Nation of mali get more mention this week in the debate than all of japan, mexico, or europe . First, my take. The International Monetary funds latest World Economic outlook makes for gloomy roading. Growth projections have been revised downward almost everywhere, especially in europe and the big emerging markets like china. Yet when looking out over the next four years, coincidentally the next president ial term, the imf projects that the United States will be the strongest of the worlds rich economies. U. S. Growth is forecast to average 3 , much stronger than that was germany or france, at 1. 2 , or even canada at 2. 3 . Increasingly the evidence suggests that the United States has come out of the financial crisis of 2008 in better shape than its peers because of the actions of its government. Perhaps the most important cause of americas relative health is the federal reserve. Ben bernanke understood the depths of the problem early and responded energetically and creatively. The clearest vindication of his actions has been that the European Central bank after charting an opposite course for three years with disastrous results, has now adopted policies similar to the feds, and thus avoided a potential lehmanlike clapgz in europe. The leading experts on financial crises argue that the United States is performing better than most countries in similar circumstances in history. Consumers are paying down debt, and Consumer Confidence is at its highest levels since september, 2007. Every american recovery since world war ii has been led by housing except this one. But finally, housing is back. Two weeks ago, jamie dimon, chief executive of jpmorgan chase, declared that housing had turned the corner and predicted that as a consequence, Economic Growth in 2013 would be so strong that the fed would have to raise interest rates. Corporate profits are at an alltime high as a percentage of Gross Domestic Product, and companies have 1. 7 trillion in cash on their Balance Sheets. American exports which have climbed 45 in the past four years, are at the highest level ever as a percent of gdp. The key to longterm recoveries from recessions is reform and restructuring, and u. S. Businesses have been quick to respond. Government intervention, believe it or not, has assisted this process with banks, with auto companies, and even in housing. Banks had to undergo stress tests and raise capital, the economist magazine which initially opposed the auto bailout reversed itself because of the manner in which General Motors and chrysler were forced by the government to cut costs and become competitive. Now all these good signs in the economy come with caveats. Europe continues to weaken. The fiscal cliff looms ominously. But compared with the rest of the industrialized world and with the arc of other postbubble recoveries, the United States is ready for a robust revival. This is partly because of the dynamism of the u. S. Economy but also because of the timely and intelligent actions of the fed and the obama administration. The next president will reap the rewards of work already done. So it would be the ultimate irony if having strongly criticized every measure that contributed to these positive trends mitt romney ends up presiding over what she would surely call the romney recovery. For more on this, go to cnn fareed for a link to my Washington Post column. And lets get started. Lets get straight to our terrific panel to talk about the economy and obviously a little politics, as well. Joe klein is times political economist. Amity shlaes is director for the 4 project at the george w. Bush institute and author of the forthcoming coolidge a biography of americas 30th president. Ken rogoff, whom i mentioned, is a professor of economics at harvard university, and amity shlaes is the author of Thompson Reuters digital and author of politocrats. Become back to both of you. Ken, the piece i mentioned, you and carmen rhine hahart wrote almost a political piece about how the u. S. Was doing. You said, look, compared with other big financial crises that meet the recessions, were doing pretty well. Fair . Yeah. Thats a fair characterization of what they said and what we said. I mean, its fair game to say we can do better. We will a plan where the economys going to grow better. But it youre going to evaluate what happened, was it a bad recovery, was it a good recovery, i think you have to compare it to deep financial crisis. This was not a plain vanilla recession. You have to compare it to deep financial crises weve had in this country which dont happen very often. And other countries around the world. And if you go by that metric, the United States has not done so badly. I mean, i think part of the argument is they say, well, were not growing that fast now. But the other side of the coin is we didnt fall that far at the beginning. I mean, what people are interested in this, we better off than we were four years ago. And not did we get a lot better in the last year, having sunk mightily. So i think that was sort of what the debate was about. Carmen rinehart nor i have been backing either of the advising but we felt since our work was being cited again and again and again, not just in opeds but in press briefings that we heard from, we thought we had to set the record straight. Fair to say were doing pretty well compared to other countries in similar positions . Well, were better than the worst s. That good enough . That would be the question. Whats interesting about what ken is saying is deep financial crisis, yes. It is part of a great pattern that he and carmen have analyzed and highlighted. However, our deep financial crisis, it sounds a little exonerating, doesnt it . Deep financial crisis. Nothing the average person could do about it. It has to do with political policy. For example, visavis housing. If our federal government hadnt guaranteed all housing everywhere both through fannie mae and freddie mac, the fha and so on, we would have had less of a crisis. The whole world believed in our housing. So i disagree just with the exonerating tone, this of the result of policy that voters supported that was erroneous. It wasnt negative but a lot of it happened earlier. Yeah, but no, no. It wasnt inevitable like weather. When you talk about financial cycles as ken says, oh, thats the weather, we cant do this was the result of policy by both parties. Sure, thats absolutely true. But its not it is policy by both parties. So republicans, of course, like to talk about the housing which democrats were very supportive of wrongly, i believe. But democrat like to talk about, and they should talk about bank regulation. You know, if you want to talk about regulatory failure, if you want to talk about government failure, surely the deregulation of the Financial Sector up to 2008 is one of the great failures. Let me ask you a question about the politics of this. Will voters really understand the ken rogoff argument, that this is a deep financial crisis causes overleveraged consumers and Balance Sheets get out of whack and it takes a while before this straightens out . Theyre looking and saying obamas been president for three years and hasnt fixed anything . I think thats right. But i think that they might understand it if it were bill clinton explaining it to them. I think that that obama really has been awful at explaining his policies and explaining the state of the economy for the last three or four years. Id like to say again policies do matter deeply. Example, for the viewer, next year its predicted well go into recession again if the fiscal cliff is not addressed. And we do go over it. These are decisions that have to be made by lawmakers before christmas time or the new year in regard to tax and sequester and spending. Its there in the books, and its probably accurate. I think we let ourselves off the hook when we compare ourselves to europe. Its not so great just to be less bad than the others which is where we are. I want to first talk about the fiscal cliff. Is it going to happen . No, its not. Ive been doing this for 43 years, and i suppose i should be a cynic by now, but im not. Im very optimistic that this is going to be handled because a good part of the blockage was the fact that Mitch Mcconnell set as his goal the fact that obama wouldnt be reelected. Now if boom geobama if obama gets reelected, that has past. And john boehner will have to think about his feature as speaker. If he wants to stand with the tea party or stand with the vast moderate majority of people in this country who believe that there have to be some revenues, and there have to be some cuts, and there have to be entitlement reforms. Theres a rational, sane middle road out there. If romney wins, then he will have to deal with the democrats in the senate which he will want to do, and he will have to say to his right wing as he has implicitly over the last three or four weeks that no, guys, were not going to have this extreme policy. And as for tax rates mattered, i mean, i think we all live through the Great Depression of the 1990s after bill clinton raised taxes. And the Great Depression of the 1980s after Ronald Reagan raised taxes, especially on business, three times. Were going to have to see stop no, were going to have stop, take a break. 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Like oil changes starting at 19. 95. My money. My choice. My meineke. Amity shlaes, ken rogoff, and chrystia freeland. Term two for whoever it is, term two for obama, term one for obama what do you think would get america growing at 3 or more . Well, let me pick up on what joe has said and tell you what is the truth that dare not speak its name on wall street right now. And behind actually i think a lot of the wall street support for romney. I think a lot of people on wall street are hoping and actually believe that if romney were elected, he would discover his inner dick cheney. And that the way thats a frightening thought. Right . No, no, the way the fiscal cliff would get resolve sudden that romney would say yes to tax cuts and would say actually deficits dont matter right now. Lets make growth a priority. And because it was a republican president that, therefore, you would have the Congress Much more willing to go along. Wall street at this moment would see that as a positive scenario, stimulus by stealth. What i worry about is that neither candidate if they win is going to get to execute their vision, that theyre going to be having like you marry someone but there are a lot of unruly relatives you never quite realized were there. Coming out of the woodwork. And i worry i actually think both men acquitted themselves quite well in the debates. But the point is, theyre in this larger environment, what is going to go on. I worry were going to see muddling through instead of clearcut tax reform, infrastructure program, clearcut ways to improve education. Joe, i remember a couple of years ago i do it every year. But a series of wonderful articles, before the midterm for time magazine. You talked over a lot of the midwest, middle class. And you found that the china came up ten times as often as afghanistan 20. 20 types as often as afghanistan. When you look at the what an average middleclass American Family is facing, particularly kind of people who work in factories, theyre up against probably a generation of this kind of wage competition and possibly wage deflation because of china, things. Do you what do you think happens to the politics of america if that middle class is not appreciably better five, six, eight years from now . Well, were heading toward, i think, a demographic period of real difficulty as the white majority declines. And theres and theres a fear of out in the middle of the country of this new america thats emerging that is so multicultural, multiethnic. But i do think once again, im going to be slightly optimistic here because, you know, you and i have written about this. Were finally beginning to understand what hasnt worked in education. The idea that college is appropriate for everyone hasnt worked. There is a Major Movement on in the country to match people skills with the jobs that are out there. Vocational educations making a big comeback. And i think that even as manufacturing jobs begin to return because our energy costs are going to be lower and labor costs are rising in asia, i think that those are going to be skilled manufacturing jobs. And were on the brink now where we can figure were beginning to figure out how to rejigger our education to meet the economy of the future. Im sadly going to be a little more pessimistsic than you, joe. And i think, fareed, you have asked the most important question. I am less worry good structural unemployment, wibut i am worrie about economic lousy jobs. Theres a paper about the lousy and economic jobs. I think were entering the period of structural lousy jobs. They can be manufacturing jobs, but theyre not paying the same that they paid forget the 1950s, theyre not paying what they were paying 10 or 15 years ago. I think we are entering a period, precisely as you say, because of this Global Labor Market where this is going to be a big chunk of the middle class that are the working poor. Theyre going to have jobs, jobs that we consider to be good jobs. They will have had the vocational training, but they will not be making enough money to feel good, to feel comfortable. And what that does to the politics, i think you already see. I think it makes the politics much nastier, much more devicer. Theres much less room for compromise. I think its a frightening prospects. Amity, no matter whos elected, at some point well have to deal entitlement spending. Do you think there is the political will on either side to actually cut spending . Particularly enticementtlements i do. If we sat here over one afternoon, we could come up with a Social Security compromise that reflected the impulses of all political parties. Sometimes i think we blow up especially says. We make it seem harder than it is. Its not that hard so the so its economically easy but politically right. So its our job to convey to the viewer that its economically easy to fix saturday. And if a politician tells you otherwise, from either side, that it must all be privatized or cannot be touched because its a democratic holy cow, theyre exaggerating. So one is to view that as not insurmountable, the health care is much more complex. But i want to mention that we all were talking in this narrow bed, about michigan notwithstanding or because of auto bailout is what, over 7 , more like anyone. The midwest in the future there. Just to widen our band, id like to offer what would happen, dr. Rogoff, ken, whom i admire so much, if we cut the captain gains tax to 2 Capital Gains tax to 2 in the United States, would we fall off a cliff of kept deficit or would we fall off the fiscal cliff as you described . I think the answer is if we had a tax simplification where that was taken off the table is the best idea, its outrageous that a lot of things get disguised as Capital Gains that are really income creating the biggest inequal you say raise Capital Gains for example hedge funds . If we didnt change anything else, absolutely. That is criminal. One point of agreement. Joe klein, ken rogoff, amity shlaes, chrystia freeland, thanks for joining us. Up next, what in the world. Why a littleknown nation, mali, is more importance than europe, mexico, and india combined. At least according to this weeks president ial debate. Ill explain. [ male announcer ] feeling like a shadow of your former self . Cmon, michael get in the game [ male announcer ] dont have the hops for hoops with your buddies . Lost your appetite for romance . And your mood is on its way down. You might not just be getting older. You might have a treatable condition called low testosterone or low t. Millions of men, fortyfive or older, may have low t. So talk to your doctor about low t. Hey, michael [ male announcer ] and step out of the shadows. Hi how are you . [ male announcer ] learn more at isitlowt. Com. [ laughs ] hey now for our what in the world segment. In the final president