down 9 1/2%. so what happens next? and is your money safe? these are the questions for legal ber and ali velshi. i'll start with you with the usual entreaty. what is going on, ali? >> the french economy, actually no growth in the quarter. global economies are slowing down. we're dangerously close to a recession. we may need more intervention from the european bank and more from the fed. you've been talking about this piers, that rick perry said we can't have more intervention. if the fed intervened it would be treasonous. what's that setup? we have no political agreement in this country and add a few economic reports and i won't bore you with right now that came out again before markets opened this morning that added up into a big mix. people were running into the market, putting their money into gold, which hit another record, and savings bonds. >> this is pretty serious, isn't it? we've been talking about the possibility of having some kind of second recession. is this looking more likely now, do you think? >> it is. these things tend to be a self-fulfilling prophesy. i think ali had it exactly right. you know, for two years, we've tried a number of short-term stimulus measures to try to get our economy growing again. the markets have now figured out that those have not led to learn economic growth. so people are scared. when people are scared, they save more, they spend less, corporations invest less, they retrench and that can become a self-fulfilling prophesy. what's happening in washington is making a bad situation worse because it's hurting confidence, and that could tip us into recession. >> the morgan stanley report mentioned the policy errors in both the united states and europe led to the global downgrade. is this then a crisis caused by politics rather than straightforward economics? >> it absolutely is. that's the one kind of big difference from this crisis, if we're to call it a crisis yet. and back in 2008 when it was directly the result of, you know, the greedy bankers and all that. this past week or two of this volatility was really specifically due to the gridlock that was in washington, the inability to get to a debt deal once we did, it wasn't enough, and it was already too little, too late. s&p did it because we're unable to muster the political will to do so. and that's exactly what the morgan stanley report cited as the policy errors. so that's a big, big thing that's happening here. you also have to add on this, you can't underestimate enough how much the market is so skittish right now, it's august, our volume is low, and that means the market can swing wildly one way or the other with not too much movement. the market can go down if it's going to rain tomorrow, if there aren't enough sales of u.s. open tickets. it's that sensitive right now. and then pile on top of that, the cascading -- today we got several negative indicators coming one right after another. it all comes back to the political situation for the first time in quite some time. >> piers before you ask anything else, does this what you're looking at on your screen weird you out a little bit. those two guys in the bottom, right corner? >> you always weird me out, ali. i don't know how you have the energy. i wake up to you at 6:00 a.m. >> it's actually neil you're waking up to. >> you're always bursting with detail about these markets. and i don't know when you sleep. when do you sleep? >> after this. >> let me come to you because you're the personal finance expert of this stunning quartet, carmen, as ali observed. if you're an ordinary person in the street here, you're looking at wall street in meltdown fear, politicians acting through fear, you've got every reason to be pretty fearful yourself about your own financial status. what should people be doing right now? >> well, you shouldn't be afraid if you are sticking around for the long-term. you absolutely should not be. here's the thing. i don't want folks to be sitting on their hands or sitting on their fannies. i want you to look and see where you're at. and if you're comfortable with the volatility that's happening right now because you have a long-term outlook and you know what's happening today or the next couple of weeks or months is not going to affect your money in the long-term and that you're buying low, which is when you should be buying. there's a sale going on, then you're going to be okay. the danger here is if you let fear make you make a giant move like putting everything into cash. i have never seen americans and large corporations have so much in common right now in terms of hoarding cash, which is something that really can be damaging in the long-term because it's incredibly short-term thinking. retirement is a real, real issue and concern for folks. we're going to have a lot less security measures in terms of pensions are going to be gone and social security, what where he going to do? we have to be responsible and intelligent about what we do now instead of reacting on fear. >> your boss today said the following in a tweet. recession likely as markets recognize impotency of policymakers. that sounds cataclysmic. if the feds are running out of bullets, running out of ideas. sounds like not much money left to try to save this situation. >> well, what's left is hard, structural measures. so we've tried short-term stimulative measures, and the fed is one of those short-term sources of stimulus by lowering interest rates to try to boost the economy. so they tried quantitative easing last year. it led to a short-term boost, but then as it ended, the economy started to contract again. so the fed is doing whatever it can do. but what we need now are more controversial measures, long-term economic growth measures. that means reforming our entitlements, that means reforming our tax code, investing for growth. this is harder to do, they've done the easy stuff. this is the hard stuff. but right now, washington is completely dysfunctional, and washington is telling the market, you're on your own. we can't help you anymore. and that's why investors are scared. that's why the markets are reacting so violently every day. >> and ali, there's been a bit of a controversy today about the president going on a holiday, a vacation. i don't begrudge him his rest. he certainly needs it. he's working overtime for a long period. it seems an unusual time here where you have what appears to be meltdown in the global markets and most of washington having caused in many people's eyes this crisis have all disappeared off to the beach. >> yeah, it's interesting, although, because last week when the president came out and spoke about the economy, it had no particular effect or good effect on the economy. so there are two schools of thought here. that the president needs to come out with something and said in september he'll come out with a jobs plan. and there are a whole bunch of people saying why are we waiting for september? why is he going on vacation? we need an answer to this. the reality, though, piers, is i think at this point whatever the president decides to do has got to be very, very well thought out. he talked to wolf the other night and talked about trade deals here and there. on the margins, that kind of thing is generally good for the economy. at this point, we don't need something on the margins, we need something very big and very important. and neil just mentioned about the kind of entitlement reform and tax reform we need to get. it's absolutely true, but honestly, neil and i both have a better chance of growing an afro than congress coming together on tax reform any time soon. so i think we need a better solution than that. >> you're right on that one. >> you're right, ali, about this weird-looking screen. it's like beauty and the beast from where i'm sitting. and let me ask you -- i don't want to say who beauty and the beast is. i want to think to the average viewer it's pretty obvious. if you're the president and you're watching this, going on for weeks and months now. you're going to come back from vacation with the expectancy from the nation to do something pretty dramatic. what does he have? if the feds run out of bullets, what does the president have in his locker that he can do that is dramatic enough to stop this market mayhem? >> well, something about jobs. there's really no substitute for good, old-fashioned demand. and that's what this economy needs. you know, everything we've done so far, the fed's bullets, it's all been sort of artificial. getting people back to work creates revenue -- creates tax revenue, gets people off from unemployment. and it makes people invest in their businesses again. what we need is the kind of organic growth that makes people -- makes me want to start a business or makes companies want to buy ads in "fortune" magazine. and jobs is the easiest -- i don't want to say easiest, but that's the most logical way to start. also the one thing that has the biggest bang for your buck in terms of gathering the will of the american people and letting us think that there's a solution on the way. i mean, jobs is the biggest crisis, and it's the one that's not been fully addressed. >> but wouldn't that mean that the president actually would have to -- it would have to be another stimulus, right? >> there would have to be government spending. >> that is a fear that regular american folks are seeing. they saw what happened with the debt ceiling. they really don't think washington can agree on anything. so when the confidence is gone, that's why the money's being pulled out. >> let me ask neil and ali to round this off very quickly. do you predict, then, that there will be a new stimulus from the government to try and get this economy going again? neil, first to you? >> i think that we need to focus on spending. not all spending is created equal. we tried spending, that just created a short-term boost. if we invest in building jobs, long-term economic growth, i think we could see support if that's combined with a long-term program to reform our entitlements and our tax code. so it's possible, though not likely. >> unfortunately, neel's right. it's highly complex. and it's not certain that congress has the capacity to deal with, you know, chewing gum and walking at the same time, but it does have to be a combination of tax cuts that are very targeted, that cause businesses to do with lee said, hire people, along with some stimulus, government investment that will get work done on infrastructure, electrical grid, things like that. it does have to be a compromise and a combination and it has to together feel very big. again, we've got some proposals on this, it tends to come from the left because the right tends to have one answer to this, and that is cut taxes. we're not getting a whole lot of creative solutions. we're going to have to -- you know what you need to do, piers, treat it like the debt ceiling deadline. we need a jobs plan that feels like the debt ceiling deadline and maybe get some creative thinking on this. >> fear and panic don't help. it's time to keep our hair on, which will obviously only apply to three of the panelists. beauties, beasts, thank you very much. coming up, christine o'donnell's surprising departure from this show last night and the long tradition of politicians dodging the question. >> what is your opinion on repair tif therapy? 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[♪...] >> male announcer: now, for a limited time, your companion flies free, plus save up to 65%. call 1-800-sandals. conditions apply. last night, for the first time in my 25-year interviewing career, a guest just walked off. that guest was, of course, former u.s. senate candidate christine o'donnell. she objected to what i thought were perfectly reasonable questions and left the studio rather than having to answer them. here's that moment for those of you who missed it. >> why are you being so weird about this? >> i'm not being weird about this, piers. i'm not running for office, i'm not promoting an agenda, i'm promoting the policies i lay out in the book that are mostly fiscal, but mostly constitutional. that's why i agreed to come on your show, that's what i want to talk about. i'm not being weird, you're being a little rude. >> i think i've been rather charming and respectful. i'm just asking you questions based on your own public statements and now what you've written in your own book. it's hardly rude to ask you that, surely. >> don't you think as a host if i say this is what i want to talk about, that's what we should address? >> not really, no. you're a politician. >> okay. yeah. i'm being pulled away. we turned down another interview for this. >> where are you going? you're leaving? >> well, i was supposed to be speaking at the republican women's club at 6:00, and i chose to be a little late for that, not to be -- you know, not to endure a rude talk show host, but to talk to you about my book, to talk to the issues i address in my book. have you read the book? >> yes, but these issues are in your book. that's my point. you do talk about them. >> okay. all right. are we off? are we done? >> he's still there. >> i'm not. i'm still here. >> he says he still wants to talk to you. >> well -- >> it would appear the interview has just been ended. >> i did extend an invitation to christine o'donnell to come back on the show tonight. but she tweeted she had a very, very busy schedule today and unfortunately couldn't make it and i was a cheeky bugger. make of that what you will. joining me is the national correspondent for "the atlantic." what did you make of that? am i losing the plot here? or was i behaving in a perfectly responsible journalistic manner? >> i thought your questions were perfectly fine. i think the only explanation for why ms. o'donnell responded the way she did was she must have panicked. there's no good explanation for letting that become such an awkward moment since anybody who would experience in public life could find 20 ways to finesse the answer. it's very difficult to be under this public scrutiny. and when people are propelled up to a new level. we've seen it with rick perry, we saw it with sarah palin three years ago with her questions about the newspapers. it takes a little while to get one's sea legs. and i'm sure she'll answer the question differently tomorrow or the next day. >> what i found extraordinary was her statement today. she gave a few reasons for why she'd done this. and the main one seemed to be that i was obsessed with talking to her about sex. if you'd seen the clip i just played, no one was talking about sex. i was asking her about the ongoing quite burning political issue of the day about gay marriage given michele bauchmann's opposition to it. and i thought it was a perfectly reasonable thing to ask another tea party person. >> it seems perfectly reasonable to me. and i was particularly touched by your correct use of the bemuse. you saw some episodes of that earlier in the program too. even among professionals. because what politicians can usually do is say, well, my views on this are well known, i'm part of the conservative tradition, but what i'm really here to talk about is x, y, and z and get past the moment. >> you were jimmy carter's chief speech writer, so you would have been involved at the sharp end. what i was struck by was, this is somebody who has been through a whole midterm election campaign. and is quite used to these kinds of questions. and is also quite used to the mechanics of an interview. and yet still wanted to, i think, embarrass herself and make herself look a bit silly, which i found a bit weird, as i said, from a politician point of view. >> it must be that it's been now six plus months, longer than almost a year since she was under this kind of attention from the national media. and so she may be out of practice in that way. and a different kind of question than she was getting on the circuit. but again, the first time she has done this interview. and you know these questions will be asked by your successors in the interviewer's chair over the next weeks and we'll hear a different kind of response. she's not going to walk out of every interview from this one on. >> i should hope not. i want to bring in todd rogers, assistant professor on policy at harvard school. what did you make of it? >> well, i thought -- i thought it was fascinating that she managed to push back on you when you were asking these questions without making any effort to really try to dodge them. it was like she thought she had control over the interview for a lot of them. >> yeah. i'm struck by that. her statement. if i'm coming on a show like this, i decide what you talk to me about. well, that's not how this works, i'm afraid. i want to play you a clip, actually. we've got clips of various politicians dodging questions in i would say a smarter way. let's start with michele bauchmann. this was when she was asked about her husband's clinic. watch this and see how she reacted. >> what is your opinion on the therapy? and is it something that is conducted at that center? >> well, i'm running for the presidency of the united states. and i'm here today to talk about job creation and also the fact that we do have a business that deals with job creation. we're very proud of the business that we've created. >> i mean, todd, that was marvelous there. she completely rolled the question and said something completely different. >> right. so the research that i've been doing with my corroborator mike norton, we've done a series of these experiments where we have speakers offer answers to questions that are objectively different than the question they're asked. but feel similar. and what we found is that viewers watching this exchange often, most of the time, fail to realize that the speaker didn't answer the question and rate the speaker just as likable, honest, and trustworthy as if they had answered the question. but that's not true for all dodges. right? so you can dodge egregiously and viewers recognize it and they punish you for it. so i was thinking a lot about your question of when you were asking ms. o'donnell about gay marriage. you said what are your views on gay marriage, and it was clear she didn't want to answer that. right? >> james, i think the only conclusion you can draw when a politician who refuses to answer a straightforward question is they're worried that their honest answer is going to embarrass them. >> yes, and again, this was sort of a rookie error. if you'd had anybody with seasoning in national politics, they would have found a way to handle this. and dodging questions in the form of lying or refusing to engage is different which is to steer the discours