PBS NewsHour - Making Sen$e

Yale University professor Robert Shiller was one of three Americans honored with the Nobel Prize for Economics for research on how financial markets work and how assets, like stocks, are priced. Economics correspondent Paul Solman sits down with Shiller to discuss the award, irrational exuberance and the global housing market.

The November jobs report boasted positive momentum, including gains in manufacturing and construction sectors. But economics correspondent Paul Solman reports that a high level of long-term unemployment continues to be a stubborn sour note for the American economy, with a political fight looming over unemployment benefits.

At the New York Stock Exchange, the Dow ended above 16,000, another record high. Meanwhile, companies continue to report healthy profits. And yet the recovery is weak and unemployment is high. Economics correspondent Paul Solman looks for answers and asks whether the Federal Reserve's stimulus has had the impact it intended.

With an outcome of near universal health coverage for residents of the Bay State, the 2006 reform of Massachusetts' health care system has also come with higher prices. Paul Solman reports on the state's effort to slow rising costs by looking for ways to cut spending on care that doesn't add value or improve health.

SeaTac, Wash., is aptly named after the airport located there. The Seattle-Tacoma International Airport is the city's largest employer and could soon be boosting their minimum wage for employees to $15 per hour. Paul Solman reports on the debate surrounding the nation's latest living wage initiative, SeaTac's Proposition 1.

Some Hurricane Sandy survivors have begun to study up on "doomsday prepping" in case another environmental disaster hits. City slickers by day, survivalists in the NYC Preppers Network head up to the Catskill Mountains on the weekends, armed with just the basics to practice living off the land. Paul Solman reports.

[Watch Video] Our final outtake from our Aug. 2 interview with SIGTARP Neil Barofsky: Special Inspector General for the Troubled Asset Relief Program. (Note that the full title runs 59 letters, which the acronym pares down to a mere seven.) Our previous installments have featured a near death experience with Colombian drug lords, his thoroughly disillusioning experiences in Washington and his analysis of what when wrong with TARP — from the very outset. Congressman Barney Frank, D-Mass., provided us a written response to why he thinks Barofsky has misunderstood the Dodd-Frank Wall Street Reform and Consumer Protection Act. Barney Frank: Mr. Barofsky asserts that the financial reform bill “purported to end Too Big To Fail banks… but it didn’t.” People should know that he simply asserts this without in any way backing up that claim with analysis of the legislation. In fact, the financial reform law very explicitly ends Too Big to Fail in several ways. First, it abolishes the section of the law which allows the Federal Reserve to lend money to any institution in America when it thinks it is necessary, as it did with regard to AIG. Secondly, the financial reform law explicitly states that if any financial institution — no matter its size — cannot pay its debts, it must be dissolved before any intervention by the federal government is permitted. The shareholders must be wiped out; the board of directors dissolved; the executives dismissed — the entity disappears. The Treasury Secretary is given authority to expend funds in the course of dissolving that institution in a way that minimizes damage to the economy, but is mandated to recover any money spent in that effort by an assessment on financial institutions with assets of more than $50 billion. Mr. Barofsky apparently assumes that a Treasury Secretary or the Board of Governors of the Federal Reserve would blatantly violate federal law. Paul Solman interviewed Congressman Frank in the summer of 2011 about allegations made by Gretchen Morgenson and Josh Rosner’s in their book “Reckless Endangerment” that Washington played a major role in the housing crisis. Third, Mr. Barofsky asserts that very large financial institutions get a benefit from being designated as subject to special scrutiny and regulation, including higher capital requirements under the new law. If it were the case that being so designated confers a financial advantage on these institutions, they would be seeking that designation. In fact, completely contrary to Mr. Barofsky’s unfortunately shallow analysis, no institution has sought to be included in this category and a number of them have been lobbying hard against being in it. Fortunately, their lobbying is proving unsuccessful. Fourth, Mr. Barofsky cites Paul Volcker as an advocate for his position. To the contrary, once I and others joined former Federal Reserve Chairman Volcker in making the Volcker Rule part of the bill, Mr. Volcker was a supporter of the legislation. I am confident that a very strong version of the rule will be adopted by the regulators. Finally, reducing the size of the banks would have done nothing to diminish the major causes of the financial crisis. Institutions were able to securitize and resell 100 percent of the mortgages they owned, encouraging very imprudent lending. Trading derivatives of these securities was unregulated. Our legislation deals firmly with both these issues. This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Neil Barofsky Lauds Barney, Blasts Dodd-Frank appeared first on PBS NewsHour.

[Watch Video] On Making Sen$e this week we’ve been featuring outtakes from my interview with top TARP cop Neil Barofsky, appointed by President Bush and retained by President Obama to prevent fraud in the $700 billion Troubled Asset Relief Program. From the start, Barofsky has been acidly critical of the government’s handling of bailout money. His chief complaint: that the banks were bailed out, not the victims of predatory lending. In this excerpt, Barofsky explains why he thinks it was a conscious decision. For a response on how the TARP funds were handled we reached out to Treasury Secretary Timothy Geithner, but his office refused comment. Instead, you can see his exchange with fellow PBSer Charlie Rose on Barofsky’s book, ‘Bailout’, here in “An Hour with Timothy Geithner.” In the last installment of our week with Barofsky we’ll ask him why, if he was so impressed with Massachusetts Democrat Barney Frank as a legislator, he’s so unimpressed with the legislation known as Dodd-Frank. And the oft-combative Congressman will then explain noncombatively why Barofsky has misunderstood the Wall Street Reform and Consumer Protection Act. This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Neil Barofsky on ‘Foaming the Landing’ for Banks appeared first on PBS NewsHour.

[Watch Video] Wednesday we present the second installment of outtakes from my encounters with Neil Barofsky, Special Inspector General for the $700 billion Troubled Asset Relief Program, known in Washington, D.C. as the SIGTARP. (I’m not making this up.) Appointed by President George W. Bush and retained by President Obama, Barofsky became increasingly critical of the government’s handling of bailout money. His chief complaint: that the banks were bailed out, not the victims of predatory lending. The original interview aired on Thursday, Aug. 2. Tuesday we featured the first outtake, on Barofsky’s previous experiences prosecuting Colombian drug lords and American housing scam artists. Today, he tells the story with which he led his new tell-all book, “Bailout“: his meeting with President Obama’s TARP czar, former head of Merrill Lynch and investment firm TIAA-CREF, Herb Allison. Mr. Allison’s only comment, when we contacted him, was: “I’ll trust the NewsHour’s viewers to interpret Neil Barofsky’s comments.” This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Neil Barofsky on the Corrupting ‘Elixir of Power’ appeared first on PBS NewsHour.

[Watch Video] On Making Sen$e lately we’ve been featuring outtakes from my encounters with especially intriguing interviewees. The most recent was Neil Barofsky, appointed by President Bush and retained by President Obama to prevent fraud in the $700 billion Troubled Asset Relief Program (TARP). From the start, Barofsky has been acidly critical of the government’s handling of the bailout money. His chief complaint: that the banks were bailed out, not the victims of predatory lending. The NewsHour aired the basic interview last Thursday, Aug. 2. This week, we present excerpts we wish we’d had time to run, including this first one — on why Barofsky took a job he didn’t want, his brush with death in his previous job (pursuing drug lords in Colombia), and what he learned prosecuting mortgage fraud before the crisis hit. This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post TARP Top Cop Neil Barofsky on Drug Lords and Mortgage Fraud appeared first on PBS NewsHour.

[Watch Video] Stand-up economist Yoram Bauman spent five months in China recently, studying climate change at a university and sending occasional video dispatches to us at Making Sen$e. I myself spent some time in China in 2005, reporting on the country’s growing economy, among other things, and trying to capture images through the smog. So I was particularly interested to hear his thoughts on how China (and the rest of us) are playing a role in increased carbon emissions, presumably making the world a hotter place to live. In short, he’s not optimistic. “China passed the U.S. as the largest CO2 emitter in 2007 and their emissions still continue to grow rapidly,” Bauman told me. Click image for larger version. Preliminary estimates for 2010 data from the Carbon Dioxide Information Analysis Center. Graphic by Elizabeth Shell. Since returning from China, Yoram has co-authored a working paper called “Impacts of Climate Change on Milk Production in the United States.” For a lighter, unbalanced take on the study, see “Washington College Students Rally to Protect Cows From Global Warming,” which attributes the research not to Bauman but to “University of Washington economist Rainbow Moonglow Rabinowitz.” And in a final bit of news, Yoram is now married. He offers the following newlywed advice: “Be careful about scheduling comedy tours that conflict with your anniversary. (Fortunately she appears to have forgiven me!)” This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Environmental Stand-up Economist: ‘We’re Going to Find Out How Bad Climate Change Really Is’ appeared first on PBS NewsHour.

[Watch Video] We round out “Ray Kurzweil Online” with the third and final installment of our miniseries. Thursday’s outtake with Mr. Immortality: Does Kurzweil believe that an avatar of his dead father — created with artificial intelligence and a lifetime’s worth of data and mementos — is, well, his actual father, the guy who died when Ray was 22? This is a step beyond Kurzweil’s stated objective — to stave off death ad infinitum. This is bringing the dead back to life. But what form of life? What if a stranger administers the Turing Test and can’t tell if the avatar is human or pure software? Does that make the avatar a person? Would it in any sense be conscious? Would it be a man, a machine, or something else entirely? The documentary “Transcendent Man” explores Kurzweil’s quest to reincarnate his dad. We asked him how that quest influenced his goal of “immortality today.” Part one: Futurist Ray Kurzweil on Melding of Man and Machine Part two: Ray Kurzweil’s Immortality Cocktail Enough Ray Kurzweil for awhile, at least on this page. For those who crave more, you might check out his webpage. Name: John Weyrich Question: Why are you still working and at what age do you hope to retire? Paul Solman: Because I cherish my work and consider it a genuine privilege — both at the NewsHour and at Yale, where I teach. To quote two of my colleagues at school, both older than I: “I’ll keep stumbling in till I no longer can” and “I’ll die in the saddle.” Like them, I hope never to retire and won’t, so long as others continue to signal that I’m useful to them by continuing to pay me — or otherwise convince me I’m not wasting their time. By continuing to post questions to Making Sen$e, for example. This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Ray Kurzweil on Bringing Back the Dead and a Viewer Question: When Is Paul Solman Going to Retire? appeared first on PBS NewsHour.

[Watch Video] Author, inventor and futurist Ray Kurzweil has been a key voice in our occasional series on the future of technology. The latest installment on the advent of immortality debuted here on Making Sen$e July 9. As with economist Paul Krugman, our extended interview with Kurzweil included many fascinating bits that didn’t make the final cut. So we continue Tuesday with one of them — a closer look at what Kurzweil has dubbed “the singularity”: the melding of man and machine to the point where one can’t tell one from the other. But in the spirit of your-guess-is-as-good as-mine (if not Kurzweil’s), mind telling us what you think? Will we one day be backing up our memories the same way we save photos to the cloud? Will technology augment our vision, our movement, our thinking from here to eternity? If decrepitude becomes obsolete, would YOU like to live forever? Comment below, or to me on twitter: @PaulSolman. Name: Barbara Dukor Question: I’m 67, single and retired, and I depend on Social Security and a small pension. Should I buy gold now? Paul Solman: You mean today, with gold currently floor trading at $1,579.30 an ounce ? Or a few weeks ago, when you asked, and gold was at $1,575? And in any case, how would I know? The price of anything is the collective best guess at that moment of people putting their money where their mouth is. Often, they get carried away and become too exuberant, leading to bubbles; or too anxious, leading to over-corrections. I find it devilishly difficult to spot those moments, however. For what it’s worth, I am neither long nor short gold, and have no sense that gold is at either extreme just now. But a bubble or an overcorrection could prove me wrong. This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Buying Gold and Futurist Ray Kurzweil on Melding of Man and Machine appeared first on PBS NewsHour.

[Watch Video] Will we one day be able to live forever? Interesting question, especially for a page where I usually take your financial, rather than science, questions. But what is the goal of economics if not the greatest good for the greatest number of people? Substitute “happy, healthy, never-ending life” for “greatest good” and you can see where we’re going with this. According to inventor/author Ray Kurzweil, eternal life is now actually on the horizon — the near horizon. He predicts that by 2029, biomedical technology will be extending longevity faster than we age. To optimize his own immortality odds, Kurzweil takes some 150 pills a day, maintains a strict diet, injects himself with a substance that keeps “cell walls supple” in babies but diminishes as we age. “I mean, I can never talk to you and say ‘I’ve done it! I’ve lived forever!’ But the goal is to put that decision in our own hands rather than the metaphorical hands of fate,” Kurzweil told me. Of course, some techsperts scoff at all this. If you want to be immortal, said Craig Venter, co-sequencer of the human genome and noted recently for having created a new life form, do something useful with your life. This is the fourth installment of our occasional series on the future of technology. We’re posting it online ahead of Tuesday’s broadcast. The three previous pieces are available below: Tech’s Next Feats? Maybe On-Demand Kidneys, Robot Sex, Cheap Solar, Lab Meat [Watch Video] Downloadable Gun Parts, Personalized Bioterror: the Downside of Innovation [Watch Video] Man vs. Machine: Will Human Workers Become Obsolete [Watch Video] This entry is cross-posted on the Rundown- NewsHour’s blog of news and insight. Follow @paulsolman !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); The post Disappearing Dead: Economic Optimism about Immortality appeared first on PBS NewsHour.

In the last installment of our extended profile of Paul Krugman, we turn to his wife Robin Wells. An economist who also co-authors textbooks with him, Wells talked with us at their home on a particularly rainy day — which had us moving around during the interview — about what the pair disagrees on and her analysis of politics and the financial crisis. (Transcript below) For those who would like to catch up on our series (or watch it again), here’s the full list: Krugman on European austerity, with a response from Jacob Kirekegaard of the Peterson Institute for International Economics: Paul Krugman on Germany’s ‘Whips and Scourges’ Krugman focused on Spain and Germany with critique from Terence Burnham: Paul Krugman on Europe ‘Doing the Unthinkable’ Krugman on his former boss, Ben Bernanke: Paul Krugman on Ben Bernanke’s ‘Green Shoots’ Krugman’s take on what happened in the great crash of ’08, and if we are in danger of forgetting the lessons learned and getting ourselves into yet another financial disaster: Paul Krugman on the ‘Cartoon Physics’ of the 2008 Crash TRANSCRIPT: ‘Robin Wells on Universal Coverage, Europe Unwinding and Husband Paul Krugman’ Video above. Narrator: Robin Wells is Paul Krugman’s wife and textbook co-author. An economist who’s also a yoga instructor, she went to the University of Chicago, got her PhD at Berkley in international finance and debt crises, did a post-doctoral fellowship at MIT, where Krugman was teaching in the early 1990s. A profile of the Krugmans in The New Yorker magazine said she’s often the political oomph behind her husband’s economics. Is that true? Robin Wells: I think that’s true, although I think it’s less true than it used to be. I think that in the end I probably do have the more political mind. I think maybe I’ve given him material to work on for a while! He can run with that for a while before I have to fill him back up! I think it’s really hard for Democrats to understand what they’re facing, and because I grew up in the South, because of my background, I feel like I get it in a way that’s not easy for people who haven’t lived there to “get it”. Paul Solman: And what is the background? RW: I grew up in the South. My family is mixed. It’s part African-American, part American-Indian, part Scottish, part English, part Irish, you know. So, I understand sort of the radical nature and the lack of rationality that you often perceive. Sometimes countries have to go through periods of crises and then rediscover why it’s important to be bipartisan and compromise. –Robin Wells Paul Solman: Is there anything you and he disagree with about the political economy? RW: Well, when the healthcare debate came along I was more for the idea of holding out for universal coverage than he was. But I think in the end he was right because I think politically having the healthcare reform bill that we did have is flawed and is, you know, hodge-podge as it is. It sets a precedent. PS: The precedent of universal coverage. RW: Of coverage. So I think he was right there. I think that I’ve been more right about the sort of, the inexorable kind of unwinding of Europe. I think he was more hopeful, and I think I was more pessimistic, and I think I probably have been borne out on that. I think what it is, is that we kind of confirmed each other’s gut instincts. I think one of the things that I’ve done is help confirm his gut instinct and hopefully haven’t, you know, confirmed bad things. PS: And what’s your analysis of why things are from your point of view, as dire as they are? RW: Sometimes countries have to go through periods of crises and then rediscover why it’s important to be bipartisan and compromise and if you haven’t had a deep crisis for a while, you feel like you