Countdown with Keith Olbermann, November 25, 2008

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OLBERMANN: Jumpstart the economy, eliminate programs we don`t need, and reduce the deficit. Our fourth story on the COUNTDOWN: We might, indeed, only have one president at a time, but the new guy is evidently capable of having more than one news conference a year and more than one economic goal at a time. Every night until the inauguration of the president, we are asking the question on the most urgent issue of the day: What do with do now? Today, more details from President-elect Obama on how he plans to fix the economy while attempting to shave the budget and reduce the deficit at the very same time. President-elect Obama announcing that Peter Orszag will be his budget director, a job he currently holds for Congress, a job for which he would seem to be uniquely qualified.


OBAMA: Peter doesn`t need a map to tell him where the bodies are buried in the federal budget. He knows what works and what doesn`t, what`s worthy of our precious tax dollars and what is not.


OLBERMANN: With his budget director`s help, the president-elect pledging to make budget restraint a priority in his administration, but only after the economic recovery is well-underway first.


OBAMA: Budget reform is not an option. It`s a necessity. We are going to have to jumpstart the economy and there`s consensus that that requires a bold plan to make the investments in the future. But we have to make sure that those investments are wise. We have to make sure that ware not wasting money in every area.


OLBERMANN: Instead of as a big government or a small government, the president-elect preferring that his government be thought of as a "smart government."


OBAMA: I think what the American people want more than anything is just commonsense, smart government. They don`t want ideology. They don`t want bickering. They don`t want sniping. They want action and they want effectiveness.


OLBERMANN: In order to achieve his ambitious, theoretically contradictory agenda, Mr. Obama promising to consult with Republicans along the way, never mind the massive amount of political capital he`s seemed to have accumulated according to the Bush standard.


OBAMA: I don`t think that there`s any question that we have a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix that we`re in. But I won 53 percent of the vote. That means 46 percent or 47 percent of the country voted for John McCain. And it`s important as I said, on election night, that we enter into the new administration with a sense of humility.


OLBERMANN: Let`s turn now to Paul Krugman, professor of economics at Princeton University, op-ed columnist at the "New York Times," author of the new book, "The Return of Depression Economics and The Crisis of 2008," to out early next month, since he was last kind enough to join us, announced as winner of the 2008 Nobel Prize for economics. Dr. Krugman, congratulations, belatedly, and thanks for your time tonight.


OLBERMANN: The implication of Mr. Orszag and buried bodies in the budget, that you can work a very minor, perhaps, economic miracle in trimming the fat, is that true? Is there validity to it?

KRUGMAN: It depends. You know, the old waste fraud and abuse thing is everybody who is serious knows it`s not a big deal. I mean, of course, there`s wasted dollars, there`s bureaucrats doing nothing much on salary, but that`s not a big thing, that`s trivial. What Peter Orszag has done -- he`s, you know, a great choice for the job. He`s talked about the big things, things like Medicare spending a lot of money on treatments that don`t actually improve people`s health, huge disparities on what Medicare spends in different parts of the country. There are things like overpaying the drug companies for the Medicare drug program. I`m hoping that an Obama administration, together with Congress, can actually start bargaining for fairer prices on those drugs. So, there`s a bunch of stuff. Now, it`s nowhere close to saving the amount of money that`s going to be needed, you know, to ultimately pay for all the things we`re doing to rescue the economy right now.

OLBERMANN: There was a poll from ABC News today that suggested that 67 percent of Americans like the way Obama is handling the transition. That has got to be, in part, about his high profile during it. Three days in a row, there will be new press conferences about this subject and, obviously, it`s got to be in part about putting his face and neck out there in terms of the economy. Is he right to do it that way and this way? Is there any other option?

KRUGMAN: I don`t think so. I mean, we actually -- the economy is in terrible shape. We`re probably losing, you know, 300,000 jobs a month or so at the moment. So, things are falling apart pretty fast. Confidence is falling apart pretty fast. It would be nice if we could have collaborative work between the outgoing administration and the incoming administration. We`re not actually going to get that. So, the best that you can do on the economy is, at least, to convince people that help is on the way. You know, the cavalry is coming. Look at these great guys I got. Here`s my team. We have -- we`re putting a plan together. So, no, I think, in some ways, the management of economic policy is already in Obama`s hands and he`s got to do it now.

OLBERMANN: In addition to the original $700 billion in the bailout, today it appeared that Secretary Paulson was trying to pull another $600 billion from the Fed for Fannie, Freddie, Ginnie, is there the prospect still here that the lame duck administration can still do a lot of damage to the economy in the next 56 days?

KRUGMAN: There is, although, this one is actually, this is just a -- there`s nothing wrong with this. You know, we own Fannie and Freddie. They`ve been nationalized. Effectively, the U.S. government is now having the Federal Reserve buy up the debt of a piece of the U.S. government. It`s fancy footwork. It`s crazy that they haven`t just said, look, this stuff is guaranteed by the full faith and credit of the taxpayers. So, this is actually a good move, just done in a funny way. I have no problem with that. There`s also another $200 billion for things like to credit card debt which is much dicer but these are not the moves that worry me. I just worry about the just lack of direction, the sort of chaos, and the fact that the deals for private sector for places like Citigroup don`t look that good.

OLBERMANN: And, has this -- I asked this question last night and let me rephrase it -- this $700 billion amounted to -- we sort of left it on a table outside the Treasury Department and said "come and get it"?

KRUGMAN: It`s not quite that bad. I mean, it`s not been invested all that well but it`s not all that badly, either. You know -- it`s not $700 billion gone. First of all, actually only about $250 billion has been laid out so far. So, it`s not like the whole thing. Look, this could have been done much better and it`s really bad that it`s being mishandled. But the main thing I`m worried about is not what they`re doing but what they`re not doing. The fact that we don`t have a stimulus program getting ready, that we don`t have a better coordinated bank financial system rescue getting ready. It`s just -- you know, it`s like it`s -- well, as I`ve written it`s 1932, Hoover is still in the White House, we`re waiting for Roosevelt to arrive, and meanwhile, the banks are failing.

OLBERMANN: Yes, you can`t yell at the calendar to hurry up.


OLBERMANN: Last question here. You and the other Nobel winners yesterday visited the White House. Was there anything in that moment there with the president, any chance that he revealed his plans for the economy in his last weeks in office? If not, was it difficult to shake that hand?

KRUGMAN: Oh, you know what are you going to do? My wife made small talk with him about her childhood in Texas. This is not a moment to try and change policy, you know.

OLBERMANN: Well, I`m sure the thought crossed your mind. Nobel Prize winner.

KRUGMAN: I just want him to know my nickname.


OLBERMANN: He`s out of the nickname business, I suppose.


OLBERMANN: Nobel Prize winner, Paul Krugman, also author, as we mentioned, of the upcoming book, "The Return of Depression Economics and The Crisis of 2008." Again, great thanks for your time tonight, sir.

KRUGMAN: Thanks a lot.

OLBERMANN: Here`s a stimulus package: The annual promise of the jetpacks that they would soon be in service. This is the what -- 48th anniversary of the first promise. This guy flies over something and lands somewhere else. And what do you mean they wired Ann Coulter`s jaw shut? Shouldn`t she have auctioned this privilege off for charity? You are watching COUNTDOWN on MSNBC.

Originally broadcast, 11.25.08