PBS NewsHour - 2008-10-30

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

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[0:05] [music]

[0:10] Good evening. I'm Jim Lara. On the

[0:12] NewsHour Tonight, the news of this

[0:14] Thursday [music]

[0:15] with more on today's developments on the

[0:17] economy and the markets. Then, three

[0:19] political takes. The presidential

[0:22] candidates continue [music] to make

[0:23] their case. The humor side with Lauren

[0:26] Michaels and Seth Meyers [music]

[0:28] live from New York. and the young voters

[0:30] story. Plus, back to the economy, a Paul

[0:33] Salman conversation [music]

[0:35] about the Great Depression.

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[2:16] you.

[2:21] >> The US economy today gave the clearest

[2:23] sign yet it's moving into recession. The

[2:26] Commerce Department reported economic

[2:28] activity fell in the third quarter for

[2:30] the first time since 2001. The gross

[2:33] domestic product was down 3ten of a

[2:35] percent from July through September.

[2:38] Consumer spending was a driving force

[2:40] behind that downturn. It fell more than

[2:42] 3%, the most in 28 years. The GDP number

[2:47] was actually better than expected, but

[2:49] the president's top economic adviser,

[2:51] Edward Lazier, said there's no question

[2:53] the economy has gotten significantly

[2:56] weaker. We believe that we're going to

[2:58] see a few tough months uh ahead. Uh but

[3:01] we are trying to take the steps that

[3:03] will uh help the next administration

[3:05] start off on the right foot and we think

[3:07] that it is realistic to think that

[3:09] sometime early in the term of the next

[3:11] president uh we can start to see solid

[3:13] growth again. Plazier also defended the

[3:16] federal rescue plan against criticism of

[3:18] how some banks are using the funds. So

[3:22] far, the Treasury has committed $ 160

[3:24] billion to buy stakes in banks to get

[3:27] them lending again, but the Washington

[3:29] Post and others reported more than half

[3:32] the money will go to pay dividends over

[3:34] the next three years. Lazir said the

[3:36] government is watching closely to make

[3:38] sure there are not abuses. Wall Street

[3:42] mostly shook off the day's economic news

[3:44] and focused instead on worldwide cuts in

[3:47] interest rates. The Dow Jones Industrial

[3:50] Average gained more than 189 points to

[3:52] close above 9180. The Nasdaq rose 41

[3:56] points to close at 1698.

[3:59] Stock markets in Asia also scored big

[4:02] gains. Indexes across Europe were up

[4:04] too, but not by much. American Express

[4:08] announced today it's cutting 7,000 jobs

[4:10] in the face of falling earnings. That's

[4:13] about 10% of the credit card and

[4:15] financial service firms global

[4:17] workforce. But oil giant Exxon Mobile

[4:20] posted another record profit of nearly

[4:23] $15 billion in the third quarter. The

[4:26] price of oil peaked during that period

[4:28] before falling sharply. The governors of

[4:31] six states appealed today for immediate

[4:33] action to help automakers. They warned

[4:36] of unmanageable disaster without it. The

[4:39] warnings came from the governors of

[4:41] Delaware, Kentucky, Michigan, New York,

[4:43] Ohio, and South Dakota. They wrote to

[4:46] Treasury Secretary Pollson and Federal

[4:48] Reserve Chairman Bernani. The government

[4:51] of Japan announced an economic stimulus

[4:53] package of $275 billion today. The prime

[4:58] minister said it's essential to boost

[5:00] the world's second largest economy.

[5:06] The current state of the economy is like

[5:08] being hit by a tempest that comes once

[5:09] in 100 years. The economy was hit by a

[5:12] tempest that started from the US. The

[5:15] Japanese government will tackle this

[5:16] with all its efforts and we hope to gain

[5:18] the understanding of all the Japanese

[5:20] people.

[5:21] >> Under the plan, all Japanese families

[5:24] receive cash payments and small

[5:26] businesses get loans and tax credits.

[5:29] The US presidential candidates focused

[5:31] on the economic news with just five days

[5:34] to go. Republican John McCain campaigned

[5:36] across Ohio. He cited Exxon Mobile's

[5:39] record profits and he criticized

[5:42] Democrat Barack Obama for backing tax

[5:44] breaks for oil companies. Obama traveled

[5:47] from Florida to Virginia to Missouri. He

[5:50] said bad news about the economy would

[5:52] only continue under McCain. We'll have

[5:54] more on the campaign later in the

[5:56] program. Rebels in Congo today demanded

[5:59] direct talks with the government. A

[6:01] fragile ceasefire held as UN and African

[6:04] leaders tried to prevent another allout

[6:07] war. The rebels were poised outside the

[6:10] eastern city of GMA where UN

[6:12] peacekeepers patrolled. We have a report

[6:14] from Jonathan Miller of Independent

[6:16] Television News who's just outside GMA

[6:19] tonight.

[6:20] Today we drove four hours from Kaggali,

[6:23] the Rwanda capital, west towards the

[6:25] Congolese frontier and all the way we

[6:28] were going against the flow. There were

[6:29] eight agency convoys heading the other

[6:31] way. When we made it down to the border,

[6:34] we were met by people who' just come

[6:35] from the other side and they said,

[6:36] "Look, it's not safe to cross. There's a

[6:39] widespread fear tonight of the looting

[6:41] and the mayhem that took place last

[6:43] night under cover of darkness."

[6:46] Gomer tonight is a city under siege. It

[6:49] is quiet but edgy and someone I spoke to

[6:51] who just left the city tonight said it

[6:53] had the sense of a place about to blow.

[6:56] I'm standing right on the border now and

[6:58] I've been in touch with a congalles

[7:01] government soldier who is just about 50

[7:04] km south of GMA and he says the belief

[7:06] of the congalles military is that the

[7:08] forces of Lauren Kunda the Tootszie

[7:11] warlord who has led this rebellion have

[7:14] now completely surrounded and

[7:16] infiltrated GMA. Lauren Enkunda has

[7:18] today said that he will enter the city

[7:20] unless he can get a guarantee from UN

[7:22] peacekeepers inside GMA that they will

[7:25] ensure a ceasefire and security. Now he

[7:29] says that he wants to talk but the

[7:31] likelihood is the government of Congo

[7:33] will not want to do this. It won't want

[7:35] to negotiate down the barrel of a gun.

[7:37] All this means government forces still

[7:39] in the city are very very jumpy. They

[7:42] still control the airport, but once

[7:44] Enkunda enters the city, they'll have

[7:45] nowhere left to run. And certainly, they

[7:47] won't be running across into Rwanda,

[7:49] which has been again accused today by

[7:50] Congo, of backing the rebels. Now, while

[7:53] all this has been going on, a

[7:54] humanitarian disaster has been unfolding

[7:56] with 200,000 extra displaced people to

[7:59] add to more than a million already on

[8:01] the move because of fighting. The

[8:03] European Commission said today it's

[8:05] sending $5 million in aid for the

[8:07] refugees in Congo. And the UN asked for

[8:10] reinforcements to support its 17,000

[8:13] troops there, its largest peacekeeping

[8:16] mission in the world. Taliban fighters

[8:19] attacked a government building in the

[8:20] capital of Afghanistan today, killing at

[8:23] least five people. They shot their way

[8:25] into the Ministry of Culture in Kbble.

[8:28] One of them blew himself up. In addition

[8:30] to the dead, more than 20 people were

[8:32] wounded. Afghan President Cararzi said

[8:35] the attack was meant to undermine

[8:37] efforts to hold talks with the Taliban.

[8:40] The city of Philadelphia today

[8:42] celebrated its first professional sports

[8:44] championship in a quarter century. The

[8:47] Philadelphia Phillies won the World

[8:49] Series last night, 4 to3 over Tampa Bay.

[8:53] Afterward, thousands of fans poured into

[8:55] the streets. Most of the celebration was

[8:57] peaceful, but police did arrest 76

[9:01] people. And that's it for the news

[9:03] summary tonight. Now, financial matters.

[9:05] The candidates's words of the day, humor

[9:08] on late night television, young voters,

[9:11] and the Great Depression.

[9:21] Those new signs that a recession is

[9:23] underway. Jeffrey Brown has our economy

[9:25] update.

[9:27] >> As the e as the consumer goes, so goes

[9:29] the economy. That was true in the good

[9:31] times and now as the consumer goes not

[9:34] well at all, it is a clear indication

[9:36] that bad times are indeed upon us. With

[9:39] me to go over today's numbers is New

[9:40] York Times economics columnist David

[9:42] Leonard. Welcome.

[9:43] >> Thank you. You wrote today that the

[9:45] longest American shopping spree on

[9:48] record is over.

[9:49] >> Yeah, it is. I mean, it's in many ways

[9:51] today's report was the end of an era

[9:52] dating all the way back to the early

[9:54] 90s. Consumers have increased their

[9:56] spending every single quarter. They did

[9:58] it through the recession of 2001. They

[10:00] did it even as incomes were not growing

[10:02] very quickly during this recent

[10:04] expansion. And they did it in many ways

[10:06] by taking out more debt. And that debt

[10:09] is behind a lot of this housing crisis.

[10:11] And

[10:11] >> that propped us up even that propped us

[10:13] up over the last few years. Right.

[10:15] >> That's right. In some ways, you can

[10:16] think about it as we were stealing from

[10:18] future consumption over the past decade.

[10:21] And now we paid the price for that. Some

[10:23] forms of debt are great. You can go to

[10:24] college, you can buy a car, but some

[10:26] forms are less good. And so what we now

[10:28] see is is a very sharp pullback by the

[10:30] consumer. As Jim mentioned, it's the it

[10:32] was the biggest decline in consumer

[10:33] spending in almost 30 years. And it's

[10:36] not clear exactly when that's going to

[10:37] end.

[10:38] >> And that helped pull, of course, the

[10:39] whole economy down. And now we have the

[10:40] drop in GDP. What other what what else

[10:43] can you read out of today's numbers?

[10:44] There were also u jobless claims.

[10:46] >> That's right. So so far what the story

[10:49] has really been has been about the

[10:50] financial crisis dating all the way back

[10:51] to last August, more than a year now. I

[10:54] think the story is starting to shift a

[10:55] little bit. I think it's going to shift

[10:57] from the financial crisis, assuming that

[10:59] that crisis doesn't get worse, to really

[11:01] the the the household sector and we're

[11:03] going to see increasing job cuts and

[11:05] we're going to see incomes failing to

[11:06] keep pace with inflation. And that jobs

[11:09] report that you mentioned today is

[11:10] weekly jobless claims. They're very

[11:12] high. They're really at a recession

[11:13] level.

[11:14] >> People have been talking for weeks and

[11:16] some for months about whether we are in

[11:18] fact in a recession. Today's news would

[11:21] give more credence to the that notion.

[11:23] Correct.

[11:24] >> Yes, we are in a recession. It's almost

[11:25] certain. I talked to Robert Gordon, a

[11:27] Northwestern University economist

[11:29] recently who's on the committee that

[11:30] officially decides and he said we're

[11:32] clearly in a recession. I think the

[11:33] other committee members will agree with

[11:35] me when we meet. The only question is

[11:37] really when did it start? Did it start

[11:38] at the beginning of this year or the

[11:40] middle of this year?

[11:40] >> Because they go by this definition

[11:42] usually of two bad quarters in a row.

[11:44] >> Two bad quarters is actually sort of the

[11:45] layman's definition. The official one is

[11:47] a pronounced protracted widespread

[11:50] decline in economic activity

[11:51] >> in the eyes of this committee. in the

[11:53] eyes of this committee and we all sort

[11:54] of accept its definitions. It's used by

[11:56] politicians and in the media and and so

[11:59] obviously the big question is not so

[12:00] much when it began for the ordinary

[12:02] person but when does it end? Now the uh

[12:04] you get bad news like this today and yet

[12:06] the markets were up right

[12:07] >> confusing people yet again right

[12:10] >> why should this be different from other

[12:11] days I suppose one reason that was cited

[12:14] was it well it was bad but it wasn't as

[12:16] bad as we thought

[12:17] >> right it was marginally better than we

[12:19] thought and I think in some ways the

[12:20] more important thing is that at a moment

[12:23] like this people are fearing that

[12:25] there's something they don't know and so

[12:27] I think it was actually a bigger deal

[12:28] that it was no worse than people thought

[12:31] than that it was marginally better it's

[12:32] a relief

[12:33] And so people look at this report and

[12:35] they say, "Wow, there isn't some other

[12:36] scary economic thing out there that we

[12:38] didn't know about that we've just

[12:39] learned about." Although I think as the

[12:41] economist at Goldman Sachs said, this

[12:43] report was not as good as the market

[12:44] reaction implied. The economy is really

[12:47] not strong right now. And this report

[12:48] confirmed that.

[12:49] >> Well, I wondered, I mean, another way of

[12:51] thinking about these things sometimes is

[12:52] the GDP GDP numbers look backwards.

[12:55] They're looking back a few months,

[12:57] whereas markets we're always told, are

[12:58] trying to predict the future.

[13:00] >> That's right. And I think there's many

[13:02] people in the markets now who feel like

[13:03] the markets have overshot and that the

[13:05] stock market is very cheap. I think when

[13:07] you look at it historically that the

[13:08] market is actually just about average

[13:10] priced. And so I think people shouldn't

[13:11] have too high expectations about where

[13:13] it goes from here. I think it could go

[13:15] higher, it could go lower, but I don't

[13:16] think actually the market is cheap. I

[13:18] think what we've seen over the last few

[13:19] days is some sense in the market that

[13:21] maybe the declines had gone too far too

[13:23] fast.

[13:24] >> Now there is continuing talk about a

[13:26] potential government plan to step in to

[13:28] help troubled homeowners. Yes,

[13:29] >> we talked about it on the program the

[13:31] other night about the various proposals

[13:32] that are out there. Any news on on where

[13:35] that plan stands?

[13:37] >> Well, the government isn't coming

[13:38] forward very quickly with details on the

[13:40] plan. They they keep inching a little

[13:41] bit more out and saying we'll give you

[13:43] more soon. It seems to be that the FDI,

[13:46] the agency that insures bank deposits,

[13:48] is pushing this and that the Treasury

[13:50] and the White House are a little bit

[13:51] more resistant to it. There's no

[13:53] question that the Treasury and the White

[13:55] House have been behind the curve in

[13:56] responding to this crisis. And so I

[13:58] think to some extent they no longer get

[14:00] the benefit of the doubt. But I also

[14:01] think they're doing something important

[14:03] here. Coming up with a bailout for

[14:04] homeowners is fantastically difficult.

[14:06] It introduces all sorts of potentially

[14:08] dangerous incentives in which people who

[14:10] wouldn't otherwise lose their homes

[14:12] would in fact get an incentive to stop

[14:13] paying their mortgage.

[14:14] >> It's very hard to get it right.

[14:16] >> It's very hard to get it right. And so

[14:17] the fact that the administration and the

[14:19] Treasury are are pushing to make sure

[14:21] the details of this are going to be

[14:23] okay, I actually think is quite

[14:24] important. One last thing uh and and

[14:27] also Jim mentioned it in our news

[14:28] summary is this question of banks that

[14:30] took money have taken money in in the

[14:32] rescue plan and the reports are that

[14:34] they're that they're not using it for

[14:36] loans. In fact, they're giving out in

[14:38] dividends to shareholders. Um how much

[14:41] of a stir do you feel that is causing

[14:44] even political resentment out there over

[14:47] the way this is the way this is

[14:48] developing?

[14:49] >> I think it's going to depend on a great

[14:51] degree on where this goes from here. The

[14:54] credit crisis has actually eased just a

[14:56] little bit in the last couple weeks. If

[14:58] that keeps happening, I think people

[15:00] aren't going to be worried so much about

[15:01] whether this dollar went to dividends or

[15:03] went to new loans. But if it doesn't

[15:05] ease, then it's really going to look

[15:06] once again like the latest plan that the

[15:08] Treasury has come up with isn't quite

[15:10] the right plan and it's going to have to

[15:12] shift again. Now, even if that's the

[15:13] case, the good news is 5 days from now,

[15:16] we're going to have a new administration

[15:17] coming in and we're going to have a

[15:18] whole injection of fresh blood, whether

[15:20] it's a McCain administration or an Obama

[15:22] administration. And the story is going

[15:24] to start to change pretty

[15:25] >> one way or another. This is falling to

[15:26] whoever's next, right?

[15:27] >> Yes, it is.

[15:27] >> All right. David Leonard of the New York

[15:29] Times. Thanks very much.

[15:30] >> Thanks for having me.

[15:33] [music]

[15:39] >> And now to that [music] presidential

[15:40] race. With just 5 days to go. Ray Suarez

[15:43] has our campaign report.

[15:46] >> Barack Obama bounced across battleground

[15:48] states today. First up, Florida. How's

[15:51] everybody doing, Florida?

[15:53] >> Part of Obama's closing argument in

[15:56] Florida and elsewhere includes a pair of

[15:58] new television ads. One touts his

[16:01] support from Republicans like Warren

[16:03] Buffett and Coen Powell. The other

[16:06] suggests John McCain would just

[16:08] duplicate the economic policies of

[16:10] President Bush. Wonder where John McCain

[16:12] would take the [music] economy? Look

[16:14] behind you. John McCain wants to

[16:16] continue George Bush's economic

[16:18] policies. as Obama played off the ad at

[16:21] a rally in Sarasota this morning.

[16:23] >> If you want to know where John McCain

[16:25] will drive this economy, just look in

[16:28] the rear view mirror.

[16:31] >> Because when it comes to our economic

[16:33] policies, John McCain has been right

[16:36] next to George Bush. He's been sitting

[16:39] there in the passenger seat, ready to

[16:40] take over every step of the way,

[16:44] >> voting for the Bush tax cuts for the

[16:46] wealthy that he once said he opposed.

[16:49] voting for the Bush budgets that sent us

[16:52] reeling into huge deficits and huge

[16:55] debt, calling for less and less

[16:58] regulation 21 times just this year. In

[17:02] fact, after 21 months and three debates,

[17:07] John McCain has still not been able to

[17:09] tell the American people a single major

[17:12] thing that he would do differently from

[17:14] George Bush when it comes to the

[17:16] economy. Think about it.

[17:18] >> [cheering]

[17:19] >> Think about it. You know his attacks on

[17:21] me, but you have no idea how he would do

[17:24] anything differently from George Bush

[17:26] because he doesn't have any ideas that

[17:28] are different from George Bush when it

[17:29] comes to the economy. [cheering]

[17:36] So, you've got to ask yourself, after

[17:40] nine straight months of job losses, the

[17:43] largest drop in home values on record,

[17:47] wages lower than they've been in a

[17:49] decade. Why would we keep driving down

[17:52] this dead end street?

[17:53] >> We need to create wealth in this

[17:55] country. John McCain campaigned in

[17:58] another tossup state, Ohio, where he had

[18:01] four events scheduled today. At a

[18:03] morning rally in defiance, McCain seized

[18:06] on the news that Exon Mobile earned a

[18:08] record profit of nearly $15 billion last

[18:11] quarter, slamming Obama for his past

[18:14] support of an energy bill that included

[18:16] oil industry tax breaks.

[18:19] >> Today, Exon Mobile reported record

[18:21] profits. Senator Obama voted four

[18:24] billions in corporate giveaways to the

[18:27] oil companies. I voted against it when

[18:30] I'm president. We're not going to let

[18:32] that happen. As I said, we're going to

[18:34] invest in all energy alternatives,

[18:36] nuclear, wind, solar, tide. We'll

[18:39] encourage the manufacturer of hybrid,

[18:40] flex fuel, and electric automobiles. And

[18:43] we will restore the automobile industry

[18:46] in America to its preeminent position.

[18:48] And we must do that for the future of

[18:50] our children and our grandchildren. And

[18:53] we will lower the cost of energy within

[18:55] months. And we'll create millions of new

[18:58] jobs in America and get this economy out

[19:00] of the ditch.

[19:05] And last night in West Palm Beach,

[19:07] Florida, McCain went after Obama not on

[19:09] policy, but programming. The Republican

[19:12] dismissed the Obama campaign's prime

[19:15] time infomercial before it even aired,

[19:17] saying the Democrat could afford it only

[19:20] because he opted out of public

[19:21] financing.

[19:23] Now, tonight, we can all look forward to

[19:25] my opponent's performance in a

[19:27] television infomercial.

[19:30] It used to be that only rain or some

[19:33] other act of God could delay the World

[19:35] Series, but I guess the network execs

[19:38] figured an Obama infomercial was close

[19:41] enough.

[19:42] As with other infomercials, he's got a

[19:45] few things he wants to sell you. He's

[19:48] offering government-run health care, an

[19:50] energy plan guaranteed to work without

[19:53] drilling,

[19:54] and an automatic wealth spreader that

[19:57] folds neatly and fits under any bed.

[20:03] When you're watching this gauzy feelgood

[20:06] commercial, just remember that it was

[20:08] paid for with broken promises. Senator

[20:11] Obama signed a piece of paper committing

[20:14] to public financing of his campaign. if

[20:17] I did. Twice he looked the American

[20:20] people in the eye and said he would sit

[20:22] down with me before he abandoned public

[20:25] financing. He didn't mean a word of it.

[20:29] When it was in his interest to break his

[20:31] promise, he tossed it aside like it

[20:34] didn't mean a thing. He is the first

[20:37] candidate since the Watergate scandal to

[20:40] abandon the public financing system. and

[20:44] his campaign is now being flooded with

[20:47] hundreds of millions of dollars in

[20:49] undisclosed and questionable donations.

[20:53] >> His campaign has directly profited from

[20:56] his broken promises. And because of

[20:59] that, the American people have to ask,

[21:02] what does the broken promise behind

[21:05] tonight's infomercial

[21:07] say about the value of his other

[21:09] commitments?

[21:10] >> We've been talking about the same

[21:12] problems for decades. The halfhour

[21:14] telecast called Barack Obama American

[21:17] Stories included a mix of Obama

[21:20] appearances, testimonials from

[21:22] supporters, vignettes about average

[21:24] Americans, and ended by cutting live to

[21:27] an Obama event in Florida.

[21:29] >> America,

[21:31] the time for change has come.

[21:35] And to all of you and all of those

[21:39] who've joined us from across the

[21:41] country, [cheering] in six days, we can

[21:44] choose an economy that rewards work and

[21:47] creates jobs and fuels prosperity,

[21:50] starting with the middle class.

[21:52] >> The feed aired on eight broadcast and

[21:55] cable networks, costing the campaign at

[21:57] least $3 million. According to early

[22:00] ratings, approximately 30 million people

[22:03] watched the program.

[22:05] Some three hours later, Obama campaigned

[22:08] in CMI, Florida, where he was joined on

[22:11] the trail for the first time by former

[22:13] President Bill Clinton. [cheering]

[22:15] Obama closed out his night with an

[22:17] appearance on the Daily Show with John

[22:19] Stewart. The host asked Obama if he was

[22:22] concerned that some Americans would not

[22:24] vote for him because of his race,

[22:26] including Obama himself since he's half

[22:29] white.

[22:29] >> Are you concerned that you may go into

[22:32] the voting booth and

[22:35] I won't know what to do.

[22:36] >> Your your white half will all of a

[22:37] sudden decide

[22:39] >> I I can't do this.

[22:41] >> Yeah. Yeah. It's a problem.

[22:44] >> What is it?

[22:45] >> I said it's a problem.

[22:47] >> Tomorrow, Obama's in Iowa and Indiana.

[22:50] McCain spends the day in Ohio.

[22:54] >> And that brings us to tonight's word,

[22:56] humor. And a Judy Woodruff. Late night

[22:59] comedy shows have long been places for

[23:01] candidates to be seen and to be

[23:03] skewered, and this year is no exception.

[23:06] Here's a clip from last weekend's

[23:08] Saturday Night Live skit poking fun at

[23:10] Obama's infomercial. It's often play

[23:13] along in person. Two weeks ago,

[23:15] Republican vice presidential nominee

[23:17] Sarah Palin made a cameo appearance on

[23:19] SNL, prompting the show's highest

[23:22] ratings in 14 years. Here's a clip from

[23:25] that night. Joining me now are someone

[23:27] you just saw in that clip. He's Lauren

[23:29] Michaels who created Saturday Night Live

[23:31] 34 seasons ago and he is its longtime

[23:34] executive producer and actor Seth

[23:37] Meyers. He's been with the program for

[23:39] eight years and he's the head writer and

[23:41] anchor of Weekend Update. Thank you both

[23:44] for being with us and I have get my bias

[23:46] on the table right away. I'm a big fan

[23:48] of Saturday Night Live. Lauren Michaels

[23:50] to you first. What if John McCain had

[23:53] chosen somebody else? say Tim Paulenti

[23:56] or Mitt Romney as his running mate,

[23:58] >> it would not have been as much fun.

[24:01] Uh I think that um we would have we we

[24:05] would have dealt with it in the way that

[24:07] we we always do, but I think that uh the

[24:11] choice of of uh Governor Palin was so

[24:13] startling and and uh that the excitement

[24:17] at that convention uh you know just led

[24:20] to everyone paying attention and and uh

[24:24] that was really helpful for us.

[24:26] >> Why why do you think she provides such

[24:28] rich material? Well, I think because uh

[24:32] it's, you know, it started fresh. There

[24:34] was no fatigue with her. I mean,

[24:36] everyone uh got to know her at the same

[24:40] time. There was all those that wild

[24:43] internet, you know, eruptions trying to

[24:45] define her. I think everybody was

[24:47] curious about her. And in in our world

[24:50] um you know most people in the audience

[24:54] um had the idea that she should be

[24:56] played by Tina Fay at almost exactly the

[24:58] same time and uh started you know

[25:02] letting us know that and u uh I think if

[25:05] we'd used anyone other than Tina I think

[25:08] the audience would have been

[25:09] disappointed.

[25:10] >> Seth Meyers what what makes one

[25:12] politician easier to impersonate and

[25:15] another one harder? Well, you obviously

[25:18] want hooks and I think Sarah Palin had a

[25:20] lot of hooks. I mean, she was an unknown

[25:22] and we learned a lot about her really

[25:23] fast and um she's also charismatic as an

[25:27] individual and that's more fun for an

[25:29] actor to play than someone who's maybe a

[25:31] more um you know uh uh boring

[25:34] politician. And you know, with somebody

[25:36] like Tina who is a great attention to

[25:38] detail, it worked out really well

[25:39] because she found all the sort of

[25:41] idiosyncrasies of the speech patterns

[25:43] and you know, as a writing staff, there

[25:45] was plenty to write about. So, it really

[25:46] worked out well for us.

[25:47] >> And and Seth Myers, what makes this

[25:50] campaign so rich, so ripe uh for with

[25:55] material?

[25:56] >> Well, I you know, I think that the

[25:57] country is probably a little tired of of

[25:59] um the the current administration in the

[26:01] same way that comedy writers have gotten

[26:02] tired of it as well. You know, um you

[26:05] can only make jokes about people for so

[26:07] long before you seem repetitive. And uh

[26:09] I think this current administration's

[26:11] resistant to change has sort of made

[26:13] them impermeable to comedy recently. Um,

[26:15] so for us as well, I mean, I think the

[26:17] American people got really excited about

[26:19] this election and then they started

[26:20] paying attention to it and the more they

[26:21] pay attention, the more you can sort of

[26:23] make jokes about the minutia and you

[26:25] know that has sort of played into our

[26:27] hands.

[26:27] >> Lauren Michaels, how do you see the role

[26:30] of Saturday Night Live and other comedy

[26:32] shows at a at a time like this, an

[26:34] election like this one? Well, I you

[26:36] know, our uh we're not on every day, so

[26:38] you know, we have the uh you know, the

[26:41] week to prepare for it. And I I I think

[26:44] that, you know, our our job uh is, you

[26:48] know, the show strives to be bipartisan.

[26:51] And I think our our job is to go after

[26:53] whatever happened that week and and

[26:56] who's ever in authority, um that's who u

[27:00] um [sighs]

[27:01] we're looking at. So, I I I think that

[27:05] um there are times when I think we've

[27:07] done it more successfully or less

[27:09] successfully, but I think this election

[27:11] because as Seth said, I mean, when you

[27:13] get 80 million people watching um a

[27:16] debate, uh it means that you know the

[27:19] country's paying attention and um that

[27:22] just makes what we do easier because we

[27:24] can really we can really jump into we

[27:26] don't also have to explain uh the

[27:29] context. You said you strive to be

[27:31] bipartisan. Do you feel an obligation to

[27:35] be evenhanded?

[27:37] >> Yeah. Uh totally. But also, I think that

[27:40] uh you know, I think that the moment

[27:43] that u someone's elected and they

[27:46] whoever the new president is, uh we're

[27:49] in opposition to that. Uh not in any way

[27:52] in an unpatriotic way, of course. Uh but

[27:55] our job is uh we're we're not their

[27:58] friends. I asked about that because and

[28:01] let me come back to you to Seth Meyers

[28:02] on this because back during the

[28:04] primaries there were some when Hillary

[28:06] Clinton was having a tough time against

[28:07] Barack Obama, Amy Polar played Hillary

[28:10] Clinton I think in a fairly sympathetic

[28:12] way gave the press I think a hard time.

[28:16] Um how much blowback did you get as a

[28:20] result of that? Well, that was a unique

[28:21] time because, you know, the very next

[28:23] debate um Senator Clinton mentioned us

[28:25] uh uh by name, which we never sort of

[28:27] had happen before, but we had um you

[28:30] know, we thought the press had been a

[28:31] little hard on uh on her and that. So,

[28:33] we actually did a piece sort of more

[28:35] critical of the press than in support of

[28:37] her, but I feel like when a campaign

[28:38] feels something and then they hear

[28:40] someone else say it, they really grab

[28:41] hold of it. Um that happened in that

[28:44] case. uh you know we uh we weren't

[28:46] really picking a side there but we were

[28:47] trying in that one instance make a case

[28:49] that it seemed like the coverage had

[28:51] been a little unfair um you know but

[28:53] obviously it was you know fun for us to

[28:55] have

[28:55] >> and also taking that that stance uh you

[28:59] know and dealing with what looked like a

[29:01] swoon on the part of the press for Obama

[29:04] at that time it didn't mean that we were

[29:06] pro Hillary we were just pointing out

[29:08] what what seemed obvious to us and and I

[29:10] think that obviously resonated in the uh

[29:12] in the Clinton campaign Do you do you

[29:15] think your impersonations can ever do

[29:17] real damage, be hard for a candidate to

[29:20] shake off?

[29:22] >> Um, I think that uh what happens uh when

[29:27] uh when we do it properly is it starts

[29:29] as an impression and it evolves into a

[29:32] character. Uh, I've said this before,

[29:34] but when Dana Carver used to do uh the

[29:36] first President Bush, um, you know, I'd

[29:40] watch him every week and, uh, and after

[29:42] a while when I'd see the uh, President

[29:44] Bush on television, he was somewhat

[29:47] disappointing. Uh, [laughter] and and I

[29:49] think the same same way with uh, what

[29:52] Daryl has done with President Clinton.

[29:54] uh they capture some aspect that you

[29:58] know the audience again the audience

[30:00] wouldn't be laughing if if it didn't

[30:02] resonate or didn't strike uh true and I

[30:05] think um that after a while you trust

[30:10] those characters um and they they they

[30:13] speak to the audience. Is there anything

[30:15] Seth Meers that's off limits? And I'm

[30:17] thinking specifically Barack Obama's an

[30:20] African-American.

[30:21] Do you have to be specially careful in

[30:24] the way you portray him?

[30:26] >> Well, you know, I think more the most

[30:28] offlimits thing for us is probably, you

[30:30] know, family members of campaigns. You

[30:31] know, that's something that's always

[30:32] tricky on how to handle. Um and, you

[30:35] know, I think race is as sensitive on

[30:36] our show as it is um everywhere in the

[30:39] media, but um we haven't run into too

[30:41] many problems with it yet, certainly.

[30:44] And I think, you know, the essence of

[30:45] the campaign has been uh the McCain

[30:48] campaign trying to define Obama, you

[30:52] know, uh Obama trying to define himself.

[30:54] And I think whoever becomes if if Obama

[30:58] becomes president, I think uh by

[31:01] definition, he would reveal more and

[31:03] more of himself. And I think we would

[31:06] find the ways in which um

[31:09] you know to be funny about that. What

[31:10] are you going to use for material after

[31:12] the election?

[31:14] >> Um, we're gonna um [laughter]

[31:18] um a

[31:18] >> lot of jokes about the economy.

[31:20] >> We're going to jump right on the

[31:21] economy, I think. No, I think that um I

[31:24] I again it it only begins the day after

[31:29] election day, you know, and there's

[31:30] there's, you know, we've been on for 34

[31:33] seasons. Uh there there's always

[31:35] something and um you never know. You

[31:39] know, in in 2000 we were held over for,

[31:41] you know, a couple months. So, uh

[31:44] doesn't look like that's going to happen

[31:45] this time, but you never know.

[31:46] >> Seth Myers, anything to add?

[31:48] >> Uh yeah. Well, it'll it'll certainly be

[31:50] fun for us. I mean, look, everybody

[31:52] loves a contest and uh and that's it's

[31:54] been a great contest so far and you

[31:56] know, I think when one person wins,

[31:58] we'll probably uh turn the focus back

[31:59] onto the final days of the Bush

[32:01] presidency. So,

[32:01] >> yeah. And also, I think that this this

[32:04] Saturday, because it's our last show

[32:05] before the election, I think that

[32:07] there's um I think I think uh we're

[32:12] going to pretty much go all out on it.

[32:13] So,

[32:14] >> yeah.

[32:14] >> Well, I know you're going to have a lot

[32:16] of fans watching uh from around here.

[32:18] And I'm asking what you're going to do

[32:19] about after the election because we we

[32:21] at the NewsHour are asking that

[32:22] question, too.

[32:23] >> Yeah. No. And and and it will be our

[32:25] first week off in a long time. We're

[32:27] we're not on the following weekend. And

[32:28] and I know everyone's really looking

[32:30] forward to that here. I I don't know

[32:32] whether you guys get the same [laughter]

[32:34] same break.

[32:35] >> We're going to keep going.

[32:36] >> Yeah, good luck.

[32:38] >> We'll keep watching. Thank you.

[32:40] >> Lauren Michaels, Seth Myers, thank you

[32:42] both.

[32:47] [music]

[32:51] And now to [music] our third political

[32:53] story of the night, the serious business

[32:55] of the youth vote in the battleground

[32:57] state of Virginia. NewsHour

[32:59] correspondentwami Homeman reports.

[33:03] >> Democrat Barack Obama continues to lead

[33:06] in the polls in the battleground state

[33:08] of Virginia [music] and has said if he

[33:10] wins it, he'll win the presidency. On

[33:12] Tuesday, his ninth campaign trip to the

[33:15] state took him to the campus of James

[33:17] Madison University in Virginia's

[33:19] conservative central region. He talked

[33:22] about being inspired by young voters. In

[33:25] this campaign, I've had the privilege of

[33:26] witnessing what's best in America. I've

[33:29] seen I've seen it in lines that of

[33:32] voters that stretched around schools and

[33:33] churches. I I've seen it in all the

[33:36] young people who cast their ballot for

[33:38] the very first time. And those

[33:40] [cheering]

[33:43] young people seem to be plentiful at

[33:45] every Obama rally.

[33:47] We talked to some before Obama spoke in

[33:50] Leburg, Virginia last week. Lauren

[33:52] Masterson is 24.

[33:54] >> We see ourselves in him. I think even

[33:56] though he is of another generation,

[33:58] people are excited about him because he

[34:00] seems to understand young people.

[34:02] >> Brianna Davenport is 18.

[34:04] >> So I just think that Barack, you know,

[34:06] like his plans and his goals. I actually

[34:08] think that they will make a difference.

[34:10] >> And 23-year-old Evan Ldenbach talked

[34:13] about the Iraq war and Obama

[34:15] >> that he's always opposed the war with

[34:16] McCain. You know, he's um pardon me,

[34:18] McCain's gone with the war, voted with

[34:20] it. So that definitely struck a chord.

[34:22] >> Good to be [cheering] here with you

[34:23] today, Virginia. Thank you.

[34:25] >> When Republican vice presidential

[34:27] nominee Sarah Palin came to Central

[34:29] Virginia on Monday, young supporters

[34:32] such as 20-year-old Trevor Mueller

[34:34] talked excitedly about John McCain.

[34:36] >> More people I know are voting than I've

[34:38] known before. Most of my friends now are

[34:41] 18, 20, 22, and they're actually all

[34:44] going out to vote.

[34:45] >> Cara Snodgrass is 23. But unfortunately,

[34:48] too many people in the younger

[34:50] generation like young and enthusiastic

[34:54] in playing basketball. They won't take

[34:55] the time to sit down and look at the

[34:56] issues. And unfortunately, I think the

[35:00] my wayward friends tend to see Obama as

[35:04] this great change. And he talks about

[35:05] change, [music] but he has yet to tell

[35:07] me or anyone else um in my circle of

[35:10] friends what that change is going to

[35:11] dictate.

[35:12] >> 20-year-old Katie Schwarz also sounds

[35:14] energized by McCain and Palin. Um, I'm a

[35:17] huge huge person for pro-life. Um, I've

[35:21] always believed in it and I really like

[35:23] their stand on that.

[35:25] >> Like the rest of the electorate, young

[35:26] people here in Virginia and nationwide

[35:28] are showing record levels of interest in

[35:31] this presidential race. But any

[35:33] candidate who counts on the votes of

[35:35] young adults faces both opportunity and

[35:37] obstacles. In the last two presidential

[35:40] elections, less than half of eligible

[35:43] adults under 30 voted. That's a 20 point

[35:46] lower participation rate than those over

[35:48] 30.

[35:49] >> You can vote in person absentee Monday

[35:51] through Saturday. Go and vote in person

[35:54] and and they'll be able to help you out

[35:55] without even without your voter

[35:56] registration card.

[35:58] >> Grant Herring knows it's hard to raise

[36:00] turnout among young voters. He's the

[36:02] leader of campus young Democrats at

[36:04] George Mason University in Northern

[36:06] Virginia. For weeks, the group has tried

[36:08] to help students navigate the often

[36:11] confusing maze of registration, early

[36:13] voting, and where to go on election day.

[36:16] Some are among the well over 200,000 new

[36:19] 18 to 29 year olds who have registered

[36:22] in Virginia just this year.

[36:24] >> Get in the mail tonight because I know

[36:26] you're a Virginia Beach voter. So,

[36:27] >> but I've been going back and forth

[36:28] between the two addresses according to

[36:30] >> the young Democrats have contacted many

[36:32] hundreds of potential voters.

[36:34] >> I ain't got to get to class. Sorry.

[36:36] >> But Herring wouldn't predict how many

[36:38] will make it to the campus polling place

[36:40] next Tuesday.

[36:41] >> I don't want to give you an exact number

[36:43] and uh and have you come back and talk

[36:45] to me on election night and say, "Where

[36:46] are all the voters?" But

[36:47] >> it's very difficult to expand the

[36:49] electorate. It's very difficult to go

[36:51] out and uh get people who are not

[36:53] normally engaged in the political

[36:55] process to register and then vote on

[36:57] election day. George Mason political

[36:59] science professor Michael McDonald says

[37:01] despite a sharp increase in political

[37:04] activity on campus most of it for Obama

[37:06] getting young people especially first

[37:08] timers to vote is fraught with

[37:10] difficulty

[37:11] >> we look at the hurdles that are in place

[37:13] for somebody who's never voted before

[37:15] and there many one of them is

[37:16] registration the other hurdle that you

[37:18] have to uh jump over is the actual

[37:20] process of voting and particularly for

[37:23] young people um who are at a college

[37:25] they may have to cast an absentee ballot

[37:27] it. They're going to have to go through

[37:28] the whole procedure of requesting that

[37:30] absentee ballot and then returning it.

[37:32] That can be very difficult for some

[37:33] people who've never been through the

[37:34] whole process.

[37:35] >> This is one of 50 offices the Obama

[37:38] campaign has opened in Battleground,

[37:40] Virginia, compared to 20 for John

[37:42] McCain. The well financed operation

[37:45] includes an internet component relied on

[37:47] by the campaign.

[37:49] >> This is uh not only a place for people

[37:50] to share ideas, but it becomes an

[37:52] organizing tool. Such advantages have

[37:54] helped Obama build a 20 percentage point

[37:56] polling lead over McCain among 18 to 29

[38:00] year olds in Virginia and nationwide.

[38:03] Spokesman Brent Coburn says the campaign

[38:05] has gained experience at guiding new

[38:08] voters of any age.

[38:09] >> It's been a long primary season uh for

[38:11] the Democrats leading up to this general

[38:12] election. And one of the things that

[38:14] that afforded us was a chance to look at

[38:16] how we did do with newer voters, how we

[38:18] did do with students. And we've been

[38:19] through this process of registering and

[38:20] mobilizing before. What we've seen is

[38:22] that this energy really does translate

[38:24] into votes.

[38:25] >> The the main audience for this blog is

[38:27] undecided people who are not sure or

[38:30] basically even shoring up the base.

[38:33] >> Back on the campus at George Mason

[38:35] University, Josh St. Louis, head of the

[38:37] college Republicans said his group is

[38:40] less interested in bringing in new young

[38:42] voters. We made the decision not to

[38:44] register people because um frankly we

[38:47] thought our resources and our manpower

[38:49] would be better utilized elsewhere

[38:51] mainly off campus. Um and it's true it's

[38:54] very impressive they are registering. Um

[38:56] I'm still a little little skeptical to

[38:58] see if they're if they will turn out.

[39:01] >> The Republican party in Virginia

[39:03] typically maintains high levels of

[39:05] registration throughout the year and the

[39:07] party has a long-standing reputation for

[39:10] successfully turning them out on

[39:11] election day.

[39:13] Still, St. Louis admits Obama's lead in

[39:16] the polls may keep some young

[39:17] Republicans away.

[39:19] >> I know a few people personally who

[39:20] aren't voting this year because they

[39:22] feel it's such an uphill battle. I'm

[39:24] working every day to try to convince

[39:25] them elsewise.

[39:26] >> The McCain campaign's national

[39:28] headquarters is located in Virginia, and

[39:30] here the outlook is more upbeat. Like

[39:33] the Democrats, the campaign is banking

[39:35] on the internet to reach young voters.

[39:38] And Mike Ginsburgg of the Young

[39:40] Republican Federation says web- based

[39:42] efforts finally may yield rewards this

[39:45] year.

[39:45] >> In the past, it it has been perhaps more

[39:48] hype than than actually pans out on

[39:50] election day, but with new technology

[39:52] and new ways of communicating. Uh that

[39:55] may change this year. It's hard to say,

[39:56] but certainly we are doing what we can

[39:58] to make sure that we use those new

[40:00] technologies to get folks, make sure

[40:02] they get to the polls, make sure that

[40:04] they're active, and that they not only

[40:06] get engaged, but that they stay engaged

[40:08] throughout the process uh and ultimately

[40:10] show up on election day.

[40:11] >> But perhaps even more than their votes,

[40:14] the greatest value of young adults to

[40:16] both presidential campaigns may be their

[40:18] sweat.

[40:19] >> I think they're important for uh

[40:21] campaigning purposes. um going door

[40:23] todoor trying to get support. Um I think

[40:26] it's important that everyone should

[40:28] vote. So that's how young people are

[40:29] important. But um as for the overall

[40:32] turnout, um historically things don't

[40:35] tend to change overnight. They're very

[40:36] important because they obviously can

[40:38] provide a lot of foot soldiers. They can

[40:40] sometimes work during the day between

[40:41] classes when some of us are at work

[40:43] doing, you know, our regular jobs. Um,

[40:45] so absolutely. I mean, they're very

[40:47] important and and the campaign is doing

[40:49] a very serious effort to try to to bring

[40:52] them in, make them part of the campaign.

[40:54] >> Virginia is a big uh swing state and um

[40:56] this is the first time in over 40 years

[40:58] where uh Virginia actually has a chance

[41:00] of going blue.

[41:01] >> Yeah. Rain or shine every day as long as

[41:03] there's no hurricane. The national group

[41:06] Rock the Vote says it expects young

[41:08] voter turnout to rise this year as it

[41:11] has the last two presidential cycles,

[41:13] but still hover around 50%.

[41:17] On our website, you can ask NewsHour

[41:19] regulars Amy Walter and Stu Rothenberg

[41:22] your questions on the final push to

[41:24] November 4th. As always, just go to

[41:26] pbs.org and then scroll down to NewsHour

[41:30] Reports.

[41:37] And finally [music] tonight, some

[41:39] depression lessons. This week marks the

[41:42] 79th anniversary of the stock market

[41:44] crash of 1929.

[41:46] Our economics correspondent Paul Salmon

[41:48] had a conversation about that recently

[41:52] at the Museum of American Finance on

[41:54] Wall Street. We sat down with Eugene

[41:57] White and author AMD Schllays for a

[41:59] historical look at the Great Depression.

[42:02] He's an economist who generally admires

[42:04] FDR's handling of the crisis. She's the

[42:07] author of the forgotten man. Critical of

[42:10] 1930s government intervention.

[42:12] >> Eugene White, AMD Schlay's welcome.

[42:15] 1933, President Roosevelt is about to

[42:18] take office. Depth of the Great

[42:20] Depression. Where do we seem to be with

[42:24] respect to that moment in history? Well,

[42:27] if we compare the circumstances around

[42:29] it, it looks very scary because there

[42:31] are a lot of similarities. What uh those

[42:34] include a fallen asset markets, a

[42:36] collapse of uh the real of the stock

[42:39] market, of real estate markets, and a

[42:41] credit crunch with a lot of banks going

[42:43] under. If we say what's it going to look

[42:45] like when the new president takes office

[42:47] compared to when Roosevelt assumes

[42:48] office, I think the circumstances are

[42:50] very different. In 1933, there had been

[42:53] a great hesitancy in ter from policy

[42:55] makers from both the Fed and the

[42:58] Treasury to do much about it. And that

[43:00] was one of the things which had caused

[43:02] the uh depression to accelerate

[43:04] downwards. The difference is today we've

[43:07] seen a lot of quick action uh by both

[43:09] the Fed and the Treasury to address a

[43:11] lot of these issues. So a lot of things

[43:13] which took a long time to happen

[43:15] afterwards which were delayed in the

[43:17] 1930s have already taken place. An

[43:19] easing particularly of Fed and an

[43:21] increase of uh deficit spending. So

[43:24] Roosevelt takes over

[43:27] and what does he do and how does he sort

[43:30] of get the country back on the upswing

[43:33] >> when he comes in? He does a lot of good

[43:35] things. One is to establish deposit

[43:37] insurance. We talk about that today.

[43:39] Another is to sort out the banks with

[43:41] the bank holiday. We see people doing

[43:43] that now. Very quickly he did it and it

[43:45] was a rather bipartisan affair. The men

[43:48] said you couldn't tell which party the

[43:50] people were except for you knew what

[43:52] side of the treasury desk they were

[43:53] sitting on when they sorted out the

[43:55] banks. Uh so began to create the SEC,

[43:59] the Securities and Exchange Commission.

[44:00] That gave clarity to markets. And

[44:02] finally, of course, Roosevelt reassured

[44:05] through the radio. The only thing we

[44:07] have to fear is fear itself from the

[44:09] inaugural and then subsequently as well.

[44:11] >> I would add one thing uh to that list of

[44:14] uh suggestions which were very important

[44:15] for confidence building. One of those is

[44:17] that at the time the US was on the gold

[44:19] standard and that meant that the US

[44:21] promised to exchange uh $20 and.35 for 1

[44:27] ounce of gold. The problem was the US

[44:29] was running out of gold very quickly.

[44:31] And what Roosevelt did was essentially

[44:33] allow the dollar to fall in value and to

[44:37] uh revalue gold ultimately at $35 an

[44:40] ounce. That had a tremendous impact

[44:43] because all of a sudden all the gold in

[44:45] Fort Knox and the Treasury rose in

[44:47] value. The Treasury was richer. So the

[44:50] Treasury created these gold

[44:52] certificates. It deposited with the Fed

[44:54] and spent. And so it acted as enormous

[44:57] stimulus to the economy. One of the

[44:59] things though I describe in the

[45:00] forgotten man is Roosevelt was

[45:03] experimenting. They didn't really

[45:04] understand the gold standard then even

[45:06] as well as it was just described. So he

[45:08] said, "Okay, I'm going to add money to

[45:10] the economy. I'm going to I'm going to

[45:12] inflate somehow. I'll set the gold price

[45:14] every morning at breakfast after I have

[45:16] my egg and my cigarette." With Mr.

[45:18] Morgan thou in attendance because he

[45:20] always says yes.

[45:21] >> He's the Treasury Secretary.

[45:22] >> He was to become the Treasury Secretary

[45:24] and he did set it every day trying in in

[45:26] sort of experimental way. let's let's

[45:28] drive prices up. Let's help farmers. And

[45:31] he would be quite arbitrary. He'd say,

[45:33] "Let it go up 21 cents." And Morgan th

[45:36] would say, "Why, Mr. President?" He'd

[45:38] say, "Because it's seven times three."

[45:40] And three is a lucky number. And Morgan

[45:43] later wrote, "If anyone knew how we did

[45:44] this, they would be frightened." And

[45:46] they were. You do see the stock market,

[45:48] for example, leveling off, staying at

[45:50] about a 100 from a big rally in the

[45:52] spring the rest of the year. There was

[45:54] an arbitrary aspect to the New Deal that

[45:56] was deeply destructive. And that's an

[45:58] important point to make as well. Those

[46:00] New Yorker cartoons of people waiting it

[46:02] out in their living room crying into

[46:03] their martini were accurate. Capital

[46:06] waited for the experiment to end.

[46:08] >> The economics

[46:11] profession says that theoretically and

[46:13] certainly said in those days, no. Hey,

[46:16] prices will come down, wages will come

[46:19] down, markets will clear. that is people

[46:21] will start buying stuff at a lower price

[46:24] and the situation will reverse itself.

[46:27] But that didn't happen. The problem was

[46:30] that here there was much larger

[46:31] deflation and there were some very bad

[46:33] imbalances in the economy and deflation

[46:36] played into those so that uh there was

[46:39] people were largely in debt. There were

[46:40] a lot of indebtedness much higher than

[46:42] at previous levels. So that fall in

[46:44] prices was much more severe. Why would

[46:46] the fall in prices be difficult if you

[46:48] were

[46:49] >> because if you uh have a loan

[46:52] >> uh and what and you have to pay that

[46:54] back $100,

[46:55] >> right?

[46:55] >> If the price level falls, that increases

[46:58] the real value of that loan you have to

[46:59] pay back

[47:00] >> and that makes it costly. Yes.

[47:02] >> Like with houses now. I mean, if I've

[47:04] got a mortgage and I'm paying and the

[47:06] price the value of the house is going

[47:07] down, then this becomes a greater

[47:09] burden. And it wasn't just the price of

[47:12] housing, it was the price of all goods.

[47:14] So that's going down. So anyone who had

[47:15] borrowed found the burden much higher

[47:17] and that created not only foreclosures

[47:19] but defaults in a very broad level

[47:21] creating much greater distress than

[47:23] you'd you'd had in previous occasions.

[47:25] >> I also see the deflation as problematic.

[47:27] Inflation is friendly to risktakers.

[47:29] America is a risk-taking economy. When

[47:32] you have an idea, you're young, you're

[47:33] trying something out, you're in debt.

[47:35] Those people were punished. And that

[47:36] sourness we live with today in our

[47:38] grandparents and great-grandparents.

[47:40] Anyone who was risky and fun, but maybe

[47:42] also an inventor, he lost out. The

[47:45] conservative people won out. The ones

[47:47] who saved and saved and didn't dare. So

[47:50] that's a cultural layover that we still

[47:51] have.

[47:52] >> Yeah. This always reminds me of the

[47:55] credit comes from the Latin crederee to

[47:57] believe. In your book, you have a quote

[47:59] from the British prime minister of the

[48:01] 19th century, Gladstone.

[48:03] Credit is suspicion asleep and that's

[48:07] that suspicion was very awake in this

[48:10] period is also very awake now.

[48:12] >> Now what lessons should we have learned

[48:17] from the great depression and have we

[48:21] learned them?

[48:22] >> What I discovered researching the period

[48:24] was that government intervention was

[48:25] usually problematic and made the

[48:27] depression worse in Hoover's era and

[48:30] also in FDR's era. So, we want to be a

[48:33] little wary now about always asking for

[48:35] one more rescue package. The uncertainty

[48:38] of the rescue packages and their timing

[48:40] can do damage itself.

[48:41] >> But, but you're not saying, or are you

[48:44] that government intervention

[48:47] in general actually

[48:50] was worse than if government had done

[48:52] nothing at all.

[48:53] >> Government should have done less.

[48:55] >> I would have to disagree with that

[48:56] interpretation. It's quite true that

[48:58] there were a lot of mistakes made during

[49:00] the Great Depression in terms of

[49:01] government policy, but those are

[49:03] primarily mistakes about intervening in

[49:05] specific markets, about fooling around

[49:07] with a pricing mechanism affecting

[49:08] prices and wages. Those were clear

[49:11] mistakes. But what we really learned

[49:13] about was how the Fed should act as a

[49:15] central bank, how it should act as a

[49:16] lender of last resort, and how to

[49:18] operate fiscal policy in a sensible way

[49:20] to counteract the effects of a of a

[49:23] stock market crash, to counteract the

[49:25] effects of a recession. Those are very

[49:26] very important lessons which are

[49:28] actually being used today and it's no

[49:30] surprise because I would say we're

[49:31] relatively lucky to have people at the

[49:33] Fed who have a thorough understanding of

[49:35] the Great Depression. Ay Schlays Eugene

[49:38] White thank you very much.

[49:43] [music]

[49:48] Again the major developments of this day

[49:50] the government reported economic

[49:52] activity fell in the third quarter. It

[49:54] was the clearest sign yet the country is

[49:56] moving into recession. Wall Street shook

[49:59] off the news and rallied on cuts in

[50:01] interest rates. The Dow Jones Industrial

[50:03] Average gained nearly 190 points. And in

[50:06] the presidential campaign, Republican

[50:08] John McCain criticized Democrat Barack

[50:11] Obama for backing tax breaks for oil

[50:13] companies. Obama said bad news about the

[50:15] economy would only continue under

[50:17] McCain.

[50:26] And [music] once again to our honor role

[50:28] of American service personnel killed in

[50:31] Iraq and Afghanistan. We add them as

[50:34] their deaths are made official and

[50:35] photographs become available. Here in

[50:38] silence are 13 more.

[51:54] We'll see you online and again here

[51:56] tomorrow evening with Mark Shields and

[51:58] David Brooks among others. I'm Jim Lara.

[52:01] Thank you and good night.

[52:09] Major funding for the NewsHour with Jim

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[52:14] oil, energy, the environment. Where are

[52:19] the answers? This isn't a liberal or

[52:22] conservative issue. It's a human issue.

[52:25] As an energy company, Chevron has a

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