'Meet the Press' transcript for Nov. 1, 2009

MR. DAVID GREGORY:  This Sunday:  The economy pulls out of a deep dive, but can the recession really be over when so many Americans are out of work?  Can the economy grow on its own without the government propping it up?  We'll ask our exclusive guest, Treasury Secretary Timothy Geithner.

Then, Afghanistan.  A week of deadly violence in the region and a grim milestone for U.S. troops:  October is the deadliest month yet since the war started.  The president faces the human toll up close, greeting the bodies of the fallen at Dover Air Force Base.  What will he do now to win the war?  With us:  NBC News chief foreign affairs correspondent Andrea Mitchell, just back from Pakistan; Jim Miklaszewski, NBC News Pentagon correspondent just back from Afghanistan; and Jon Krakauer, author of The New York Times best-seller "Where Men Win Glory" about the death of Pat Tillman in Afghanistan.

Plus, an exclusive interview with the architect of the Obama campaign.  An inside look at how he reached the White House and whether nearly one year after an historic election he has fulfilled his promises.  With us, author of "The Audacity to Win," campaign manager David Plouffe.

But first, the Treasury Secretary Timothy Geithner.

Welcome back to MEET THE PRESS.

SEC'Y TIMOTHY GEITHNER:  Good to be here.

GREGORY:  So good economic news, the economy grew a little bit in the third quarter; has a lot of people thinking things are getting better.  And yet the market on Friday dropped pretty sharply.  Does Wall Street think the recession is over?

SEC'Y GEITHNER:  I think it is a good number.  It was--the growth was broad based.  It was investment, exports, consumption, housing for the first time. And it shows that, you know, just five months after the president came into office we got growths restarted.  But it's just the beginning and we've got a ways to go.  Unemployment's high and still rising.  This is a very tough economy still for huge numbers of American's businesses, so we've got a ways to go, David.

GREGORY:  Do you think the recession is over?

SEC'Y GEITHNER:  That's the judgment the economists will make, and they won't know until years from now.  But the real test of recovery will be when we have unemployment coming down, people back to work, businesses confident to invest again.

GREGORY:  What do people have to be braced for, despite this news?

SEC'Y GEITHNER:  Well, again, I think it's, it's, it's good news and it shows that when you act with force you can stabilize a crisis like this and, you know, start to repair the damage and bring things back.  But this is going to be a different recovery than the past, because Americans are going to have to save more.  A lot of damage was caused by this crisis.  It's going to take some time for us to grow out of this.  It could be a little choppy, it could be uneven, and it's going to take a while.  But I think, again, this is encouraging signs.

GREGORY:  Difficult days still ahead?

SEC'Y GEITHNER:  Well, again, I think for large numbers of Americans and businesses, small businesses in particular, it's a tough economy.

GREGORY:  So more difficulty before it gets better.

SEC'Y GEITHNER:  Well, it's getting better.  It's going to be better gradually, and we're going to make sure we keep at it until we have an economy that's growing again led by the private sector, of course, ultimately.

GREGORY:  Right.

SEC'Y GEITHNER:  You know, what the government did was to step in and make sure we're providing the tax cuts and investments necessary to arrest the crisis, get credit markets starting to open up again.  And we did that, that plan worked.  But we've got a ways to go before...

GREGORY:  But that's a big question, whether or not--yes, you have growth for the first time in four quarters.  But is any of this growth sustainable without government intervention?

SEC'Y GEITHNER:  It will be, it will be.  But what the government has to do in a crisis is to provide a bridge until the economy can repair itself and businesses are confident enough to start to invest again.  And again, you're starting to see it again.  Businesses now, I think they'll say--you talk to people across the country, they'll say that they feel that things are more stable now and for the first time they see orders starting to pick up.  And what'll happen is they'll start to invest again, they'll start to bring people back onto their payroll and this will get more momentum.

GREGORY:  But that happened hasn't yet--hasn't happened yet.  We'll get into that a little bit more in just a minute.

The question about consumer spending that really drove the market down on Friday, it's off, biggest level that it's been off in nine months.  Again, people are not consuming.

SEC'Y GEITHNER:  There's nothing new in those numbers on Friday.  They were in the GDP report.  No incremental news in those numbers.  So again, the overall picture for the economy is that consumers are a little more confident now, confident enough to start to spend again, investments starting to spend again. You know, there was another number on Friday that showed business confidence, in the Chicago survey, showing a little more optimism about the future, too. And--but, you know, again, this is a tough economy still, it's going to take some time.  But we're committed to making sure we're reinforcing this progress we've seen.

GREGORY:  A hundred and fifteen banks have failed so far this year.  Is the banking system safe?

SEC'Y GEITHNER:  The banking system is dramatically more stable than it was three months ago, six months ago, nine months ago, a year ago.  Just remember, again, a year ago today, last year, you had for the first time in almost 75 years Americans start to wonder whether they should be taking their money out of banks.  You had markets around the world come to a stop.  Economic activity just stopped, came to a standstill, like flipping a switch.  And right now you've had a dramatic improvement in confidence, you've had private capital come back into the system.  And for large businesses, they can now borrow again and they can raise capital again, and that's very important.  But small businesses, much more dependent on banks, they still face a really tough environment on the financing side, and we need to keep working to try to open up credit to them.

GREGORY:  Do we need another cash for clunkers program to stimulate the economy?

SEC'Y GEITHNER:  I don't think at the moment--well, let me start this way, David.  About half of the money in the Recovery Act, tax cuts and investments, are still ahead of us.  So there's a lot of force still moving its way through the system now, and you're going to see that continue to provide support for the economy going forward.

GREGORY:  Could you have had more impact if more of that money were paid out? You still have about $500 billion of the stimulus that has not been paid out yet.  How long will it take to get paid out?

SEC'Y GEITHER: Actually, I--again, it was designed to pay out over two years, because we knew it was going to take a long time to repair the damage we started with earlier this year.  So it was designed to pay out over this period of time.  And I think it's actually delivering better results sooner than we would expect.  I think we're seeing better outcomes in the financial sector, in the economy than many of us would've thought when we sat there with the president in Chicago at the end of last year.

GREGORY:  Right.  Well, but that's not exactly true, because the president's team said you'd keep unemployment to 8 percent if you didn't have the stimulus, so.

SEC'Y GEITHNER:  No.  No, you're right, the unemployment is worse than almost everybody expected.  But growth is back a little more quickly, a little stronger than people thought, and growth is a necessary condition.  With growth jobs will come, but growth has to come first.  But just look at the financial sector.  You know, you've had banks repaying money with interest. Taxpayers are getting substantial earnings on this big investment in the financial system, and that's delivering good, good returns for the American taxpayer.

GREGORY:  Let's talk about claims of success about jobs.  The White House says 640,000 jobs have been created or saved by the $800 billion stimulus.  There are Republicans who say the number is bogus, that it's just PR.  John Boehner, leader of the Republicans in the House, as you well know, circulated a quote from an economist at Carnegie, Carnegie Mellon University, and I'll put it up on the screen and you can look at it:  "One can search economic textbooks forever without finding a concept called `jobs saved.' It doesn't exist for good reason:  how can anyone know that his or her job has been saved?" You've got a lot of experience in the economy.  Is this PR or fact?

SEC'Y GEITHNER:  This is fact.  Again, at--when the president took office, this economy was falling at the rate of 6.5 percent at an annual rate per year, fastest rate in decades.  We were losing three-quarters of a million jobs a month.  Now, the pace of job loss has slowed dramatically, the economy's now growing again.  It's growing not just because the effects of the Recovery Act.  Many people opposed the Recovery Act, said it wasn't going to work.  It's working, it's delivering what it should result--what it should, it should produce.  Value of Americans' savings are up almost 35 percent since the beginning of the year.  Interest rates down.  These are substantially powerful returns on the Recovery Act, and they are delivering what they were designed to deliver.

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