diane swonk, old friend, chief of messere, aux financial. we're talking about the middle class. who represents the middle class in this country. the democrats are trying to make the point with speeches by president obama in the last couple of weeks. democrats are the party of the middle class. republicans are the party of the rich. republicans obviously are struggling with that themselves. david, what's your sense of how republicans are thinksing themselves and who in this country represents the vast majority of people, the middle class. >> i don't think anybody is doing a very good job of it of the president gave a speech in kansas a week ago in which he tried to stake out this ground. he gave a very good assessment of problems facing middle class americans. his descriptions were really weak. the president's main idea seems to be to have higher taxes on those who earn a lot and to use that money to expand public employment and hope more public employment will create a broader government sector middle class. that's what tony blair tried, drove up unemployment in some parts of the country 50% of the labor mark. they set the stage foris britaig now. >> on the flip side, one of the things diane swonk we talk about in politics we cater to short answers, easy answers, simplistic answers. what would happen if we put a bunch of economists to fix this. >> take about 20 minutes and 10 minutes saying held okay. he's exactly right. i gave a speech and quoted bob dillon. the answer is blowing in the wind. the an is right in front of us. we know what the answers are. a lot have consensus on it. dave talking about you can't lower taxes, create middle class with government spending. we have a framework of a plan in the simpson bowles. what most don't realize $4 electrical in 10 years with shortfall we need $5 trillion over 10 years. the longer we kick this can down the road the more problems we're creating for ourselves. >> we don't kick the can down the road, someone has to pay. it costs people. terry, you write about this. you're trying to make the connection between economic concepts and viewers wondering how it affects them. they will cast ballots based on discussions about taxation in many cases. when we don't kick the can down the road, what does that mean to us? >> means we face reality. the irony, as they come together in washington over the payroll tax cut what you have on both sides is a general acknowledgement people do better when they have more money in their pocket of the government doesn't do well spending our money. they define poverty at about $45,000 and above. that's a very -- many more people are closer to poverty than we acknowledge if that's the definition. if those people get their own money to spend, it works better than the government spending it. we have the last four years and $3 trillion of government spending to prove that doesn't really jump-start an economy. if it works for middle income people it ought to work for upper income people to keep more of their money whether they save it or invest it. that's what we're facing now. >> there's a lot of other issues. you can back load a lot of pain. if we know a road map there has to be tax reform. our tax code is a mess. it does mean more revenues, spreading revenues across higher income households and higher upper income households and some milling income households. that's an issue we have to get rid of deductions. corporate tax code is an absolute mess. these things can be dealt w the problem a lot of lobbyists that stop it from happening. it's got to be revenues and spending. it can't be right away. if we deal now we can back load it. american public and corporations if we know where the potholes are we can brace ourselves. >> this remarkable uncertainty, david, has been the problem for the next couple of years. we don't know what the next thin is. if we tell people what the next thing is, it might help individuals and companies plan. part of the problem we continue to get back into taking positions as political parties that seem to cater to particular constituencies. as a conservative, david, what is the solution out there that doesn't necessarily pander to a specific constituency that will get somebody the nomination for the republican presidency but at the same time will actually may solve some problems for the next five and ten years. >> you can't solve the problem if you keep asking the wrong question. >> right. >> the political problem, fiscal policy, government finances. the issue is economic policies not fiscal policy. both suffering from high blood pressure, the equivalent of the deficit problem and has been hit by a bus, which is the current downturn. everyone says no sense treating the trauma of the bus hit until we deal with the high blood pressure. it's backwards. the world is happy to lend united states money for 10 years at 2%. i say keep borrowing that money as much as you can. use that money to address the immediate trauma of a country in crisis, incomes collapse. it's not that hard to solve but do it later. solving it now to use one more analogy, the children's riddle, how do you get down off an elephant, you don't, you get down from a duck. we have to come up with useful answers. >> i agree with a lot of that, but back loading, putting america's house in order over 10 years not taking the pain up front is exactly what we need and -- >> is there any evidence for that proposition? all the evidence i see is exactly the contrary. the uncertainty holding back the american economy that doesn't make sense to me. >> how many corporations have you talked to? i talk to companies with trillions on balance sheets and they are holding back, hesitation, that's a big issue. >> there's surveys they ask business owners why are you not investing. uncertainty is not the reason they give. weak sales is the reason they give. >> in large corporate america -- i is agree. if you're talking small business -- >> i'm also -- >> systematic way that's not the answer under the circumstances. >> no, it is a systematic way. less a lot of surveys out there that say uncertainty is the biggest issue, we have a crisis in confidence. growth i agree with you at the end of the day you cannot do anything without more robust growth. that is the crux of the issue and we agree 100%. i do think we saw in august with the keystone cops playing politics that really caused, along with the downgrade of our debt, and european debt situation all come together, that caused a hesitation. >> worried that type of uncertainty more so than regulatory -- >> i'm not talking regulatory. >> i think we all agree, david, you made this point. we all know we've got remarkably low interest rates. the u.s. government can borrow money at a low rate, which is why deficit spending or borrowing could be a good solution in the short-term for the united states. where that changes is with europe. we're tinkering around the edges, very concerned about what politicians are going to do in washington when in fact what's going on across the pond may be a greater concern. i want to take a break and come back with this great panel and discuss what role america should do to help europe and the world out of a global recession. a special edition from cme right here in chicago. 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and maybe it's not funding. >> we can't bail them out. that is not our purview, not our legal purview, not a political stomach, no are should there be. we can't bail out europe. if euro explodes it's an event larger than lehman for us. that's why it matters. we learned in 2008 there's no way to hide. unless you all have your oars in the water at the same time. being part of the solution isn't necessarily bailing out europe of there's no reason to bail out european banks. however, our banks are exposed, underwritten cds. money markets in the u.s. very exposed to european banks. this is what went down on the height of the congress between september 14th, 21st 2008 and froze everything in the united states. >> by the way when american companies couldn't get credit because there was a global freeze they fired people. when people ask what does this mean, you -- >> we're not an island. that said, we cannot bail out europe. >> he has said, has he not, he would stand behind central banks of europe. >> he has. >> let's go back to something david frum brought up for our own problems in america, it cost us nothing to borrow money. david says at least shore up our own finances in our own situation we should use that money. ron paul, running for president of the united states, feels entirely opposite from the way you do. listen to what he said. >> we've bailed out just about everybody so far when it comes to the banks and corporations. now it's europe. we're getting ready to bail out greece and italy and spain and all of europe. it can't be done. it's unsustainable. we've already been downgraded once. we're on the verge of having our credit rating downgraded again. >> so david, before we get too carried with this, the fact is there isn't an explicit conversation about america taking money and sending it to europe what role should america -- what should we be considering to make sure europe doesn't fail and we have the problem in the united states. >> hit the mute button when listening to ron paul. he's entitled to zero respect. if you leave the sound on, the idea it's more sustainable to have a global recession than help europe. grandpa ron paul may welcome a depression when people go back to selling apples for a nickel but no one's point of view. i would be in favor of a bailout if it was necessary. when christine lagarde says the world must help, that is only true if the european institutions refuse to do the job there. there's no necessity for american support of fiscal bailout if the europeans will be a monetary authority. the idea they can't create euros. they can create an infinity number of euros. they are the euro master. how many do you want. >> germany won't do it. >> who elected germans to tell the central bank what to do. >> believe me, it is -- i agree, david -- >> the core of this crisis. >> all right, guys. thanks for the great conversation. terri savage, great to see you, personal finance editor of chicago "time." >> dine swonk chief financial officer from mesirow, david frum from washington. thanks always for your great insight. we'll be back in a minute, talk more about the middle class. who exactly is the middle class. who is the 1%? 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[ female announcer ] from neutrogena® naturals. welcome back to special edition of "your $$$$$." i'm ali velshi at cme in chicago, chicago mercantile exchange. the old floor of the chicago board of trade. you can see traders trading all sorts of things, commodities, treasuries, all sorts of things that matter to your life and affect your money actually get traded on this floor. christine romans with me just in the room next door in the agriculture pit probably trading hogs. this is where she got her start. a little while we'll talk about what goes on here and why it's important to you. right now we want to talk about something that's a concern to everybody watching us. who is watching middle class of the battle to be the champion of the middle class is under way. president obama made a number of comments recently, this latest one in kansas where he really claims the mantle of the champion of the middle class in this election cycle. here it is in his words. >> after all that's happened, after the worst economic crisis since the great depression, they want to return to the same practices that got us into this mess. in fact, they want to go back to the same policies that stacked the deck against middle class americans for way too many years. >> okay. if you're in the middle class in this country you listen to that, you think president obama is your money. the democrats are your people and republicans are going to go back to the same practices that got us all into the mess we are in today. guess what, if you listen to republicans, similar message. let's talk to will cain and pete dominick, the host of sirius xm standup. will cain a cnn contributor. will, how do you answer that charge? this is what we're bog to be hearing month after month. republicans saying it's the democrats who kept us in this mess. democrats saying republicans got us into this mess. what do you say? >> i reject the battle trying to find who is the champion of the middle class. i reject separating us in class, who is doing better, you're pandering even to a group as large as the middle class. what i would do is position the debate like this. position republicans as defenders of a system, a system that has been the beneficiary for every single one of americans, every class, stop asking how are you doing compared to someone else but how are you doing. you would defend a system that moved more people out of poverty in the history of man than any system we've invented. >> that's an interesting way to think about it because we do set ourselves up in society, at work, in sports, everything we do where we compare ourselves to someone else or someone in a different class. one thing we've seen with the protest is this creation of a battle between us and them, 99% versus 1%. pete dominick, let me bring you into this battle. middle class is a strange creature in america. other countries you have rich, working poor and middle class aspirational. they have moved out of the working poor over the generations and try to get into the rich. in america with the moniker of 99%, it's a different beast. >> absolutely. i think ali it depends how you define middle class, $60,000 to $200,000 define themselves to middle class, prideful poor to the modest wealthy. but they are all part of the 99% in terms of the people that d