determines their success in life. then we'll have a bunch of people sitting on a couch waiting for the next government check. >> that's new jersey's governor chris christie. he's endorsed governor mitt romney for president. who knows, the two could be running together against president obama in the fall if romney taps christie to be his vice presidential candidate. threats to hard work is hardly a new issue for president obama either. it was a central team in the kansas speech the president used to lay out his economic agenda at the end of last year. listen. >> for most americans the basic bargain that made this country great has eroded. long before the recession hit, hard work stopped paying off for too many people. fewer and fewer of the folks who contributed to the success of our economy actually benefited from that success. >> now, the president is referring to the wealthy when he talks about those precious few who are seeing the benefits of this economy. stephen moore an editorial writer for the "wall street journal." stephen, good to see you. i know you're not going to side with the president here. give me a sense of what specifically the government does that punishes success and discourages hard work from a conservative perspective. >> ali, let me start by sounding a note of optimism. which is, i think that chris christie and barack obama are wrong here. i think the great american dream is still alive in america. we saw a great story this week, one of my favorite stories in a long time, instagram. these two kids start a company out of their garage, two years later, they sell it for a billion dollars. it can happen here in america and it's a great story. look, this has been a tough recession obviously. we're seeing declines in real incomes, people pinched by high gas and food prices. but i do believe, we've lived through this before, ali. that's the point i want to make. we've lived through this in the 1930s, in the 1970s, people said the middle class is dead. i want to make that point of optimism, i think it's important. >> fair enough. what's the thing we say punishes success and doesn't reward hard work? what would conservatives like to see changed? >> you know, here the is the problem i have with the president's message. i think this idea of the buffett rule, tax the rich, the idea all we have to do is to get the middle class ahead is to soak the rich and sock it to the rich, that's just the wrong message of success. we need a tax system that tries to make poor people rich and not rich people poor. and i think sometimes the president misses that. that when we have vibrant employers, that when this is a country that if you get successful, the government doesn't take half of your money away from you. i don't think the american people share this kind of envy of the rich that the president and a lot of democrats do. >> hold on. chrystia freelander, from reuters. do you agree the economic system we have in the united states fails to reward hard work and punishes success? >> no, i don't. i agree with stephen about one thing. i think america is a tremendous center for innovation. and america actually is terrifically good at both sort of fostering that innovation and rewarding it. instagram is a great example of that. i think what is missing, ali. i don't think this is a fault of politicians, i think this is about the structure of the global economy. it's about the technology revolution, it's about globalization. the hard reality is those middle class jobs, the jobs for people who are not going to become billionaires in 12 months off an ipo, those jobs are vanishing. >> right. these are people with basic educations, the kind of education that 25 years ago would have guaranteed you a good job for life, that's becoming harder. >> and we can all see that in our daily lives. think about it, travel agents. we don't need them anymore because we have the internet. people don't have so many secretarial positions. we saw it recently in the retail sales employment numbers. sales are up but jobs are down. why is it? we're buying online. i think that that is a great trend. i believe in technology, all of us love it. >> what do you do with the people who don't have work? >> but we have to be realistic and honest about the fact that we all encounter in our daily lives that those good, solid jobs for someone who -- yes, chris christie does want to work really hard. they are not there. either you are a genius ipo person and you're doing fantastically well or you are struggling to get by at the bottom. i think that makes america and actually all of the western world right now in a really difficult place. because our democracies are built on a robust middle class. >> but you know what? can i make a point -- >> go ahead, stephen. >> i think the area where the president's just wrong, factically, is when he says over the last 20 or 30 years, that the middle class has not made gains. it's factually wrong. i was looking at the census data on this, ali. if you look at the middle class, 40th and 60th percentile, the people who make between $40,000 and $70,000 a year, in the last 30 years, in the '80s and '90s, under reagan and clinton, a democrat and a republican, there were big games for the middle class. there were a lot of jobs. we became a job creation factory around the world with 30 to 40 million new jobs. so the formula does work. i do think we've gotten off track in the last five years. what i'm saying i really think this economy is prepped for a big expansion that will benefit the middle class, but i don't think raising taxes on the wealthy is the way to do it. >> chrystia? >> i disagree. anybody in the middle class will tell you their lives are rough. what we have seen -- what particularly worries me is the job numbers. and what we have seen in the recovery from the past three recessions is the employment number resets at a lower level. we are seeing higher levels of structural joblessness in the economy. i don't think that this is forever, but i think it's lying to people to say that it's easy and that something hasn't changed. it has changed. as a society people need to respond to that. >> stephen, what would be the counter to the things you're criticizing the obama administration for either doing or suggesting? i think i know where you'd go with this. what would be the thing that does incentivize hard work, that does reward success, and that ultimately will create jobs for this very set of people that we are disagreeing about right now, the middle class? >> i think what we need is a lot more saving and investment in this country. i think there's been way too much orientation towards spend, spend, spend, and not growing the building blocks of a long-term, prosperous economy which is investment and saving. i do think it's a mistake to double or triple the capital gains tax, the money that's injected into the economy that creates these new businesses. and chrystia, look, i'm not saying that the middle class is not struggling right now, you're absolutely right. this has been a very difficult recession for middle class families. what i'm saying is with the right amount of skills and the amount of new companies developing -- we're seeing a huge renaissance in manufacturing right now, it's true. it's true that manufacturing doesn't employ as many people as it used to, but call me an optimist, but i think that we are prepped for a really big expansion that's going to benefit all income groups. but it can't be this kind of redistribution. we have to agree tgrow the econ the key word here is competitiveness. i wish everything that washington did wasiented towards how to make america number one. >> we're going to talk about those things, manufacturing, a key point you brought up. chrystia, stay where you are. the guru behind the republican or economic tax agenda. is paul ryan ready to sit down in a room with president obama and work out a deal? >> work with president mitt romney and work with a senate -- >> can you choose somebody who's in office right now? >> ryan is also rumored to be at the top of romney's vice presidential list. i asked him if he's ready to take up the job, next. 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[ whooping ] ♪ it was the best day ♪ it was the best day ♪ e best day ♪ we make a great pair. huh? progressive and the great outdoors! we make a great pair. right, totally. that's what i was thinking. all kinds of vehicles, all kinds of savings. multi-policy discounts from progressive. call or click today. paul ryan is the republican chairman of the house budget committee. he seems like the architect of the gop's economic agenda these days. if governor mitt romney has a short list of potential vice presidential running mates, ryan would likely be at the top. in an election that will likely be based on the economy, one could understand why romney would choose someone like ryan, but would ryan accept if he were asked? >> you have to give that serious consideration and thought. i haven't done that. i'm pretty busy doing my day job. >> people have been talking about it. >> it's not my decision to make, it's somebody's decision to offer it. it's a good deal of time from now. if somebody says consider it, i would. until they don't, i don't see the point of spending a lot of time thib it. >> you're open to it. >> i don't know. my wife and i would have to set down and think it through and i haven't done any of that. >> could you and the president sit in a room like this or a starbucks or a room we provide and hammer out a budget? notwithstanding all the outside -- >> i would love to try. i would love to try. the president has given us four budgets and he has never once attempted to do that. i mean, usually you have to get an invitation from the white house to do such a thing. i've always wanted to do that. i've always wanted to try. when i first put budgets out, maybe i was naive, i thought, if i put this budget out, others will put their budgets on the table and we'll start debates these and get to a consensus. but nobody followed suit. the senate hasn't passed a budget in over a thousand days. they wait for republicans to offer their solutions and simply attack for election purposes. so i just don't see that kind of leadership from this president. if we were going to get this it by now. kind of leadership from this >> ultimately, you have to deal with that before now. president, we would have gotten >> i don't think that's right. i don't think the president -- if the president wanted to have a budget agreement, he would have given us a budget that attempts to solve the problem and harry reid would be passing budgets. harry releiharry reid has decid- >> who would you most like to -- if we said, we'll put you in a room, who would you most likely to work request? >> i would like to work with president mitt romney and the senate that's chosen -- >> can you choose somebody that's in office right now and someone on the democratic side? >> to me, it's not about the people or the party, but it's about the ideas, and what are the best ideas to save and strengthen these problems, medicare and things like that? >> so when a smart guy like paul ryan can't or won't name a single democrat that he would like to get in a room with right now and hash out a budget deal, it really gives you a sense of how toxic the tone is in washington right now. stephen moore and chrystia freeland are back. stephen, i have to say, and i have a lot of respect for paul ryan, i was disappointed. on this show, we love to go beyond politics, but no matter what i asked, i could not get beyond it with paul ryan. i could not get him to reach across the aisle and show me where there was room for compromise, because that is what we need. forget right or left for a moment, as a country, it's a shame that the u.s. cannot accomplish anything big, because we're so divided. >> i agree with that. but i think you have to be fair here. and i think the press has not been enough on this story that paul ryan talked about. the fact is that the president did present a budget, as you know, in february, ali. it was brought to a vote in the house and the senate. it got zero votes in the house and zero votes in the senate. even nancy pelosi wouldn't vote for that budget. in the meantime, in the senate, which is still run by the democrats, harry reid, it's true, as paul ryan just said in your interview, for three years, there's been no senate budget. soy ta so i talked to paul ryan a lot, i really admire the guy. he's got a fair point to say, lack, we've put our cards on the table. we told the american people what we want to do with medicare, medicaid, social security, the tax code, the democrats haven't done it. so when you asked paul ryan, are you willing to negotiate, negotiate with what? >> chrystia, everyone points to the debt creting showdown last summer and they whether or not how close they really came to achieving a grand bargain, but to stephens' point, what blame does president obama have for doing things like that, for presenting budgets and ideas that ennis are nonstarters and you've got paul ryan starting ideas that are nonstarters. what do we do about this? >> so i think, first, americans need to have an election. because i actually don't think that this is a technocratic issue at the moment. i don't think that if you just had a dwrup of smart economists in the room, they could come up with a solution that would suit everybody. i think that this is now a profoundly ideological question. you can have left-wing governments with big welfare states that have balanced budgets. let's talk about germany or sweden or even our own canada that have, you know, generous welfare states and have a very balanced fiscally disciplined ratio, and you have right-wing countries with much smaller states that also have balanced budgets. so balancing your budget isn't a left or right thing. and the left and the right have different approaches and really americans are going to have to decide. it's really simple. pay higher taxes and you can have more government support for the elderly, for children, for education, for infrastructure. if you don't want to pay taxes, you're not going to be able to have that. >> stephen, can we present that stark an argument to the voters and have them actually make that decision, so that come december or january, we can actually start getting deals done? >> yeah. i think so. i mean, krchrystia is right. she and i are agreeing way too much today. >> it's very weird. >> but this election, ali, is going to be a voter referendum on these very issues. i may not have put it quite the way chrystia did. look, i think the big government, more taxes model is the greece model that i think hasn't worked very well. and i think that the model, you know, of more for enterprise is sort of the hong kong model. but we can debate about this. but chrystia's actually right. this is for the voters to decide and whoever wins this election is obviously going to have an upper hand in terms of what direction we go in with this budget come january. >> the problem, of course, is that the options are never as clear as what chrystia described. it's not an all the way to the right or all the way to the left. the problem we may have in november, we may end up with a government that's as split as it is today. >> that's true. may be the worst of all outcomes. >> one thing that i think is an important point, ali, and that steve and i really do agree on, there's this sort of centrist fantasy that there's a pure mathematic technocratic solution. there isn't. it's not just about a toxic environment and people not being nice to each other. i think that america is genuinely, ideologically divided about the kind of country it wants to be. and i actually welcome this election campaign. i think it's great to have that open daebate. >> you two have gone all weird on me. chrystia freeland, always a pleasure to see you. stephen moore, always a pleasure to see you as well. coming up next, a solution for the housing market that could make underwater mortgages a thing of the past. we'll talk to one of the most brilliant economists who successfully predicted our rough past and we'll find out what he says is in store for our future. stay with us. people with a machine. what ? 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[ male announcer ] go online to reach every home, every address, every time with every door direct mail. ♪ [ camera clicks ] ♪ it's hard to resist the craveable nature of a nature valley sweet & salty nut bar. take a look at this. in 1987, this housing index was created. the case-shiller index. it was created to track changes in home prices in the top 20 metropolitan areas in the united states. it is still one of the leading economic indicators used by economists. in 2000, this book, "irrational exuberance" came out. it predicted a bubble in the stock market during the height of the dot-com boom. it turned out to be a prophesy. in 2005, an updated version was released, predicting another bubble, this time in the housing market. it too turned out to be a prophesy. skip ahead to 2012, this book is released, arguing that the economy will not advance with the creation of new financial products. sounds laughable. sounds like a tough sell, particularly to a public which still blames the financial sector and financial innovation for the crisis of 2008. is this book going to turn out to be a prophesy as well? let's turn to the man behind it, robert shiller, economics professors at yale university, the name behind the case-shiller index, the name been the s&p case-shiller pe ratios. this is your new book. i can't believe it. you're telling us that we should innovate more in terms of finance. >> i think that should be our response to occupy wall street. they want to fix something, right? >> right. >> okay. like if a car is broken, you bring in a mechanic. you've got to bring in people who study finance. they're looking kind of bad now, becau