more to the middle might have been able to get something through congress. once he started talking about a big tax increase on the rich, there's no way republicans were going to go for that. i think this has become a political debate not a debate about what we can pass right now. that's a problem when you have 14 million unemployed people. >> didn't the summer teach the white house there was going to be no consensus and trying to do a deal, trying actually to move to the center is what the white house tried to do over the debt ceiling isn't going to work. if you talk to people at the white house -- precisely for that reason you talk to people at the white house they say actually we really tried hard to do a deal and we think it's a huge mistake because the other side doesn't want to bargain and that's what the president is hearing. from his base. >> they did make a deal on the budget. >> not a meaningful deal that moves economic deal. >> economic warfare, tax the rich that's not a bipartisan consest senses. >> he's changed. to say that the reason he hasn't been able to pass his policies is because he hasn't sought consensus is just not accurately reflecting what he has done. >> there's nothing in that package that republicans really like. >> not now, but that's because he tried to reach consensus and there was nobody on the other side of the table. >> he got a big applause for making that point. that's something his supporters want to hear he's the one moving and they're not moving with him. want to talk about a component of that bill, the senate blocked a component of the jobs bill aimed at jobs for teachers and first responders. the president made it very clear that if republicans in congress don't pass his jobs proposals they'll have to answer to the public. >> it's these proposals. if they say no to steps we know will put people back to work right now, they aren't going to have to answer to me, they are going to have to answer to you. >> this is for chrystia, even if the president gets parts of his jobs bill through congress going forward he's facing record high levels of pessimism. according to a cnn/orc poll, 59% of americans think the president's policies will fail. is he better off running on his policies or gridlock in washington? >> i think he has to run on his policies but i think it is really, really tough. i think for him to run on gridlock, which is a little bit what we're seeing and also trying to blame the previous administration for the economic problems, i think that's going to be really difficult, because people are going to say you've been president now almost for a full term. >> he also -- >> you own the economy. >> he ran as a uniter, not a divider. >> what he's saying is uniting hasn't work. i haven't been able to do anything. but at a time when the economy is in such really, really dire straits, i think that's going to be a really, really tough sell. >> bring in ken, fed out, the beige book. we love the beige book. our economy is not in recession but losing steam, not doing anywhere near what we would like. are there pieces of the president's job plan that could help the situation or does it not matter because the politics have made it impossible? >> i don't think anything in it is a game changer but clearly something like extending the payroll tax cut might make sense. i do think -- stephen wrote a good piece how we really need to think about something different here, new tax policy, new way of approaching things. we are in for a long period of slow growth. it's not just about what's going to happen this year but what is our future, where is america going. that's what we really need to see at this point. >> the very near term do you think we've averted double dip recession. there have been little bright spots, so little not terrible spots. is how i'll put it. jobs number not as bad, philly fed index this week that showed more activity than people thought. have we averted a second recession or is it too minuscule? >> as you know, christine, i don't think we ever left the recession in a meaningful second. carmen and i call its second great contraction. is it going to get worse? i think the norm is we have slow growth for an extended period. there's more healing and deleveraging. i'm very worried about europe. that's hanging over our head. we're not very strong. our banks aren't very strong. that's the big risk. otherwise f they solve that, slow growth until there's a game changer. >> can i ask one question. >> you are the guru of financial crises and how historically economies have recovered from them or not. is this kind of economic winter just inevitable and should everyone have said at the beginning of 2009, okay, we've screwed things up. history shows it's going to be seven years before things get better? >> i'm afraid the answer mostly is yes. there are things you can do -- >> you've said that repeatedly. >> yeah. you certainly want to take aspirin when you have a fever. >> you don't want to do anything that makes it worse. >> you don't want to do anything worse. you want to understand this is going to last a long time, don't want to panic. you want to look forward and ask how do we get back on our feet, how do we have a good decade. there was an idea we could jump-start everything, big stimulus, government, private sector will take over organically, go away. that i don't think -- >> that's not going to work. >> i disagree, you and i have had this discussion. i think if we had done structural things that need to take place with respect to changing the economy in 2009, we'd be in much better shape now. the reason i'm kind of against this stimulus, too -- these are -- >> the president's jobs bill. >> putting a band-aid on a cancer patient. i think ken and i are in total agreement. the problems are much more structural than just these temporary infusions of government spending. >> i think -- but putting the band-aid on the cancer patient or maybe giving a treatment to the cancer patient, you've got a lot of people really suffering. maybe if you can give the argument from the white house, you've got to do something to alleviate suffering while we wait for the cure somewhere else. >> yeah. and i think there is a really important question about actual human beings and human lives. the thing i'm worried about the most in terms of the winter theory of what's going on is what happens to the generation that comes of age during winter. the research about young people who enter such dreadful jobs market never get a good first job. that's scary. i don't think you want a whole generation whose future prospects for 10, 20, 30 years can really be stunted. >> ought to be things like first of all, the housing. what do we do about housing. if you're going to run a deficit, do something dealing with that, thorny. education, what to do with 25% unemployment among teens. it's high among 20 to 25 years old. try to have something to bridge that, perhaps. the vision ought to be long-term not that we're somehow solving the short-term problem. >> let's talk about tax reform. that's not thorny or long-term. we're going to talk about that in a moment. thanks reform is a very big issue. it was all about herman cain's 9-9-9 plan. now rick perry is talking about a flat tax. would it be good for you? is this the time for major tax reform? is that something that could jump-start the economy? we'll take a look at that next on "your money." no idea. let me see that. that's a honus wagner autograph... the hall of famer? look at this ball! yeah, found that at a yard sale. i thought pickles would like it. 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>> many, many years ago i worked with steve forbes in 1996. >> oh, yeah. >> he was a little bit ahead of his time. >> i think he's advising rick perry. >> i do think the time might be right. you need one of those situations where the stars are finally in line to get this done. the flat tax puts all the lobbyists, all the tax accountants and all the special interests in washington out of business. it gets rid of deduction, postcard tax return, very popular with people and gets rates down low. maybe given the crisis we're in the time might be right, perry talking about next week coming out with some version. >> what do you think, flat tax, does it help the economy? >> i love the flat tax idea. steve forbes version was good. an earlier one jerry brown had. one stanford professor. it's a spectacular idea, can you imagine having the tax form be half a page, no bothering with accounting and lawyers and all the different things. i think it would be a great idea. it's a big change. some countries have done it. i think it's worked really well. we need a game changer, we need something that gives us growth. some of it you can't control. somebody will discover something, the next steve jobs. we hope that will done. -- come. what can washington do? this is something washington can do if they do it the right way. >> let me say one last thing. if we had the 18% rate or whatever it is, i think on a competitive basis around the world, it would make america a very competitive place. >> yeah. give us another -- >> jobs would come to the u.s. >> why doesn't the united states do this. >> returning to the conversation, steven and i were having at the beginning, i think tax reform and tax simplification, even if it's not as perfectly simple as a flat tax, i think that's an area where you could have some real bipartisan support. one of the things you're seeing on the left right now, the grassroots left is a sense that big business and vested interest has been successful in gaining what stephen was talking about. the tax code has been a way that gaming has happened. >> we found something we can agree on. >> i like it. >> that kind of simplication -- >> they can lobby -- >> one of the reasons you've got the warren buffett problem, because who takes advantage of all these loopholes, rich people. >> it's why you have the problem. >> here's simple and maybe it's why herman cain has been doing so well in the polls there's nothing more simple as three little numbers, 9-9-9. we know this week he modified 9-9-9 for people below the poverty line to 909, taking away that income tax, they would pay no taxes if they were below that income level. is this why it's resonating because it's simple? >> yes, i think simplicity is appealing. right now. i think what's also appealing is something the professor has been saying, which is, people know that this is winter, people get that. the historical research shows it, people see that in their lives. people i think really want something new. they want a new idea. they do feel there needs to be some game changing political transformation. i think this is appealing. i think with herman cain the difficulty is going to be as time goes on and people test, is there anything behind 9-9-9. the world is a complicated place. >> yeah. >> >> it's great -- i want to say 911, because that's what i want to dial with this economy. >> that could be your plan. >> rogoff's 911 plan. >> it's a muddled version of the flat tax. the flat tax is beautiful. this is not. it has a lot of problems. i give him a lot of credit for seeing the vision. let's make it simpler, do something people will understand. i don't think it's quite the right way to do it. >> i think it was senator tom coburn wouldn't it be nice to give a number for congress, the tax code will expire. march 31st. find something to put in its place. is now the moment to do that? we talked about real tax reform. is it really now the time to do it? >> now would be the best possible time. >> which means they won't. they will not. >> you don't know. i'd much rather we channeled all this anger with the tea party, with the occupy wall street, channel all this anger to something constructive. i'm worried if we don't we're going to get a game changer, a trade blocking regulation. something. >> we did this in 1986. that's the amazing thing. we had a total bipartisan consensus for cleaning out the tax system and lowering rates. that bill passed 97-3. >> it's not as radical as this. >> it was a big directional change. >> it depends on the white house. the president has said it's okay with me to be a one-term president if i can get big things done. so this is a moment when he could really roll the dice on this. another game changer i think is essential, which he tried to do is health care. >> well, he got -- >> if health care isn't fixed and i don't think this reform fixed it. >> he got things done his critics don't like, health care done, a big stimulus done. they said you've had your chance, mr. president and we still have 9.1% unemployment. that's it. >> obama care. >> oh geez. here we go again. another five-minute block. thanks so much. nice to see you guys. have a great weekend. occupy wall street. two guests, two different opinions. both witnessed the protests firsthand. one sides with the protesters, one doesn't. both sides next. we're century. a new kind of broadband company committed to improving lives with honest, personal service, 5-year price lock guarantees and consistently fast speeds. ♪ ♪ ♪ co-signed her credit card -- "buy books, not beer!" ♪ but the second that she shut the door ♪ ♪ girl started blowing up their credit score ♪ ♪ she bought a pizza party for her whole dorm floor ♪ ♪ hundred pounds of makeup at the makeup store ♪ ♪ and a ticket down to spring break in mexico ♪ ♪ but her folks didn't know 'cause her folks didn't go ♪ ♪ to free-credit-score-dot-com hard times for daddy and mom. ♪ offer applies with enrollment in freecreditscore.com™. so if i didn't know better i'd say you're having some sort of big tire sale. yes we are. yeah. how many tires does ford buy every year? 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(laughing) yeah. get $100 rebate when you buy four tires. 100 bucks! only at your ford dealer. 3 million tires. 11 major brands, fiona's kind-of-nice. i don't know why you're not here. 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. occupy wall street, lots of anger from the protesters, lots of questions from those observing the movement from outside. we're joined by two men who observed these protests firsthand. will cain, matt taibbi, contributing editor with rolling stone. matt, you say you love these protests, but you want to see the movement focus on a few things. what are they? >> first of all, i don't think it needs to focus yet. what it's doing right now is just getting bigger is an end in itself. they have been tremendously successful at that. everyone around the country is asking what do these people want so we can give them something and make them away. the longer they wait to announce specific demands the more people will be willing to give them. right now growing is an important goal. when it comes down to time for specifics, they should settle on one or two simple things. for me the big suggestion would be break up the banks. that's something that already had a lot of support in washington, a massive show of force could actually achieve that. >> break them up, make them smaller, make more of them. >> make it so there are too big to fail companies. if a company is too big to fail, it's too big to exist. we cannot have this unhealthy situation where goldman sachs, citibank and bank of america have implicit support of united states government it's not fair to the rest of the world, smaller regional banks, unhealthy situation and taxpayers should not be on the hook for those businesses. >> what did you see driving this? what did you see there? >> one thing i'm going to challenge matt on, i don't think people are asking occupy wall street protesters what they want so they will go away but so we can have a focused conversation and make it better. matt has written on "rolling stone" and i read matt's five potential demands, one is a suggestion to wall street, break up the banks. i would almost describe to every one of his pieces of advice, including break up the banks and defend each of matt's perspectives from a free market perspective. my conclusion is different. i don't like what i see. at occupy wall street. it's not what matt wants to demand. if you give them all five, nobody is packing up a sign and going home. >> that's one of the things. there are a lot of people who say i love the idea of occupy wall street the movement. the movement says don't take your liberal world view and put it on us. we're not a package for how you think the system should be changed. >> well, but i think they are right to not define themselves yet. what's happening, all these people are trying to speak for the movement and trying to coral them and put them in a box and find leaders they can negotiate with or identify as head of this movement by not having a specific set of demands or structure, it's got everybody guessing. >> what do they want, i guess? it's anxiety against the economy. everyone has got that. is it middle class uprising or a lot of people who felt like they haven't had a voice and bringing it together but what are they asking for? >> it's an uprising of everybody except a small group of people who -- yes. >> the 1%. >> exactly. almost everybody there is responding to the same thing, a sense of growing inequity not only in income but political power in this country. this idea there are 400,000 people here deported millions of people foreclosed on with the help of law enforcement and not a single person went to jail for the financial crisis. >> we've heard prominent democrats including president obama empathizing with the occupy wall street movement. listen. >> i think people are frustrated. the protesters are giving voice to a more broad-based frustration about how our financial system works. >> so democrats, do they deserve to have the protesters behind them with the ballot box? do you think this will become a political movement for the president? >> absolutely not. if you look at the history how we got into this mess, this financial crisis, the democrats have been worse than republicans. >> why? >> they have hands on repeals, the modernization act which deregulated derivatives market. >> lowering standards for home ownership. >> yeah. okay. >> that's actually a very contentious part. of the whole story. >> to me that's a peripheral. >> to the wall street part. >> right. look, their chief architects of the bailouts, you know, since 2008. they have their hands on everything. obama surrounded himself almost entirely with wall street people and they've