus calle"anatomy of a paemic." it airs toght on most pbs stations. >> lehrer: again, e major developments of the y. president obama caed top executivesrom major banks to the white house. he challenged themo lend more moneand to support an overhaul of the regulatory syst. wes fargo announced it will pay back l of the federal rescue aid it received, tigroup made a similar announceme earlier in the day. and iran announced it will prosecute three amerans who crossed e border from northern iraq last summer. their families said theyere innocent hiks. the newshour connues always online hari sreenivasan in our wsroom has what on our new website. ri. >> sreenivan: all this week on paul solman'making sense page. we're asking leadingconomists to make prictions for 2010. tonit: where will the economic crisis striknext?
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al, you'll find paul's personal rememberance of economist paul samlson. and before hleft for copenhen, ray suarez joined me at the rundown to talkbout the h1n1lu documentary that's airing tonig on pbs. we've launchedn "anatomy of a paemic" web site, where you can as quesons to the head of flu reonse at the cdc. dr. anne schuchat and flexpert dr. miael osterholm. you cavisit us at >> woodruf and that's the wshour for tonight. i'm judy woodruff. >> lehrer: and i'm jim lehr. we'll see you on-lin and ain here tomorrow evening. thank you and good night majofunding for the pbs newshour is providedy: >> wt the world needs now is energy. the energy to get the econy humming again. the energy ttackle challenges like clima change.
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what is that ergy came from an ergy company? evyday, chevron invests $62 million in people, in ideas-- seeking, teaching, building. fueling grth around the world to me us all ahead. this is the power of human energy. chevron. >> thiis the engine that connects abundant grain fromhe american heartnd to haran's be selling whole wheat, while keepin60 billion pounds of carbon out of the atmosphe every year. bnsf, the enginehat connects us. >> what makes us an enne for the econom plants across amica. nearly 200,0 jobs created. we see beyond cars. and monsanto
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grant thornton. anby the alfred p. sloan foundation. pporting science, technology and improved ecomic performance d financial literacy in the 21st ctury. and with the ongng support of the institutions and foundations. and... this program wasade possible by t corporation for public broadcasting. and by contributionso your pbs statn from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access gup at wgbh
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