tv Charlie Rose PBS July 1, 2013 11:00pm-12:01am PDT
>> charlie: welcome to the program. we go first this evening to egypt and talk about the protests that are taking place in that country with naguib sawiris, the telcome billionaire who has played an important part in the conversations, also steven cook of the council on foreign relations. >> this is part of a process that began with the uprising in january 2011. egyptians are engaged in a debate, a national debate, about their identity. of course, many millions of people were out in the streets for a variety of reasons, whether it's economic grievances or concerns about the way in which president morsi and the muslim brotherhood had been governing egypt which was
increasingly author they'rian, but overall what's been going on in egypt is a fierce national debate about what kind of government people want, what kind of society they want, and what the relationship is between religion and society. to this point, nobody has an answer to that. that's why you've seen the kind of instability and political uncertainty in egypt that forces the military to take the step that it has. >> charlie: we continue this evening with the discussion about the federal reserve and the chairman been bernanke with jon hilsenrath, mark gertler and alan blinder. >> i'm going to defend bond traders for a second. i think the fed did fumble a few messages along the way here. not in the press conference that the chairman had a week ago. the message was pretty straightforward there. if you go back to april there have been a lot of minged messages coming out. they put out a statement on may 1 saying they might raise increase bond purchases at some point. and then it kind of clarified and explained that. i think people in the markets
have felt a little whipped and on that point. the other thing i'd say about unemployment and this focus on unemployment is, you know, i think in our generation we've never seen a fed as focusedded on unemployment as it is now because for 30 years it had been focused on getting inflation down to this 2% level and keeping it there. >> charlie: we conclude with mark neikrug, composer, pianist and artistic director of the musical festival. >> what was fascinating was when they did this dedication, the audience was not amuse i can audience. it was a dedication of a cancer institute audience. totally broad. it was doctors. it was university people. it was patients. and when the performance finished, there was no applause. the conductor told me afterwards that he was scared. he finished, and he would
normally have applause and turned around and there was nothing. he slowly turned around and saw that half of the people were just in tears and just quiet. they didn't feel that it was necessary to applaud. then of course they did, thank goodness. because that would have been... but it works. it just absolutely works. >> charlie: egypt, the fed and the power of music in healing when we continue.
>> charlie: in egypt, mass protests against mohammed morsi and the muslim brotherhood have engulfed several cities in that country. millions have taken to the streets in the largest demonstrations since the ousting of hosni mubarak. the brotherhood headquarters in cairo were ransacked after an overnight siege. at least 16 people have died across egypt as calls for morsi's resignation have
intensified. the egyptian army reentered political life in a dramatic fashion on monday morning. the country's top generals gave the president an ultimatum. if he is unable to resolve the situation in the next 48 hours they will. the egypt mohammed morsi described on this program last september now seems a disassistant prospect. it's a good time to have you help us understand what egypt has experienced. and what you want us to know first about the arab spring and second about the muslim brotherhood and your government. let me start with the arab spring. >> in reality the egyptian people are a good people. and are a reasonable people. very aware. they have an old and ancient history. i represented them with this march of democracy to achieve the general and the public
freedom. and the arab spring aims at reaching that goal so the people become free and the peoples are free and they are very real democratic process and there are good relationship with the rest of the world on the basis of peace and stability. and the mutual benefits and the mutual respect between other peoples and the countries and the governments that represent these people. the arab spring expresses a real soul in the arabic nations starting from tunisia, libya and egypt and now syria. >> charlie: on the phone from cairo is naguib sawiris, the telecom billionaire a longstanding opponent of the muslim brotherhood and steven cook, a senior fellow at the council on foreign relations. i am pleased to have them both on this program this evening.
naguib sawiris, thank you for joining us from cairo. tell me what's going on today and where do you think it's going? >> this is the second day where the egyptians have have gone down to the streets in millions. this is the largest gathering in the history of egypt. never before so many people -- old people, young people, children, old woman, wives, kids, everybody is on the streets, you know. the crowds today are even higher than revolution when president mubarak was stopped as you know. you know that this movement has gathered 22 million signatures to remove morsi and the muslim brotherhood from egypt. the amount of people on the streets today are even higher than these numbers, you know. so the feeling here in cairo is that morsi is is gone. the muslim brotherhood's regime is gone. we are waiting for the president to leave in peace in order to
avoid any repercussions in the country as some of these fellows are retired terrorists and jihaddists there are repercussions in case they don't want him, you know. >> charlie: do you think he will leave? >> he has no choice. you can only rewind the movie with mubarak, you know. he has no choice. the amount of people in the streets today are two times or three times the amount of people who toppled mubarak. it's not only in cairo. it's alexandria. all the offices of the muslim brotherhood have been burned down and closed. the people have closed the governments. you know, there is a civil -- how can i say -- disobedience. you know, people don't want this government, you know. and my feeling is is that he has no choice, you know. if he wats to save his family
from what happened to mubarak, he should leave in peace. >> charlie: what role would the army play? >> the army has been keeping cool until now, you know. but they have issued a statement right now giving the president 48 hours to respond to the people's demands as they call it, you know, which means that the president cannot leave the country in this current dead lock without a decision, you know. he has elected not to come out tonight after he have canceled the press conference. i mean if i was in his place i would take my wife and kids and leave. >> charlie: you'd leave the country. >> yes, of course. then he can avoid the fate of mubarak because many people now have died again. people hold him responsible for the death of these people and for all the damage that has occurred to egypt in the last three years of their reign, you know. >> charlie: is there anyone central issue that is is driving these protests?
>> i think it's mainly the fractious nature of that regime that has tried to oppose everybody and has been... has revenge as an agenda, you know. mainly i would say in truth that it's the lack of efficiency and deficiencies in the economy. i mean the failure to bring egypt back to a normal standing. we have no fuel. we have no bread. there is no water. i mean, they are free but they have no friends. they have maiden mes of everybody. saudi arabia and the emirates. they have spoiled relations with them. they have spoiled the relations with the other egyptian... they think they live alone. i think it was greed of power and the feeling not to... no need to share or to acknowledge other factions of the society who don't believe in the religious state, who don't believe in this way of handling egypt, you know.
>> charlie: what do you think other arab countries would say if morsi's forced to leave? >> well, i think saudi arabia made a very good statement today. it said it is is supporting the egyptian people. i think your president, for a change, should stop supporting the is muslim brotherhood and should say that he supports the egyptian people and their demand for a democratic and civil society that we are all aspiring for. i think most of the arab countries will be very happy that the egyptians have woke up and regained their revolution. we didn't go out and make a revolution out of a dictatorship to fall into another dictatorship, whether it's religious or not. >> charlie: steve cook, you've been listening in on this. tell me what you think. >> just a year ago people poured out in tahrir square to welcome president morsi as the new democratically elected president of egypt. over the course of the last year things have changed. and the military which had
sought to move to the background, to not administer the country on a day-to-day basis clearly got the message by the many millions of people who are out in the streets yesterday demanding change, demanding an end to morsi's administration came out with obviously this statement saying that the political forces need to find a way forward or within 48 hours the military will establish its own road map. you know, this is part of a process that began with the uprising in january, 2011. egyptians are engaged in a debate, a national debate about their identity. of course, many millions of people were out in the streets for a variety of reasons, whether it's economic grievances or concerns about the way in which president morsi and the muslim brotherhood had been governing egypt which was
increasingly authoritarian. but overall what's been going on in egypt is a fierce national debate about what kind of government people want, what kind of society they want. and what the relationship is between religion and society. to this point, nobody has an answer to that. that's why you've seen the kind of instability and political uncertainty in egypt that forced the military to take the step that it has. >> charlie: do you believe he'll be forced to step down sooner rather than later, steve? >> well, it is is somewhat beyond prediction these days. but of course with so many people out into the streets, it's hard for the brotherhood to maintain the defiant stand that it is everybody else's problem; it's not the brotherhood. i think that it's clear that the military has grown impatient with the brotherhood, and the brotherhood's position with regard to the slide... the economic slide, the collapse of
the egyptian economy, the questions about the quality of the brotherhood's rule. so while the military has issued a clarification saying that this isn't a coup and they have no intention of being engaged in politics, it's hard to see how morsi hangs on for very long. >> charlie: naguib sawiris, what role are you playing in all this? >> i'm, you know, i'm from the opposition. i formed the free egyptian party with my colleagues, you know. to give credit to people who deserve it. this is not me or the other opposition but it is the people of egypt, the young people of the movement. they have went out and gathered these signatures from every egyptian to say we don't want morsi. we don't want this president. we don't want this regime. we don't want the muslim brotherhood. in the beginning people took this movement lightly and they didn't take it seriously. in the end this is the movement that really topples the regime. so my role is i'm part of that
because i have been against these people from the beginning because of their lack of understanding of what real democracy is, what the civil society, what the constitution should be. it should be a matter of everybody there deciding to turn this into friends and family, you know. >> charlie: and is their a leader among the people in the streets in such huge numbers? is there one person that would be put forward as a possible new president? >> no. these guys this time they are not repeating the mistake of last time. i mean their proposal is very clear. they want the head of the constitutional court to act as a temporary president and to appoint a technocrat as the head of the government made up of 15 members who are qualified to run the country for a year temporarily. then run new elections, presidential elections under the supervision and according tonat.
and then... the parliamentary election and write a constitution that really reflects all the people of egypt and is not just reflective of a minority religious faction. >> charlie: steve, can you imagine that morsi would give up power? >> well, the brotherhood and president morsi have been clear that they retain legitimacy because they were elected. in addition, the brotherhood constitutionally as essentially see themselves as kind of an elite group that can transform the country. don't seem able to voluntarily give up power. you shouldn't get a step ahead of ourselves. the military has not issued its own road map just yet. the 48 hours are not up just
yet. it's very hard to see how a consensus can be built between the morsi and the anti-morsi factions. but he has not left yet. there is still more to this story to be told. if he doesn't leave, it will certainly put the military in quite a difficult position. they will have to once again for the second time in almost three years have to push an egyptian leader from office. the difference between now and february 2011 when mubarak was forced from office is that mubarak had virtually no one who would fight on his behalf although the brotherhood supporters are vastly outnumbered by the number of egyptians in the streets. they still remain defiant to this moment. so it is a rather dangerous situation in egypt right now. >> charlie: naguib sawiris, when you look at this situation, what should the president of the united states do in a crisis
like this? >> you know, he should support the egyptian people. if the egyptian people go 20 to 30 million in the streets of egypt and call for the overthrow of a religious regime, he should stop supporting this regime. i must tell you and it really hurts me to say that. many egyptians, liberal and secular egyptian feel completely let down by the administration of the u.s. support to mr. morsi and his gang during this last year. you know, we would have gotten rid of him earlier if they did not feel he had that support. with this support he misunderstood that support and used it to go against his own people, to declare himself as... you know, using pressure, putting all his friends and family in all key positions, you know, appointing the general attorney with a phone call from the president, you know.
so wen mess partly people here in egypt i'm really sorry to say that but they blame this blind support to the muslim brotherhood. i mean, i hope... i know that the israelis for sure are not that stupid. i don't think they would have believed him, you know. but this is brought us to this point. i mean today okay it's not going to work anymore. we are now this this night and tomorrow night the most dangerous two nights in egypt because we don't know what these people will do. they are retired terrorists, as i say. they have a lot of weapons that they've acquired from libya and so on. if they did use it against the egyptian people. >> charlie: on that ominous note, i thank you, naguib sawiris for talking with us. i know it's late in egypt. we thank you for joining us once more. >> thank you charlie. nice to talk to you. >> charlie: steven cook, thank you. pleasure. >> thank you, charlie.
charlie: back in a moment. stay with us. we'll talk about the federal reserve the federal reserve has been at the center of the economic recovery since the financial crisis. spansive programs that include three rounds of bond-buying also known as quantitative easing, have pushd the limits of monetary policy. the chairman ben bernanke made waves on june 19 during a quarterly news conference. he said that if the economy continues to improve, the fed will gradually roll back 85 million dollars in the u.s. government securities it purchases each month. >> if the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriately to moderate the monthly pace of purchases. ' if the subsequent data remained broadly aligned with our current expectations for the economy we would continue to reduce the pace of purchases in measured steps through the first half of next year ending purchases around mid year. >> charlie: these remarks startled financial markets although they have since regained their
bernanke is widely expected to depart from the fed at the end of january during the end of his second term. jon hilsenrath is with me tonight. mark gertler is an economics professor. he's been friends with ben bernanke over 0 years. alan blinder from princeton is a former fed vice chairman. his famous book is "after the music stop." i am pleased to have all of them here. welcome. >> jon let me just start with you. i want each of you to tell me what is happening because of what bernanke said? >> well, the way i've been describing it, it's kind of like the markets are from mars and the fed is from venus. the markets got very excited about this idea that the fed was going to pull back on its bond buying. >> charlie: why did the market get excited about that? >> it's a bit of a puzzle because it had been telegraphed for weeks before the fact, but when it came out of the chairman's mouth, you know, i think that in some ways that the
markets were like a spring that was coiled particularly long-term interest rates. that they had been pushed so far down that they were ready to pop back up. it's interesting though because the stock markets have come back quite a bit. they're not down from their highs. >> charlie: what does that say to you? >> people are starting to come to grip s with the fact that the fed might pull back some of this but it isn't going to be very aggressive about doing it. they're going to be very slow. >> charlie: and monitor it closely. >> it will depend on how the economy does. if the economy doesn't live upry expectations, then they don't ere or was everybody anxious to hear what he had to say and so therefore they wanted to read everything they could into it? >> i think the only thing you would fault him for is maybe expecting markets to receive the message with more nuanced than they were likely to do? as jon said it was a coil spring. markets tend to leap. you know, there's kind of a
contest. who can get to their console and make a trade first? so the markets ignored, i think, the nuance and said, you know, the fed will start reducing q.e. purchases in september. they'll be finished by next june. that's not what we thought yesterday. we better react to that in a big way. i think that's what happened. >> charlie: what do you think? i agree. i think it was classic overreaction. i think this is a fed that is committed to not remove accommodation early. they've named thresholds. unemployment has to go below 6.5%. >> charlie: is that the right threshold? >> i think that's a decent threshold. or inflation forecasts have to be above 2.5%. i think what bernanke was attempting to do was to clarify the transition to exit. what he was talking about was not suspending q.e. but reducing the pace of expansion of q.e. so once the markets i i think, had the time to look and see
what he really said i think you're starting to see a return to reasonable behavior. >> charlie: how would you distinguish between the three rounds of easing we've had? >> i think the first round which occurred right after... right at the time of lehman brothers clearly had effects. i think the goal of q.e. is to reduce long-term rates. you can see right upon the announcement period a drop in long-term rates, a drop in mortgage spreads. clear beneficial effects. the second round q.e.-2 was a bond purchase program in 2010. a little bit harder to tease out the effects there. but it's important to realize these policies work better when markets are under stress. markets were under less stress at that point. the last round sort of in between the two you see in effect on mortgage rates kind of harder to detect a major effect though. >> charlie: is the fact that he has publicly said, look, want to use the fed to try to bring down
unemployment. does that separate him from other fed chairmans? >> i know. i think fed chairmen have balanced unemployment and inflation. go back to volcker, inflation was really high. he felt he had to take steps to reduce inflation at the cost of higher unemployment. in fact i think alan has made this point many years ago. to start the protest of fed chiefs, they're always balancing unemployment and inflation. >> charlie: is that what you always said, alan? >> yes. but i'd like to just, a nuance of difference with mark. they have behaved that way for quite a long time. even volcker the great player of the inflation dragon saw things were getting bad and i eased up in 192 but here's the thing. i think ben bernanke is the the first fed chairman to be four square and just state explicitly, "i'm doing this to bring the unemployment rate down." "i'm not going to stop doing this until the unemployment rate is is down." you don't hear that from fed
chairmen in the past. >> charlie: do you agree that 6.5. is where it ought to be pegged? >> i think you could argue for a little bit lower number. this is the key thing. it's not a triggering for an automatic change in policy. i actually don't think they will jump at 6.5% unemployment. this is a time to actually think about it and consider it. basically what he did is give a guarantee they won't act before 6.5% but there's no guarantee that at 6.5 it's a trigger and they jump in tightening. >> charlie: how many people think that inflation will be go for the economy? >> a lot of economists do. when i have discussions with people like my dad about it, they have a very hard time grasping that idea. he complains about his food bills and the gas bills so i think it's a hard idea for people to get their heads around. one of the issues here is that what the fed wants is stable
inflation of around 2%. if you have inflation falling to 0 or if you have falling prices, that usually goes hand in hand with a very weak economy. that's really what the fed is talking about is an economy strong enough to give you consistent 2% inflation. i'll take issue with a couple of things we've talked about. one is the fed's communications. i'm going to do something unpopular and defend bond traders for a second. i think the fed did fumble a few messages along the way here not in the press conference that the chairman had a week ago. i think the message was pretty straightforward there but if you go back to april there have been a lot of mixed messages coming out. they put out a statement on may 1 saying that they might raise increase bond purchases as some point. and then they've kind of clarified and explained. >> that: i think people in the markets have felt a little whipped around. on that point. the other thing i would say about unemployment and this
focus on unemployment is i think in our generation we've never seen a fed as focused on unemployment as it is now because for 30 years it had been focused on getting inflation down to this 2% level and keeping it there so i think this really is an historic shift. >> charlie: that was my impression. >> you know, just that they're working so hard and because inflation is low and stable that they can put so much emphasis on up employment now. it's something i've never seen in my lifetime. >> we're also in a situation though where the objectives of inflation and unemployment are in sync. that is, inflation is running about a percent below target. the target is 2%. inflation is about 1%. unemployment is close to 8% so policies to bring unemployment down will bring inflation up. so there's sort of two objectives that are going hand in hand. >> they're also doing something that i think is very controversial even among economists which is to putnam
bers on the levels of unemployment that they're looking for. inflation is something that the fed controls in the long run and can target and say we want 2%. but the central bankers that i talked to get very squirmy when you start asking them to putnam bers on unemployment because there are a lot of other factors in the economy like productivity and government regulation that affect how much unemployment you can get. >> you have to recognize this is a very unusual situation because we're in a liquidity trap so the fed cannot use its conventional instrument which is the funds rate because it's at 0. so the fed has to communicate his intentions about the future. and the reason we have numerical thresholds is the fed wants to tell the markets, look, we're not going to raise rates until the economy has really improved. so it wants to commit to keep rates low so there's no premature upward movement on long-term rates. i think that's why we see this difference in policy, numerical
threshold the implicit assumption must be that the innation rate can be manipulated to reach economic objectives up to day maybe a little more tomorrow and then pull back on command. all experience amply demonstrates that inflation, when started, is hard to control and reverse. that was paul volcker. could anybody argue that we have set in motion inflation? >> no. i think we're years away from significant inflation. right now we're running percentage point under target at 1% inflation. there's considerable slack in the economy. i mean, hopefully we will reach a point where that's a danger and a consideration. but right now i think the danger is more japan-style deflation stagnation than an inflation situation. >> charlie: where do you, all three of you, see that the economic recovery today? >> i see it as very mediocre.
i think we'll be lucky, frankly, this year, 2013, the four quarters to make 2%. maybe a pinch above 2%. that's highly inadequate. it's also almost... it's exactly the rate that we've had for the last three years. that will be 4% average of... sorry. four years of 2% growth starting from where we were three-and-a-half years ago. that's very poor performance. i'm not worrieded about a burstout of the economy. joo i agree. i think we're in a situation now where considerable accommodation and stimulus from the fed is completely justified. the economy is weak. again the danger is more a lost decade like japan than an inflation of the '60s or '70s. >> charlie: which bernanke knows about.
>> this is the most interesting part to me of this drama we've had in last few weeks with the fed saying it's thinking about pulling back this bond buying. behind that forecast that they're going to pull back on the $85 billion is a pretty optimistic economic forecast. they think the economy could grow close to% by the end of the year despite all the fiscal head winds and more than 3% next year. that's a pretty rosey outlook. it will be fascinating to see if the economy meetsz those. that's actually faster than what wall street economists are expecting. if the economy meets those objectives, that will be a pretty impressive forecast. if it doesn't then everybody we've been talking about about the fed pulling back could be off the table. >> charlie: the second question is, could the fed or could fiscal policy have been different that would have given us a higher growth rate in g.d.p.? >> absolutely. alan, you can correct me if i'm wrong but i think the conventional estimate is fiscal policies cost us about a half percent of growth per year. >> charlie: do you agree with that, alan?
>> per year. but in 2013 you're probably talking more like a percent-and-a-half or two percent. just think about that. if we do two, maybe we could have done four with a more intelligent fiscal policy. this is a huge difference. on the fed's side its hard to see very much more that they could have done. ifn stead of $85 billion, it could have been $100 billion a month or something like that. there's not very much more that they could have done. >> charlie: fiscal policy is the issue in terms of the expectation or the hope that we might have had a higher level of growth? >> yes. but bernanke has done everything short of beg when he's gone up to capitol hill, begged congress to do two things that go hand in hand. one is don't pull back on fiscal policy. don't tighten fiscal policy in the short run. but come up with a credible plan in the long run so that the markets and the public understand that deficits looking
out 15, 20, 30 years are going to be under control. what congress and the white house have done is just the opposite. they've tightened in the short run and done nothing in the long run. >> charlie: over the next ten years the level of debt to g.d.p. is sustainable? >> yes. charlie: right. but that fails to look out to 10 to 20 years. if you're going to get control over the 10- to 20-year period you actually have to start doing some of that stuff now so people have time to prepare for it. >> and that's the big problem is what's going to happen 10 to 20 years from now with medicare and so on. there's no reason except for politics why we couldn't have a short-run stimulus that would be helpful. >> charlie: you blame that on the politics of what? >> the dysfunction in congress. the ideology. >> charlie: is it the dysfunction of one party, of the wing of one party or is it dysfunction in the ability of serious people to find a solution?
>> there's an unwillingness to compromise. i guess i would blame it on the house republicans if you want me to be explicit. >> charlie: alan, would you blame it on house republicans. >> i put more blame on the house republicans than on anybody else. but in addition to the ideology which has been very damaging, there is a lack of understanding this basic point that mark and jon were making that we really need some fiscal stimulus in the near term and substantial deficit reduction but well out there. by the way, that's mostly health care. i think it's still not very well understood. you know, stimulus has become an eight-letter word in washington. you're not even allowed to mention the concept as if it's evil, dysfunctional, doesn't work, whatever. when the evidence is that it did in fact work and things would have been worse without it. >> charlie: do we mean an investment in policies and things that including infrastructure and research and all that? that makes a difference in our
long-term productivity and our long-term competitiveness. >> yes. that's good stuff. but even if it's simple things like income tax cuts or payroll tax cuts that's going to put more spending into the economy. at a time when the economy needs it. >> by the way i think there's plenty of blame to go around on both sides here. it takes two to tango. it takes a white house to take part in forging a long-term deficit reduction plan. so i don't think you can put the blame on one side here. i mean the republicans have been talking about entitlement reform which has been very difficult thing for democrats to swallow. >> charlie: when i did an interview with the -- and i mean this real he'll curiously. the suggestion was that bernanke may not want to be reappointed. is that an accurate reflection of been bernanke. >> i can't get into his mind
but... >> charlie: if you can't, who can? >> look, he's probably been under stress more stress than any domestic policy maker in the post war world. when you think about what he's been through. first the worst financial crisis since the great depression. then a rather significant political crisis. to have to deal with all of that for eight years, i don't know how he's done it and how he's been able to withstand it. i think to me it's completely reasonable for him to think, look, i've done my job. i've done it well. it's sort of time to move on. >> charlie: do you think that's what he does? >> could be. harlie: alan? yeah, i mean, been bernanke is a friend of mark's who's a friend of mine. he hasn't confided in either of us nor would i ask him but every indication is that he sort of feels eight years was enough if not more than enough. as mark said, this was not an easy eight years by any stretch of the imagination.
and nobody will say he's shirking his duties if he leaves after eight years. >> charlie: what do they worry about his leaving? >> whether the next person will be able to handle a very difficult job of how and when. the when part might be more difficult, in fact, than the how part. but if the next chairman or chairwoman moves too quickly, they've seen repeatedly in this recovery that they've pulled back on some of these programs only to decide that they had to turn around and ramp them up. that's a very difficult question. we've seen in the last couple of weeks that the very important relationship that the head of the fed has with the markets, if the markets, if investors are confused or have doubts, it all, you know, it can have very disruptive effects for every american. i mean mortgage interest rates went up a full percentage point as a result of some words that
came out of ben bernanke's mouth that should have been in the few of a lot of people pretty well understood. >> charlie: alan, you were on the short list. >> that's what some people say. the only list that matters is the list that the president has in his pocket. nobody has seen that. let me just say one thing. i just want to say in answer to your question, charlie, i'm old enough to remember when the great paul volcker left the job and people in the markets were aghast that he would be gone and some guy named greenspan would take over. then after seeing greenspan in action, the markets thought it would be the end of western civilization if anybody ever took greenspan's place. then ben bernanke came on. now they're getting to feel the same way about ben bernanke. these were all three terrific fed chairs, but the point is the world doesn't actually end when the fed chairmanship turns over. >> i actually think there's something to be said for term
limits for fed chairmen which don't exist. but if you look at the european central bank and the bank england they have eight-year terms. >> charlie: you can't serve more than eight years. >> yes. i think one of the best things that bernanke... we'll see if he actually walks away. but if he walks away i think it will be a very positive development for the institution to put it on a path where you don't expect the whole place to rest on the shoulders of one person, that you have regular cycles of people. >> that was one of his goals coming in was to depersonalize the fed. to sort of get away from the maestro mentality that it was a singling person, chairman doing everything to build up the institution. so you thought about fed policy as opposed to the policy of the chairman. one thing i would say is that it does seem like the fed is a pretty well functioning institution now. there's a reasonable degree of harmony. i personally think there's a deep bench. i think there's a number of qualified people who have been
there right next to bernanke working along throughout the crisis. even though i'm biased i think still he's the best possible person for the job. i think there's lots of other tall ened people as well. >> charlie: so the stewardship of the fed will likely be in good hands. >> that's my best... could i disagree with one thing that mark said? i agree with most everything he said. but a problem for the fed recently -- and i think the reasoning behind the press conference announcement that been bernanke made -- is it was starting to sound like he was speaking with 19 voices. 19 voices is just too many. and there was a lot of confusion about what it would mean when somebody said something that seemed to be 90 degrees off of bernanke and so on. i think it was in part the chairman's effort, successful effort, i think -- effort to sort of get control of the
communication and say this is what we really think. this is what we expect to do. >> i would agree but i would just add one thing. i think john alluded to it earlier. we're in a brave new world of policy. it usedded to be before bernanke that you would adjust the funds rate every six weeks and that would be it. now we moved in the world where there's many more instruments of monetary policy. there's another significant instrument of monetary policy and it's q.e. it's a very complicated to communicate with q.e. as we just saw last week. here's what the problem is. the q.e. gives the fed some leverage over long-term interest rates. traditionally it had leverage, you know it controls the short rate except now we're at zero lower bound. q.e. gives it some learning over long-term rates except it's very imprecise. the fed doesn't know for sure when it adjusts purchases what the exact impact on long rates is so it has to sort of communicate this policy when
it's nothing but sure exactly how it will play out. that's some of the confusion we're saying. >> i think some people think that they're communicating too much right now. one of the dissenters from their last meeting said they should have just kept their mouths shut. they laid out a timetable for when they were going to pull back the bond-buying. but it totally depended on the economy meeting certain expectations. he felt it was too early. let's just keep it cool and see how things play out before we start telling people what we're going to do. >> what they were trying to do is clarify and the attempt to clarify let to conclusion. >> therefore it seems to me what's appropriate is been bernanke ought to do a conversation at this table to clarify all these questions. it's about time for that. i think the fed chairman ought to have at least one good conversation a year. don't you, alan? >> i do. i think it's a good idea charlie.
i think you should ask him. >> i think you should have other reporters here too. >> charlie: mark, will you make the call for us? thank you all. i'm a little bit concerned because i don't think any of you see when we might have a 3% annual gapped growth or unemployment at 6%. fair enough to say? >> we're still in a tough situation. it would help if congress got its act together. that's the first order of things. >> the fed's forecast is that we get over 3% next year. their expectation is that in 2014 these fiscal head winds start to wayne a little bit. the full impact is hitting us right now. as this pulls back we have a more vibrant housing market. we have consumers whose own balance sheets and finances are in better shape. and we have an economy that's ready to start controlling so that's their forecast. they've been wrong about it for the last three or four years. if you want an optimistic
forecast the best ones you're going to find right now in is in fed's... >> charlie: last word to you, alan. >> i was going to say that. i mean the fed is is above consensus. i don't think we're going to have 3% growth next year. i'd love to be wrong and have the fed right. but as jon said, the fed has been consistently too high. and the last thought, let's not forget that the fiscal follies aren't over. we still have a potential collision with the national debt ceiling coming up this fall. nobody in congress wants to think about that in june but something in the september/october, maybe november range is going to pole tensionally provoke another set of circumstances like we had in august 2011 which certainly didn't do anybody any good. >> charlie: thank you, alan. thank you, mark, thank you, jon. >> thank you. charlie: back in a moment. stay with us. we want to talk this evening about healing and music.
neurologist oliver sax wrote that music can lift us out of depression or move us to tears. scientists and composers are finding that music can do much more. it can lower blood pressure and ease anxiety. it can work when some medications do not work. it can even help patients with severe neuro logical trauma. joining me now is mark neikrug, composer and artistic director of the santa fe orchestra. healing ceremony was written to help ease stress for patients facing serious illness. i am pleasedded to have him here at this table for the first time. >> thank you. charlie: how did this come about for you, this looking at healing through music. >> i been interested for quite a while in the research, following all the neuro scientists who have turned to experimenting, trying to find out what really
goes on in the brain with music. then i was approached by dr. cheryl willman who was the head of a brand new cancer center at the university of new mexico. $100 million buildalling. she was a very or is a very interesting woman in that when designing this cancer center, she consulted with navajo healers. she consulted with healers from india. she built the cancer center so that there is no space inside that's more than five steps from looking outside. she designed the chemo suites so that they're almost like a spa on a balcony looking at fantastic view of the mountains. and she went to artists. she got a great hopi artist who
painted a gigantic painting for the cancer center. she got other painters. she came to me and asked if i would come pose a piece for the dedication ceremony of this building. having lived for close to 30 years with my wife who is a pueblo indian and on the reservation, i dmeu so much about ceremonial things in this the pueblos that i decided what i really needed to do was come pose a piece which in and of itself was a kind of a ritual that someone faced suddenly, which it must always be sudden, with the sense that there's something terribly wrong in their bodies afternoon the
anxiety and the stress of not knowing how to remedy that yourself, if you're not a yoga expert or someone who meditates, i knew that i could write a piece which simply by listening to it would put you in a calmer and more receptive place to heal. >> charlie: did you go back and look at music you had already composed to see if it had therapeutic power. >> what i thought about was compilations. you know, i remember recordings that i had made with bay toach son at as that then in the third transition end up as beethoven for relaxation. and i think all music has moments which are sthair putt i can in thatson. but this is the first piece i have ever written which was
specifically designed as such. and constructed with that particularly in mind. >> charlie: are you creating a symposium to focus on this? >> we put on a symposium as part of the chamber music festival in santa fe last summer. which was very interesting because this was done together with dr. william with the cancer institute. it was funded by denise richards' foundation here, gabriel angels, because she had a daughter, gabriella, who had this incredible experience with music just before dying. of cancer. and we invited not only all of the neuro scientists and the scientific brains but for the first time put them together with the music therapists which is a whole different group of people who are doing hands-on,
taking what the neuro scientists are learning and going into hospitals, into sloan-kettering, for instance, and trying to apply that. they basically had a symposium about what the state of the science is. we will do that again. >> charlie: what is the state of the science? >> it's evolving in leaps and bounds because of the machinery. they can measure things now which they couldn't measure ten years ago. so with the brain imaging, they can see exactly what happens to somebody. for instance, my piece, one of the sign tiffs got interested in it. they took the last movement and tried to measure autonomic nervous system. they hookd up eight patients one by one.
they played three minutes of silence, eight minutes of my piece, silence. they read the text of the piece. then they played the piece again. over that space of time seven of the eight lowered their blood pressure 22%. 22%. so all of this is evolving with aphasia for stroke victims. they've found that the place in your brain that deals with speech is slightly different from the one that deals with singing. they're doing therapy by having people who lost their speech sing. through singing they learn to speak. >> charlie: amazing what we're learning about the brain. >> it's the last frontier. charlie: yeah, i know. and music... i think we will
find more and more how powerful the tool of music actually is because it's not only the brain but it's biological. you know, we are so affected by listening to it that it can completely alter how we feel. >> charlie: back to this music you're creating as healing. how is it different? >> i was thinking about that. because it is different from what i normally do. i was thinking it's not dissimilar to, if you say, you know, could bobby fischer play a great game of checkers? of course he could. so i've taken what would be my really cutting-edge sound and thought, no, this needs to be not for a classical music
audience not for the philharmonic. it needs to be for a random person diagnosedded with a disease. so i pulled back the harmonic language to make it more accessible. mostly that's what it was about. the rest is is not all that different. other than that because of the ritualistic, there's a certain kind of rhythmic making you calm down. what was fascinating was when they did this dedication, the audience was not amuseical audience. it was a dedication of a cancer institute audience. totally brawtd. it was doctored. it was university people. it was patients. and when the performance finished, there was no applause. the conductor told me afterwards
that he was scared. he finished and he would normally have applause and turned around and there was nothing. and he slowly turned around and saw that half the people were just in tears. and just quiet. they didn't feel that it was necessary to applaud. then, of course, they did, thank goodness because that would have been... but it works. it just absolutely works. >> charlie: thank you for coming. great to have you here. again the album is calling healing ceremony. thank you for joining us. see you next time.