'Meet the Press' transcript for Sept. 13, 2009

(Announcements)

MR. GREGORY:  And we are back to talk about the economy.  And as much as we've been talking about health care, some might say that it is unemployment that is America's dirty little secret.  And, Joshua, you have written the cover story for Time magazine.  This is the cover:  "Out of Work in America: Why double-digit unemployment may be here to stay and how to live with it." And this is what you write, it's very interesting:  "America now faces the direst unemployment--employment landscape since the Depression.  ...  And if the result is that we're stuck with persistent 9 percent to 11 percent unemployment for a while--a range whose mathematical congruence with that other 9/11 is impossible to miss--we may be looking at a problem that will define the first term of Barack Obama's presidency the way the original 9/11 defined George W.  Bush's.  Like that 9/11, this one demands a careful refiguring of some of the most basic tenets of national policy.  And just as the shock of Sept.  11 prompted long-overdue (and still not cemented) reforms in intelligence and defense, the jobs crisis will force us to examine a climate that has been deteriorating for years." This is scary stuff.

MR. RAMO:  Yeah, it's terrifying.  And it resembles a lot of the other elements of the economic crisis, which is things that sort of defy what the experts tell you.  The best prediction--when they were coming up with a stress test for the banks, the best prediction of what unemployment would be this year was 8.9 percent.  We passed that in the spring.  And so this is another one of these things that just sort of seems to be cascading beyond control. Last week we had the dubious honor of passing Europe in terms of unemployment, which has, you know, long been sort of the pride of the United States; well, at least we're not Europe.  What's going on seems to be a fundamental shift in the economy and the nature of how jobs are created and why they're created, and that suggests that things could actually get much worse.

MR. GREGORY:  And that is--it's a frightening prospect and one, Erin, that the White House has not anticipated.  They put out their own projections about where unemployment would be, and it has exceeded that.  So as they talk about four million jobs created or saved, they're not dealing with this kind of persistent unemployment that would lag behind any recovery.

MS. BURNETT:  Right.  And if you look at transformative periods in American history, you know, we went from being an agricultural economy, for example, to an industrial one, and you saw that big shift in jobs.  That's what it seems like they've tried to identify, that we're in the midst of one of those shifts.  We've been using--losing manufacturing jobs since 1980.  This has been, to your point, a very long process.  So what comes next?  They've identified that as alternative energy.  That's going to be where it comes from.  We're going to do retraining.  But there's a huge question mark as to whether that's possible.  And when you look at where the leadership, by the way, in that area is coming from, it is clear it is coming from China.  All the main areas and all--not just the jobs, the innovation has actually come from there.  So if it's alternative energy, it's very unclear how we capitalize on that and get job growth.

MR. RAMO:  And it may be a piece of--you know, it's likely to be insufficient.  In the three great periods of tremendous job loss--the 1930s, the 1980s and today, periods when we were up to 10 percent unemployment--the main difference between the 1980s and those other periods was the '80s, when growth restarted, people got jobs.  Today, many of the jobs that people have lost are never coming back, and we're just not seeing any sort of attempt to deal with that.  We need a massive rethink of the way we deal with unemployment in this country.  People talk about this idea of, you know, what does Obama do after health care?  Well, I think it's got to be unemployment. You've got to have some really imaginative approach here that says we're going to change what it means to be unemployed in America and we're going to change the way jobs are created.

MR. GREGORY:  Not just job retraining, which is what we've heard for over a decade.

MR. RAMO:  Right.  Retraining's a part.  But, you know, one of the problems, you look at the retraining stuff, you retrain these people for six months to get jobs that they're usually out of in one or two years.  The kind of retraining that's necessary is the stuff that goes on for one or two years, that pays for you to have internships...

MS. BURNETT:  Right.

MR. RAMO:  ...to manage really high-level skills.  It's a totally different conception of the way that the economy works.  But it's the kind of thing we need to do.  Between 1999 and today there have been no new net jobs created in the U.S. economy, and the Fed is calling for very limited job growth in the next five years.  You're looking at 15 years without job growth.  That's not a way to have a powerful country.

MR. GREGORY:  You know, it's interesting, Chuck, the political challenge here is that just like health care, when you talk about the economy, fundamental change is so difficult to pull off politically.  In other words, in health care, getting to the root cause of what's driving health costs upward.  In this way, if you--if the president is facing, in an election year, 9 to 11 percent unemployment, that's a huge problem.

MR. TODD:  It is, because it's an easy symbol to grab onto.  I mean, you know, you go into politics, fortunately or unfortunately, that it's the simple thing that an electorate digests.  And that will be the simple thing, this idea of unemployment.  You know, it's why every election expert you talk to, when they try to predict 2010 or 2012, they'll say, "You tell me what unemployment is and I'll tell you whether he wins or--he wins or loses, or how bad the margins will be on either side." So I think, look, they know it, they know it's this.  I go back to something.  It's like, you know, I went to one White House official and said, "OK, so, you know, this is health care week," and he says, "No, it's always the economy." And you know the person I'm talking about.

MS. BURNETT:  Mm-hmm.

MR. GREGORY:  Right.  Yeah, yeah.

MR. TODD:  He's like, "It is always the economy.  It is always it.  It is always it." But you go to this thing, you know, and, and this crisis about unemployment, it's not just that we have this--it's because more people are trying to get back into the work force.  Don't forget, people are aging to a point and people are working now past 65.

MS. BURNETT:  Right.

MR. TODD:  And that's--that, like, adds to the problem.  You know, there's another issue here, right, where people are staying in their jobs and so younger folks can't replace them.  So it is a...

MR. RAMO:  This is, by the way, one of the records we hit last week is the record number of people who--long-term unemployed, people we've been out of work for more than 27 weeks.  We've never seen that number before.

MS. BURNETT:  But when you take it, this unemployment issue, and you go back to the tax issue, that's where you start to say, what are we going to do?  I mean, we are projected, by the Obama administration's numbers, to be spending more than we take in in this country through the year 2019.  We are expected to borrow 40 percent of our budget next year.  Taxes are only accounting for 27 percent of the budget.  So as you come into that election cycle and you're looking at an employment rate that is so elevated, and you're looking at an unsustainable fiscal situation, it comes down to this:  Are you going to be forced to raise taxes in the midst of what is a severe employment recession, if not more?

MR. GREGORY:  The president's on Wall Street tomorrow giving a very important address about the future rules of the road for Wall Street.  Here's the cover of The Economist magazine:  "One year on, what's changed?" Joshua, what's changed?

MR. RAMO:  You know, not a whole heck of a lot in terms of the amount of risk taking, the culture of risk taking.  In fact, we're talking about the difficulty of trying to reregulate industries, the financial service industry's been a great example of that.  You basically have the same kind of activities going on, the same kind of speculative activities occurring that were occurring a year ago.  They're not any easier to regulate.  The exposures throughout the system are as large as they've ever been.  And the risks we face today, that you and I face even though we're not in the financial industry, because we're all networked together, are shared.  What has changed, reality, is not very much.

MR. GREGORY:  Erin:

MS. BURNETT:  It's interesting.  Some conversations with, with officials at Treasury, they actually think the biggest risk right now is the banks are taking too little risk.

MR. GREGORY:  Hm.

MS. BURNETT:  So it's very unclear.  I mean, that's their perception. Obviously, when you look at it from the ground, it would seem that what you're saying there is that in a sense very little has change.  But this reform that they're pushing through, that's, I think, what the president's going to be talking about tomorrow when he speaks on Wall Street.  It is unclear exactly what would change as a result of that.  There seems to be a lot of argument over who's going to get the regulatory authority as opposed to what exactly they're going to regulate.  They say we're not going to have systemic risk, but nobody really knows exactly what that means.  So it, it...

MR. GREGORY:  And when...

MS. BURNETT:  Yeah.

MR. GREGORY:  And a year ago we were talking about housing.

MS. BURNETT:  Mm-hmm.

MR. GREGORY:  Are we in much better shape in terms of housing?

MS. BURNETT:  I think that is the elephant in the room.  We, we--it has really gone on the back burner in terms of the dialogue, but it is crucial. There are some who say housing prices could go down another 25 percent.  We found out this week that all these mortgages that were suppose to be modified, people who are underwater, Bank of America only is modifying 7 percent of the eligible loans.  So we have a real issue in housing.  Right now you're looking at potentially half of American mortgages are going to be underwater, where the mortgage exceeds the value of the home, within the next year and a half. And when you combine that with a lack of income growth, it's hard to see how the consumer gets out of it.  So I think you're going to start to hear--and maybe you know more about this than I do--the White House rhetorically talking a lot more about it, and extending those homebuyer credits.

MR. TODD:  You know, the president himself has identified that that program is not working.  He has admitted it.

MS. BURNETT:  Mm-hmm.  The mortgage modification one.

MR. TODD:  He has admitted that that is not working the way they had designed it.

But two things on this financial regulation that I find fascinating, just on the political front.  One, the administration wrote the bill.  You know how they bragged about, oh, they're going to let Congress.

MS. BURNETT:  Mm-hmm.

MR. TODD:  I talked to one person who said, look, they don't have--Congress doesn't have the capacity to write a really smart financial regulatory reform bill.  So that, that was number one.  The second thing about it that's interesting is just how I think you're going to see the president latch onto it because Republicans, everybody seems to agree you've got to have more regulation on this front.  But the one unattended consequence is going to be this.  Congress a lot of times reforms the last problem, and it's always that unintended consequence...

MS. BURNETT:  Right.

MR. TODD:  ...what new loophole is created.  We've seen it with campaign finance reform for years, where Congress is always reforming the last issue and doesn't know how to anticipate the next issue.

MR. GREGORY:  All right.  Well, the--one--my question about New York tomorrow for the president is does he call Derek Jeter to congratulate him on passing Lou Gehrig?  He's got more hits than any other Yankee.

MR. TODD:  I'm sorry.  Wait, wait, wait.  I'm...

MR. GREGORY:  He's a great guy.

MR. TODD:  I'm sorry, love Derek Jeter, but only the Yankees, only the Yankees can somehow brag about not getting to 3,000 hits.  I'm a baseball fan, you're a baseball--3,000 hits is the mark.  Hey, Derek Jeter...

MR. GREGORY:  He's going to get there.

MR. TODD:  ...call me in a season and a half when you get the 3,000.

MS. BURNETT:  Wow.  He sets the bar high.

MR. GREGORY:  All right.  Wow.  I awakened the giant there.  All right. Thanks...

MR. TODD:  I'm sorry.  Only the Yankees do that.

MR. GREGORY:  Thanks very much to all of you.  And we'll be right back.

(Announcements)

MR. GREGORY:  That is all for today.  We'll be back next week.  If it's Sunday, it's MEET THE PRESS.

More from NBC News broadcasts Struggling species gets helping hand Astronaut over the moon for daughter’s birth   Panel examines cancer screening confusion Report: Vet aid program riddled with fraud Knox speaks out, calls victim a ‘friend’ McCain says he enjoyed Palin’s book   Polluters, watch out for 'eco-cops'   Follow on Twitter: Making a Difference

MORE FROM MEET THE PRESS

Meet the Press Section Front

Nov. 22: Senate roundtable, Brinker, Snyderman Nov. 15: Clinton, Duncan, Gingrich, Sharpton Nov. 8: Casey, Barbour, Rendell, roundtable, Brokaw Nov. 1: Tim Geithner, David Plouffe, roundtable Oct. 25: Cornyn, Schumer, Burnett, Sorkin, roundtable Oct. 18: Jarrett, Dodd, Kyl, Shriver, Podesta Oct. 11: Levin, Graham, McCaffrey, Myers, roundtable Oct. 4: Ambassador Susan Rice, roundtable Sept. 27: Bill Clinton, Paterson, Kyl, Webb Sept. 20: President Obama, Sen. Graham, Rep. Boehner, roundtable Meet the Press Section Front   Add Meet the Press headlines to your news reader: