Better than Stephanopoulos w/Austan Goolsbee: Berkowitz w/Prof. Luigi Zingales, on Cable and the web

Professor Luigi Zingales: You know, I think that if you are Greece, and you are dramatically capping government expenditure because you have to fix the budget, will this decrease GDP? Absolutely. If that is Keynesian economics, Keynesian economics is right. But, if you think you can bring prosperity by spending more, Greece would be the richest country in the world.

Jeff Berkowitz: So, Keynesian multipliers are not really true, they don’t really work?

Professor Luigi Zingales: On the downside, they work extremely well in the short term. But, not in the long term.

Jeff Berkowitz: In the long term, it’s just real factors, right?

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This week's  suburban edition of “Public Affairs,” features Luigi Zingales, University of Chicago Booth School of Business professor and author of the best seller: A Capitalism for the People: recapturing the Lost Genius of American Prosperity, a book you can find at one of our underwriters-- the Book Stall in Winnetka.  Watch our show with Prof. Zingales here

In a show taped on November 11,  Professor Zingales  debates and discusses with show host Jeff Berkowitz whether the U. S. economy has changed from a meritocracy to a crony capitalism state and if so, how can the economy be fixed; what caused the crash of 2008?  were Obama, McCain and Chairman Bernanke all supporting the wrong economic policies; has America lost its entrepreneurial spirit and much, much more.  

The show  airs from 8:30 pm to 9:00 pm tonight on Comcast Cable

on Ch. 19 in Buffalo Grove, Elk Grove Village, Hoffman Estates, parts of Inverness, Lincolnwood, Morton Grove, Niles, Northfield, Palatine, Rolling Meadows and Wilmette.and

on Ch. 35 in Arlington Heights, Bartlett, Glenview, Golf, Des Plaines, Hanover Park, Mt. Prospect, Northbrook, Park Ridge, Prospect Heights, Schaumburg, Skokie, Streamwood and Wheeling.

The "Public Affairs," show with Professor Zingales is posted here  

The show will also air in Rockford next Thursday night  (Dec. 6) at 8:30 pm on Cable Ch. 17

The show with Luigi Zingales will also air throughout the City of Chicago this coming Monday night (Dec. 3)  at 8:30 pm on Cable Ch. 21 [CANTV].

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Jeff Berkowitz: ...The book is called, “A Capitalism for the people: Recapturing the lost genius of American Prosperity. You read this book [by Professor Luigi Zingales] and you’ll find out what went wrong [in the Crash of 2008], as we’re summarizing here, what the solutions are and maybe how America could change its trajectory and go back to becoming the great country that it once was. Am I overstating it?

Professor Luigi Zingales: No, absolutely not.

Jeff Berkowitz: …What would happen? That third way [that you recommended]. Manage bankruptcies. Don’t bail out AIG. Don’t bail out Lehman Bros., but manage it and creditors should incur costs.

Professor Luigi Zingales: Should incur losses. Absolutely.

Jeff Berkowitz: Because they took bad risks and they should be—if you’re taught that you are going to pay for those bad risks—in the future, you won’t take such bad risks.

Professor Luigi Zingales: Absolutely, so that capitalism without bankruptcy is like religion without sin.

Jeff Berkowitz: And, deregulation didn’t cause this problem, did it?

Professor Luigi Zingales: I think bad regulation caused it.

Jeff Berkowitz: and the bad regulation was?

Professor Luigi Zingales: I just mentioned one about –

Jeff Berkowitz: Housing; the overinvestment in housing.

Professor Luigi Zingales: The way rating was used to determine what banks-

Jeff Berkowitz: [The 2008 Crash] had nothing to do with the Bush Tax cuts?

Professor Luigi Zingales: I would say no- nothing to do with the Bush Tax Cuts.

Jeff Berkowitz: Obama is wrong when he says that?

Professor Luigi Zingales: I think so.

Jeff Berkowitz: Austan Goolsbee, to the extent he says that and supports that, he’s –

Professor Luigi Zingales: I’ve never heard him say that.

Jeff Berkowitz: Really, you don’t think so? Austan, we’d love to have you on. It would be nice to find out what you really think…And, you and Austan would get along. It’s not a Democratic or Republican thing. We just said. There was buy in here by Bush- George W.,

Professor Luigi Zingales: Oh, absolutely.

Jeff Berkowitz: buy in by Obama; by McCain. The whole lot of them. Do you think Barack Obama ever took a course in economics? I mean he was here for six shows- I never really asked him. Do you think maybe he never really took a course in economics?...I have to know from you—Keynesian economics says-- ok, what’s happening now? We’ve had this really high unemployment, one of the worst recoveries ever, why?

Professor Luigi Zingales: You know, I think that if you are Greece, and you are dramatically capping government expenditure because you have to fix the budget, will this decrease GDP? Absolutely. If that is Keynesian economics, Keynesian economics is right. But, if you think you can bring prosperity by spending more, Greece would be the richest country in the world.

Jeff Berkowitz: So, Keynesian multipliers are not really true, they don’t really work?

Professor Luigi Zingales: On the downside, they work extremely well in the short term. But, not in the long term.

Jeff Berkowitz: In the long term, it’s just real factors, right?

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From Public Affairs with Jeff Berkowitz, featuring Luigi Zingales, recorded on Nov. 11, 2012. 

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