lost the ability to inspire confidence in the american people here? >> the entire country is show-me state. they have heard for some time from the very beginning before the stimulus plan, that the stimulus plan would keep unemployment under a certain amount, grow the economy this amount. they've heard a lot of things that didn't happen, whether it was because the economy was worse than anyone thought it was, whether it was because it was the wrong remedy or not enough remedy, whatever the reason is the american people are now skeptical that washington, including president obama, can do much to change things. i think that's what's reflected in the polls. everybody wants to see it before they believe it. >> in those same polls from cnn/orc say three in ten people feel they are better off today than they were ten years ago. we know congress has a lower approval rating than the president. these are one national polls. there's just one national election. if the economy doesn't improve, can the president win? >> yes, of course, anything can happen. that question, are you better off today than you were four years ago, i bet you hear again. famous ronald reagan question when he ran against jimmy carter, the right track/wrong track is extremely important and tends to mirror what's ahead when it comes to elections. let me tell you how the white house sees this happening. number one, i can give you many elections where we thought one thing would happen a year before and the exact opposite happened. george h.w. bush, first gulf war, a tremendous success. everybody thought, hey, he's in. he lost. when the marine barracks were blown up right near the election, we thought he's going to lose. boom, he won re-election. so things change. there is that. we don't see much changing in the economy even by the white house's own predictions. what they are looking at now is, can we sell, as ronald reagan did by the way, the trajectory of things. can we sell things are getting better. we know they're not where you want them, they're not where we want them, but we are on the right path and that's where they have to go. >> the president had a big fund-raiser this week, he said his chances of being re-elected in 2012, they are better than his chances of being elected in the first place. >> certainly, yeah. >> sort of telling his supporters, come on, you know. there was a long time nobody thought a guy like me could be elected in the first place. he's trying to inspire confidence that way. diane swonk, she joins us. diane, americans are just not motivated to spend right now. no increase in august retail sales, july retail sales were revised lower. how important is confidence here at this stage of the economy? >> there's no question on the margin confidence matters a lot. unfortunately we have a very marginal economy. it is important. remember, we saw retail sales flat line along with employment. we also saw wages decline in the month of august. consumers have a real reason not to be confident right now and to be more pulling back and be more cautious in their spending. so although confidence is very important, and i think certainty going forward for businesses, especially in hiring, trillion dollars in stimulus on the sidelines they are hoarding on their balance sheets, they need the confidence to have some kind of path going forward, even if it's hard. they just want some clarity. they can negotiate potholes in the road ahead as long as they are there. >> diane, is it the president's job to unlock that confidence? can he do that? does he have the key? >> nobody has the magic key. if they did, it would already be unlocked. certainly one aspect, if we could come up with a long-term deficit reduction plan with some stimulus to at least maintain the status quo and stop us from going under water, that would help businesses, consumers, some idea, some vision about where we're going, i think that could lift a little bit on the margins. frankly, like i said, when you're growing marginally that helps. >> greg, chief political strategist for potomac research group. the president laid out his plan, public hasn't given him a bounce in the polls, a potentially long battle with congress is already under way. when will it be fair to judge if these poliicies have actually worked? >> he's almost running out of time right now, i think, christine. you would have to make a counter argument listening to what you guys are saying. what if things get worse instead of better? what if the unemployment rate drifts higher? that could occur. you've got the solyndra scandal, solar company. i think the scandal could get worse. a big fight with the palestinians at the u.n. we've got most importantly, a situation in europe that hasn't come close to bottoming. so you add it all up, and yeah, things might get better for him, but there's a greater chance things could get worse. >> you bring up the solyndra scandal. this is where i want to bring candy in. something that's a half a billion loan guarantee through stimulus to a company in california that makes solar panels. the president had this unfortunate photo op where he talked about this as an example of how stimulus was creating money. this company is bankrupt, put out of business by chinese competition. taxpayers are on the hook. the white house revealing that $19 billion in unemployment checks wrongfully issued. these do not inspire confidence in the government spending more money. >> no. it's the drip, drip, drip that either one of them -- we don't really know what went on with the solar power company. we're not really sure. so far no one proved anything illegal went on. here is an administration that came in saying we'll be transparent. you're going to know all this stuff. we're going to be different. looks like the same old stuff. at the very least, this looks like the same kind of somebody gets a good deal and taxpayers feel like they always get the shaft. so it just adds to the general feeling of, you know, washington is the same old place and they never do anything. that is bad for anyone who is running for re-election, the president included. >> diana, "wall street journal" poll of economists found a one in three chance of slipping into another recession in the next year. that's the worst odds they have given since the recovery took hold. i mean, i guess on the other side of that, that's two and three chance we don't slip into a recession. clearly how does that affect confidence when we're hearing so many people are concerned about a new recession? >> given i'm in the poll and mine is a coin toss i'm a little higher than that of my colleagues in the economic concerns that greg laid out, europe europe europe. i think it's important. these are issues, we have to be honest. i always have hope. i'm an optimist. if you grow up in detroit and you manage to survive it, you've got a lot of optimism in the world. that's what i am, an optimist. that said we've got to find a lot more unity in europe and in the united states to solve our problems. our problems are not insurmountable. they are sur mountable. the clock is ticking. as greg knows, the unity in washington isn't there, europe as well. they need to get ahead of the curve rather than behind it. washington has the same disease. the imf made it clear christine lagarde out there pushing. let's face it, we're all in the same global economic boat. if we don't have our oars in the water at the same time we're going to be in trouble. >> want to talk about the president, you know, preventing, did he, economic disaster? did he make things worse? are things as bad as they seem? perception versus reality when it comes to this economy and this president next on "your money." whoa! hey! 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>> i think so, christine. the spectacle of geithner racing to poland, the spectacle of the u.s. fed putting dollars into european banks is quite unnerve. i would have to say in mentioning the fed, when you heard the rhetoric this week from boehner and the president, you get the feeling the gridlock is coming back in washington. the fed may be left to do the heavy lifting. of all the big stories next week, the biggest may be the fmoc. i wouldn't be shocked to see the fed unveil new policies. >> would that be treasonous. greg? i'm sorry. that was a cheap shot. what more could the fed do politically, a lot on the right questioning what the fed has done so far. how many more tools does it have in its toolbox? >> two things they could emphasize purchases of longer term securities driving rates down further. number two, this is very controversial, i think they will at least debate the idea of getting more liberal on their inflation target. >> diane, what do you think. >> i think i agree with greg, we could see "operation twist" named after -- originally done in 1961 after chubby checker's version of "the twist" is to get that twist in duration, the longer term thing. that's what we're seeing priced to market. the fed may disappoint in this meeting in september. i'm a little hesitant, although there's many people who want to go for it. dissenters are still allowed and may take until november to do it. i think they will do it, they will do "operation twist" as greg mentioned, buying longer term securities. in terms of large scale assets changing inflation target, i don't think that's on the horizon, just too risky for the hawks at the fed to stomach. i do think the fed is not done yet. they are feeling enormous burden central banks the world over of trying to carry a very fragile recovery in the developed economies. >> here's the interesting thing. the world we live, three of us on this panel live in, the fed and what the fed could be doing to operation twist and what central banks can do to keep dollar borrowing going in europe and the like. here in this country, people talk about what president obama, what he's doing, he alone, his handling of the economy. a lot of people say he's doing a better job of handling the economy than congressional republicans when you look at the polls. they hold president bush more responsible than president obama for the mess that we're in. in making a case for others that are to blame for the economy, has the president left the impression with voters no one is at the wheel in washington preventing the economic bus from going off the cliff? >> i think to the contrary and to his own detriment, the president said a while back, hey, if i don't begin to turn this economy around, bring this deficit down, if i don't do the following things, i'm going to be a one-term president. you're going to hear that a lot. i assure you, that's going to turn up in republican commercials. he laid out the things he needed to do about the economy and the country. in terms of the perception of it, i think when people look at washington, they look at the gang that can't shoot straight. while it's totally believe they don't believe -- republicans have a lower -- get lower approval rating than the president, it's apples and oranges. the president will be running against one person, that's a national poll. what matters to those congressmen is how people in the districts feel, why over 60% -- actually over 70% of the people get re-elected. their district tends to like them. it's not the same sort of looking at it. i think in the end when you look at how people view washington they view it as one big glob that can't move, not oh here's this guy and that guy. they're disgusted with washington in general. bad news if you're an incumbent. >> why so many are looking at the fed. see congress and the president shooting at each other and looking elsewhere where there's not fire coming out of the barrel of a gun. greg, 2.4 million jobs overall, the loss as president obama took office in 2009, it's a number -- lots of numbers like that you get reminds of from conservatives all the time that say this president is the reason the economy is doing what it is, not that the president is trying to mitigate a bad economy. is that what the president will be judged on next november? >> i think so. unless there's some great geopolitical wild card. diane and i talked about this, obama probably made things better. it could have been a lot worse. he stopped hemorrhaging, as diane says. most voters don't want to hear that. most look at policies and conclude they haven't worked. >> perception versus reality thing one more time. sometimes people say things in polls, a lot of negativity around them. we see this in consumer confidence. people say they feel terrible about this. look at spending numbers and they're fine. how much is perception, how much is reality. give me your real feel on what's happening in the economy for the middle income earner. >> i think in this case perception and reality are one in the same. we do see times when you see a major break between the two. a good instance is 9/11. we saw confidence actually shattered and the economy moved into recovery not long after that. thely. >> side as candy pointed out, the surge in confidence we saw in president bush and in consumer confidence after the initial iraq war, and then he didn't get re-elected, economy wasn't growing enough, the economy wasn't growing enough. in this case the economy is worse than it was, certainly during much of the last decade. it's not been a grade decade in general. what the recession revealed is the reality we were ignoring once the credit was stripped away, income equalities, loss in the middle class. it's easier to buy a car than a house, but unfortunately you have people living in those cars. that reality is hard to escape. rising ranks of poverty, particularly among children, rising ranks of people living in poverty, working poor. i think all of these issues are real issues. so perception and reality not that far apart at this stage. >> candy, you get the last word. >> let me point out in politics very often, perception is realty or is taken as realty, because to go back, when you look at the father george bush's first and only term, the economy had begun to turn around in the summer before the election. people didn't feel it. it didn't matter. no matter how many times. it wasn't enough. people said, i don't feel it. still feels like the economy is bad. perception does matter in politics, sometimes stronger than reality. >> candy crowley, diane, greg, nice to see all of you. have a wonderful weekend, folks. >> the president wants $447 billion to create jobs. republicans are hardly ready to sign that check. is this about policy or politics? we'll take a look flex. sle. not with priority mail flat rate boxes from the postal service. if it fits it ships anywhere in the country for a low flat rate. that is easy. best news i've heard all day! i'm soooo amped! i mean not amped. excited. well, sort of amped. really kind of in between. have you ever thought about decaf? do you think that would help? yeah. priority mail flat rate shipping starts at just $4.95, only from the postal service. a simpler way to ship. i tell you what i can spend. i do my best to make it work. i'm back on the road safely. and i saved you money on brakes. that's personal pricing. american jobs act passed on the hill. he'll need support from republicans in congress to get that done. that has the president questioning the intentions of some on the right. >> they supported this stuff in the past. but they are thinking maybe they don't do it this time because obama is promoting it. give me a win. this isn't about giving me a win. this isn't about giving democrats or republicans a win. it's about giving american people a win. >> will cain is a cnn contributor. if the economy turns around by 2012, it greatly enhances the president's chances for re-election. is it fair to say republicans would benefit from a congressional motto of just say no? >> i can't even play with that, because this needs to be called out. the president's jobs plan is simultaneously good and a farce. it's good because there's things in there like infrastructure investment to agree on. we need to be realistic about what kind of jobs that will create and how quickly. it's a farce, what drives it is keynesian economic that government spending boosts demand. he says we'll pay for it with tax increases which beats -- decreases his demand. he's betting his spending multiplier is higher than tax negative multiplierser. it's a farce. politically he knows this won't pass. there are places, room for compromise, corporate tax reform. there's room for that. he chose something he knows the gop will oppose. he did it so it would fail and he can paint them as bad guys. >> let's listen to what speaker of the house john boehner says. he says it's not politics that would cause him to hold up the american jobs act. it's policy. >> some of the president's proposals i think offer an opportunity for common ground. let's be honest with ourselves. the president's proposals are a poor substitute for the president obama growth policies that are needed to remove barriers to job creation in america. >> okay. roland martin is a contributor. if the republicans simply disagree with what amounts to $447 million in new stimulus, does president obama really have an economic record to prove republicans wrong here. >> how in the world can you continue to sit here and say oh, we've supported these things in the past. but now we don't necessarily like it. this makes no sense to me. this is the fundamental problem when you talk about how did you come to a conclusion. i crack up when will said, well, he put something forward that he knows will fail. the point is you put together your best proposal and then you duke it out. you can't even guess what they think on the opposite side. they thought they had a deal with speaker boehner and the debt ceiling and then the freshmen said no, we don't like it. this is the gop being ob sti nate and there are republicans on the record in the political piece where they said, we don't want to give him a win that is shameful rhetoric in this situation. >> hold on. i want to bring in ben white, politico's wall street correspon