before. at last slow down in that trend. private sector is carrying things here, no question. but the private sector slowing down a bit too, ali. >> christine, something that you and i study very carefully, this is a consumer-driven economy, so we study retail sales. the retail sales for the last month came out this week, and they were exceptionally strong. much stronger than economists were expecting. so why did we see losses in retail jobs? >> it's so interesting, because you saw 33,800 retail jobs lost in the month, and that was a little bit of surprise to people. the only place you saw strength in retail was home and garden centers, surprise, surprise, because of all of the great weather. so even though you've seen some strength from the consumer lately, this is something, overall, that might be a little bit of a concern. we did see some strength, quickly, i want to show you in manufacturing, ali. 37,000 jobs created in manufacturing. that's a trend we've seen kind of picking up. i don't know how much it eats into all of those jobs lost in manufacturing since the '80s, really, but that's something that bear was watching. finally, i know you love this. this is a political number in an election year, no question, right? so you look at the overall trend. the trend of job creation. here's that big jobs -- this is the financial crisis, right here. 8.8 million jobs lost from the peak of labor market to the trough. here's census, remember, stimulus. wow, we thought we were coming back, and faltered, and then this is what the -- this is the slow, steady, some would say unremarkable recovery. not as strong as a recovery as you'd like to see. and now a little bit of a faltering at the end of it. >> and at 120,000 jobs, most people say, we need closer to 300,000 jobs a month to get back to where we were before the economic crisis. so bottom line is, this is a glass a third full, would you say? >> i would say so, but i want to know why. i also want to know. look, you've got seven reports, ali, until the election. all these numbers have noise in them. sometimes they go, sometimes they go down. in fact, a few people were telling me this week, we're due for a disappointment. because jobs have been -- it has been steady. we're due for a little bit of a disappointment. i mean, you got it. i think you got that little bit of a disappointment, but we don't know what's going to happen next month. >> your job and mine is to give you the what, but your question is why. let's bring in ken rogoff, the former chief economist with the international monetary fund. ken, we've laid out the numbers, you've looked at them. why is hiring slowing down when so many other economic indicators indicate strengthening in this economy? >> ali, honestly, i think it's hard to tell from a month's number, because you're right. overall, things are not so bad. they show a modest recovery. this is really tepid. i think you have to look at the longer term here, where the arc of the economy has been pointing to moderate growth. people are getting a little hyper excited. >> right. >> 200,000, now it's going to go to 300,000, 400,000. well, you know, it's probably going to continue at this modest rate. let's hope that nothing shakes it up. >> that's a good observation that we've had from a number of people who have said, guys, this is not 6% gdp growth. this is 2%. hopefully we get to 3%. so when people say we'd like to see 300,000, 400,000, 500,000 jobs created a month, that might be creating expectations that can't be met. diane swonk is a chief economist. diane, one thing christine pointed out is that the massive public sector cuts seem to be over with. the private sector has been leading this jobs recovery. so what is it that's holding us back from, i don't know, i'm inventing a number here, 300,000 jobs added every month. what needs to happen? >> well, you know, frankly, this is ken's area of expertise. we're still in the wake of a financial crisis, and we've still got a lot of things to heal. a very uneven recovery out there. i think this month's number also is a little bit reflective. we got a little extra boost from unseasonably warm winter weather over the last several months. and there was some payback. the retailers that didn't hire this month actually already hired, because they were selling spring stuff in january and february, instead of march. so some of this is a payback to the earlier gains we saw and the earlier gains were extra hyped, because of that unseasonably warm weather. but the reality is, we still have a subpar recovery. we're talking about growing around 2% in the first quarter, a little above that during the remainder of the year. that's just not fast enough to create jobs quick enough to bring down the unemployment rate in a way that's substantiative. and it's something that ben bernanke has brought up as well, because he's now worrying about, we've got 38 months running above 8% unemployment. that ties the 1980s and the cumulative effects of that are really starting to show. >> and you're echoing ken's idea that this is not -- these numbers that we have, while we may be surprised that we've slowed down to 120,000, that may be more in keeping with the economic growth numbers that we see. stephen moore is a an editorial writer with "the wall street journa journal". steven, what's your sense of these numbers? if it wasn't an election year, if you had not heard mitt romney, he's already called this a troubling report. other republicans were quick to point out that president obama's policies are holding the u.s. back. make the case, as simply as possible, as to what president obama and this administration could be doing differently that would result, in your opinion, in more jobs being created? >> well, let me first start to say that obviously this is a bit of a disappointing report. you know, i debate robert reich on your channel all the time, and he's told me for years, ali, that you need 150,000 jobs a month, just to keep pace with labor force growth. so we foal short of that. and i'm very worried, by the way, i'd love the others take on this. i think the most distressing statistic we've seen on jobs over the last three or four years is the decline of the labor force participation rate. which means that people have kind of dropped out. these discouraged workers are still out there. that means that you don't get the outpit and oomph in the economy that you need. look, the unemployment rate today politically doesn't matter. when matters is what the unemployment rate is in september, october, and november so politically, you can read too much into this. if i were president obama's adviser, which i'm not, i would say maybe we should cancel the big tax increase. i think the economy's way too fragile right now to take that. i think that we should have a much more aggressive energy policy. and the one thing to think about, let me add one other policy variable. we have had this kind of crack cocaine of easy money now for three years. and it doesn't seem to be providing the real revival of the economy that most of us would expect and hope. you know, we're three years now into a recovery. if you compare this with past recoveries, it's just much lower than we should expect. we should be expecting 4% or 5% growth in this phase of a recovery. we're not getting it. >> well, i want to take that up with our other two guests. how much of this could have been worse if we didn't have that, as you call it, the crack cocaine of cheap money, where would we be, but i want to take a break before we get to that. so diane and ken, think about your answer to that. up next, two threats outside of america's borders that could threaten this fragile recovery. and believe it or not, a bipartisan effort in washington designed to help start-ups and small businesses. >> if these entrepreneurs are willing to keep giving their all, the least washington can do is to help them succeed. >> republican eric cantor was there when the president signed the bill and aol cofounder steve case was there as well. it's called the jobs act, jump start our business start-ups. he's going to talk to me. steve case is going to talk to me about what this means for innovation in america and how it actually creates jobs. that's all coming up on "your $$$$$." 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welcome back to "your $$$$$." there are external factors that could have an effect on this recovery. while the jobs picture continues to be recovering here in the united states, that is not the case in europe. take a look at the 17 countries that use the euro. unemployment in that area is at the highest level since 1999. take a look at spain, right down here. 23.6%. greece, the one that's been in the news all the time, 21% unemployment. portugal back here, 15% unemployment, and ireland is at 14.6% unemployment. now, the three largest economies in the eu are faring a little bit better. france has just 10% unemployment. britain, around 8%, and germany, only 5.7% unemployment. the treasury secretary, timothy geithner, said this week that economic fallout from the debt crisis in europe is a threat to the recovery here in the united states. but that's not the only threat. in fact, one gets the feeling that europe is starting to get its act together. oil markets are spooked by geopolitical tension in the persian gulf, as the obama administration is moving to tighten sanctions over iran and its nuclear program. now, take a look at this. this is the strait of hormuz, okay? that's iran above it. now, iran is a notable oil producer. the west is no longer buying oil from iran, but china is and india is, but this is the more important part. the strait of hormuz is an important straight through which one fifth of the world's oil passes. iran has from time to time threatened that anything goes wrong, if anyone attacks iran, if israel or the u.s. attack iran, they may close off that strait or hormuz. americans are already paying 20% more at the pump for gasoline this year. let's bring the panel back in. ken rogoff joins us again. ken, when it comes to this recovery, what is the bigger threat? is it oil prices? is it europe? is it something else? is it neither? >> i think europe is probably the more uncertain threat. i'd have thrown in china, by the way. that's the huge economy slowing down. but the big picture is that there's still a lot of debt, household debt, other debt in our economy, that's going to take a long time to come down. and there are a lot of areas where wages are still too high. steven had said the fed has been putting the economy on crack cocaine, it's too easy a monetary policy. i don't want to say that ben bernanke should be passing out candy in a schoolyard, but i actually think that a bit more inflation is what we need, that it's not been too bold, they've been too timid. >> very interesting. diane, let's talk about what people think is the big threat. a recent cnn opinion research corporation poll found that 71% of americans say rising gas prices have caused them financial hardship. now, forget a recovery. is there a tipping point for gas prices? and we've seen this in the past. is it $4.50 a gallon? is it $5 a gallon, where americans really cut back on spending and send the economy reeling, because they're spending more money on gas, money that they would have otherwise been spending at restaurants or making purchases. >> well, actually, i think that gets into the issues that we talked about earlier, the unseasonably warm winter weather. we had extremely low natural gas prices and low heating bills as prices at the pump went up, which was completely deferent than 2008. and that allowed americans to keep spending, and filling their tanks. what i worry about going forward is the crimp that higher prices at the pump could play as we have to turn on our air-conditioners, which are much more expensive through electricity and pay for that at the same time we're paying for higher gas prices. so there's a lot of moving parts. and i do underscore as well, ken has talked about the fed maybe not doing enough, and that is something the national association for business economics survey is in complete approval with what the fed has done in setting expectations on the fed funds rate as well, on the majority of us surveyed, which is almost 300 economists, actually said, we approve and think that the fed is doing the right things, because committing to reflating an economy like this is exactly what ken wrote the book on, is what you need to do at this stage of the game. >> so stephen moore, you got your answer. our two economists think that those interest rates should remain low for a while. put that aside for a second, though. if the recovery is fragile, i think we all agree on that, there was some sense that it was moving on its own, but some things can set it back, who's got a leg up here? conservatives have spent the better part of the last few years saying that president obama couldn't get jobs going in america. and generally speaking, he's had jobs going in america. we've had a bit of a setback this month. what do conservatives do? which party has a leg up? >> this is not a hard election to predict in my opinion. when people go into the voting booth, they're going to ask themselves one question, can we afford four more years of these policies? if they feel like jobs are coming back, barack obama will be re-elected. if they have a real sense of unease and a continued sense of panic about their own finances and about gas prices and about jobs, then i think mitt romney will win. but, look, i just have to say that, let's say that the economy weakens and i think it's going to -- i think this is just a blip. i think we're going to see some better jobs numbers in the months to come. but if the economy doesn't get better, you have to ask yourself the question, ali, what do we do next? what's plan "b." we've had record amounts of keynesian debt. we're borrowing $1 trillion a year. we have record low interest rates, and all this money being deluged into the economy by the fed. and it's almost like the keynesians are out of ammunition. and, look, i respect ken rogoff, i think he's one of great economists in the country. but ken, the problem is, if we have what you call more inflation, you're going to see the gas price go to $5 or $6 a gallon. you'll see the gold price go $2,000. i don't see how that's going to really help this economy improve. it sounds to me more like what happened in the 1970s. >> let's let ken get a word in there. ken, what do you think of that? >> well, certainly, it's true that it would affect oil prices, but as i said, housing prices in many parts of the country are too high pinpoint takes a long time for the price to ground down. inflation's another way to inflate its value. same thing with wages in many parts of the economy. they're still too high. that's why there's unemployment. and there's a lot of debt. so, yeah, it's not a perfect instrument, but this is a once-in-75-years problem. i don't really see another way out except for grinding it really slowly, you could take some edge off of it with inflation. diane, stephen, thanks for joining us. ken, stick around. that's because a former top economic to president bush is quoting you, ken rogoff, in his "wall street journal" op-ed this weekend, stating that we're in the worst economic recovery of all time. plus, if the can kennedys equaled camelot, why is mitt romney's wealth a top target in this election? 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before the break, i asked economist ken rogoff to stick around, because he was mentioned in a "wall street journal" op-ed this week that makes that claim. it was written by ed lazear, he's the storm economic adviser to president george w. bush. now, christine romans rejoins us as well. she had the chance to talk to ed lazear this week. christine? >> ali, we hear time and time again from the obama administration and other economists that it's this administration that stopped the economy from going into a depression. but lazear argues it's president obama's policies, some of them that are making this in his words, the worst recovery in history. >> this hardly kept us from the great depression. what it did was at best, it softened the blow. but the big problem, at least to my mind, is what we've done by engaging in those policies has created a situation where we have very serious long-term debt issues right now, and to my mind, those are the most important impediments to economic growth as we look to the future. >> all right. let's ask ken rogoff. is this the worst recovery ever, ken? >> well, it's a matter of semantics, but the great depression was worse. i mean, it's really hard to compare. i mean, sure, there are a few good years in the early '30s, but we got to 20% unemployment first. it was bad, but here we got to 10. it was really staggering, and it didn't come back, it wasn't really until world war ii that things really started to improve. and this is the word recovery since world war ii. it is typical of a deep financial crisis, but the great depression, that was another animal. >> you point out that the recovery from financial crises are slower from other kinds of crises. and you were quoted this week by both timothy geithner and ed lazear, who worked for bush. your research is what all sides of the economic schoolings of thought use to the talk about this recovery, ken. >> well, i think we -- my work with carmen reinhart, we certainly show that recoveries are very slow after a financial crisis. i think where policies really matter is affecting the ark of the economy in the longer run. how are we competing with china? where are the jobs going to run? kids born today will have a 25% o