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Week of 3.13.09

Previewing the Superpower Summit

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The world's economic superpowers are preparing to meet--will they devise a fix for the financial mess?

On March 13, financial ministers and central bankers of the world's economic superpowers will meet in London to lay the groundwork for next month's crucial meeting of their country's leaders, known as the G20. Will their work revolutionize the global economy and lift us out of this economic hole, or will politics get in the way?

David Brancaccio interviews Kenneth Rogoff, Harvard economics professor and former chief economist of the International Monetary Fund, about how high we should raise our hopes and what's at stake for America and the world.

Related Link

The London Summit

In the News

BBC: Special Report: The G20 Summit

BBC: Obama calls for G20 joint action

CNN: Brown: World needs 'global New Deal'

The Economist: G20: Talking-shop-on-Thames

New York Times: Obama and Brown Pledge Cooperation

Reuters: World's Biggest Banks to Meet In London

Viewer Comments

Commenter: L H
Policy makers need to begin to comprehend that they cannot borrow and spend their way out of this crisis that was caused by too much borrowing and spending.

Commenter: joe engel
it is quite remarkable that we spend without limit. the priorities are political and not economic, not even close. the spending should concentrate first and foremost on investments with return for a long time. reduce demand for energy and energy costs, as well as environmental costs will be reduced increasing the standard of living for all along with the quality of life.

Commenter: Dr Beavis
The road map Ken Rogoff described will impoverish the vast majority of Americans. There is no doubt that is the plan. As these financial "wizards" sit around looking at numbers on computer screens the real economy is shutting down. Real production is leaving the country permanently. Even as bad as the economy is the recovery plan devised by the same wizards who created this mess guarantees it will be worse 5 years from now... even worse 10 years from now. More debt is not the solution. The banking system backed by the Federal Reserve has proven itself to be fatally flawed. It's just a matter of time before the Fed loses control.

Commenter: John
PBS, why do you guys bring on economists that were
clued out ? Here is a link of how clued out Ken Rogoff is. Why don't you bring on the OTHER economist
Peter Schiff? Here is the proof:

C'mon guys, have some standards in your jounalism please

Commenter: David W. Wood
I think that your program is excellent.

I was especially impressed by your interview with Kenneth Rogoff. He was candid, well spoken, brilliant, and what he had to say was most helpful to me in planning and considering what I should do to try and survive this economic cataclysm.

Because of your show and Bill Moyers, I was moved to send another contribution to PBS. I wish that PBS could create another channel that would cover just economics and the stock markets as an alternative to CNBC. I am so tired of their shouting and yaking, vs your deliberate and thoughtful interviews. This is what we need, even if PBS has to fund it with subscriptions or other sources of non-biased funding.

Commenter: Shaft
There is no doubt that responsibility for the faltering world economic crisis lands squarely on our feet. Solution can be sped up to diagnose and perhaps heal the problem altogether. Those countries hugging US dollar as an insurance need to start releasing it now before its too late, and once the US economy is flooded with liquidity the intense pressure will start to deflate the baloon. The bank CEOs created the mess and they are the ones that are controlling the spigots of credit and the selling of the short sells in the US to speed up the recovery they messed up in the first place, and they should take some of the hits. We are as vulnerable as any other small third world nation and we seem to be playing games with peoples' lives and perhaps leaving the country at risk.

If America is to survive this financial calamity there must be strong measures administered to the financial institutes. This may sound harsh and uncalled for, but in times like this it's necessary to take few idiots out of the game than risk the whole country. Summon all the major banking and investment institutions and give them order to begin realising credits or else nationalize their institution. That kind of message will get through; if there is some hesitation take one of them down and the rest will do what they are told. After all these CEOs have been taking their huge salaries at our expense, and its time to start spitting or there will be angry justice in the streets.

This is unfortunate to say it, but its necessary to protect the 98% of the population.

Commenter: Ann Smith
U.S. Economy spends time in intensive care; but for 10 years?

Commenter: Steve Pakozdy - British Columbia, Canada
A very powerful and unsettling commentary on the current state of the global financial crisis.

Kenneth Rogoff tells it like it is, and, in the process, reveals major financial and social upheaval to come before we see light at the end of the tunnel.

Realizing that global leaders do not fully grasp the severity of this crisis yet will only serve to prolong it.

Thank-you Mr. Rogoff for helping me plan a more pro-active strategy to prepare myself for the long haul.

Steve Pakozdy
Nanaimo, B.C.

Commenter: Richard Heckler
How is it the large banks are looked upon as the culprits yet the small town banks,such as in Lawrence,Kansas, are not investigated to see how large a role they played in the housing debacle?

Lawrence,Kansas is pretending nothings changed and continue to build homes in a market that was over built
before the bubble burst. Doing the same thing in the retail market.

Will he government be asked to bail out Lawrence,Kansas?

Basic findings:

1. Lawrence is overbuilt in housing: Homes were built faster than popualtion growth supporting these homes. Excessive subdivisions caused an outmigration from older neighborhoods causing a severe loss of value, a loss of dwelling units, and a variety of other problems such as school closings.

2. Lawerence is overbuilt in retail: Stores were built faster than retail spending growth supporting these stores. This excessive growth has hurt the public and private investment in downtown redevelopment (e.g.: the empty $8 million parking garage, the empty Hobbs-Taylor space, etc.) and has caused deterioration and blight in existing shopping centers (e.g.: Tanger Mall, Food-for-Less, etc.)

3. Douglas County is overbuilt in manufacturing and warehousing; employment in these sectors is declining, not growing. Yet, the Chamber calls for more and more space in the false belief that more supply creates more demand.

4. Office space in Douglas County is relatively well balanced, but the market for office space is severely crippled by the excessive supply of unused retail space which is competing for office tenants.

Basic strategy:

Lawrence should adopt a policy of "cooling off" the pace of development. Note: This is not a moratoriam; it is a consicous effort to redirect growth to existing neighborhoods and districts where it can be beneficial.

Housing: The city should stop approving new subdivisions until the existing supply of surplus homes is eliminated. It should direct housing investment back into older neighborhoods so as to preserve and protect the existing public and private investment there.

Commercial space: The city should stop approving plans for new commercial space until the existing surplus is eliminated. It should direct investment into the preseration of the downtown and other existing commercial districts so as to preserve and protect the existing publid and private investment there.

Kirk McClure

Education Ph. D., City Planning, University of California, Berkeley,
Department of City and Regional Planning, 1985.
Concentrations in Housing Economics and Public Finance.

Master in City Planning, Massachusetts Institute of Technology,
Department of Urban Studies and Planning, 1978. Specialization in Housing Policy Analysis.

Bachelor of Arts, University of Kansas,
College of Liberal Arts and Sciences, 1974.
Special Major in Urban Studies.
Bachelor of Architecture, Graduated With Distinction

University of Kansas,
School of Architecture and Urban Design, 1973.

Commenter: Ron Hohn
For several months now I keep hearing that home prices have gone out of sight, some doubling in 'value' within 5 years, yet I have never heard anybody placing the blame anywhere.

I have seen real estate agents buy and sell homes, and every time there was a prospective seller/buyer, the price was assessed a thousand dollars or more higher than the last price in the area for similar homes. Flipping homes could have had a devastating effect on prices.

Why is no one talking about that?

Commenter: Fed Up
I thought Kenneth Rogoff gave the best, honest assessment of our current crisis I have heard. I do not believe any of the current proposals are going to fix this mess. Capitalism is a failed system and competition is stupid. Bottom line--is there enough to go around and are we willing to share equally? Humanity is proving itself to be the worst kind of animal.

Commenter: William Zaffer
I no longer will buy stocks, I will save more in my green bank and community bank, not shop at Wal Marts or big box stores that carry nothing but foreign made products and will look to buy American made products.

Commenter: Francoise Lindeman
Very clear alarm signal !
I totally agree with Ken Rogoff's anticipations.
And the only way to really get out of this crisis is to recognize it has mostly been brought by IDOLATRY of PROFIT and EGO and BLINDNESS to the Fate of Others (to your own group ) --The financial collapse a only a very exacerbated caricature of this set of mind.
And since the financial institutions have led us to this this collapse, (with our mute or active assistance), it has to be fixed or RETHOUGHT first. And RETHOUGHT in a COOPERATIVE FORM and with attention to justice and cooperation
This is the expectation people have put into Obama, their Hope. So we have to watch, and your OBAMA watch is a great great tool for democracy.
And the world is watching!

And we need to support this kind of investigative journalism NOW is promoting inside PBS and with PBS.

Thank you!

Commenter: David Airey
Thank you David Brancaccio for that sobering take on the economic situation. Painful as it was to hear what Prof. Rogoff had to say, at least I feel like I come away with more realistic expectations for the next few years.

What I'd really like to see you tackle on 'Now' is the opportunity that this economic disaster presents to completely re-jig the economy in a way that could create a much brighter and more sustainable future for everyone, not just the economically privileged of the world. You alluded to this at the end of your interview with Rogoff, but I think this possbility needs to be seen as more than that; it needs to be seen as a necessity if humankind is to have much of a future at all!

Commenter: Ann B.
Hmmm...bankrupcy for most of the large banks. Isn't that what Sen Shelby said from the get go?

Previewing the Superpower Summit

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