market anymore. all in all, it wasn't a big deal for the actual stock market. in the rest of the world, markets are in an upheaval. in china markets have been in a three-week crash losing a third of their value, or $3 trillion. we'll get to that but first i want to turn to a different part of the world: greece. the greek government is trying to scramble back from the brink after defaulting last week on a major debt payment of the imf. banks have been closed for the last two weeks and people have been limited to $60 a day from the atms. they are asking their fellow european members for more loans over what would be the third bailout since the greek debt crisis back in 2010. they've already received two bailouts in the last five years. the country has not recovered. unemployment is 26% and 51% for people under the age of 25. now greece is asking for a new bailout and restructuring of its debt. it costs another 70 billion euro. its proposal includes several austerity measures including tax increases and cut to pensions. the greek people just voted against a referendum a week ago today. now, to begin the 11th hour negotiations to save greece from entire financial collapse the finance ministers have been huddled in brussels trying to work out a deal based on greece's proposal but there is a lot of skepticism about greece's ability to pull itself out of the hole even with another big bailout. ahead of yesterday's meeting, the eurozone's top official says there are many concerns about, quote, the content of the proposals, but also on the even more difficult issue of trust. how can we really expect this government to implement what it's now promising? without a deal by the time greece's next loan payment comes due on july 20 greece could be out of the eurozone and out of cash. joining me now in new york is lisa cook associate professor of economics and international relations at michigan state university, peter goodman, editor and chief for the international business times, and author of "the coming collapse of china," which will be coming in our next block. let's stay on greece for just one second. let's ask this basic question that seems a little bit in debate. did greece default on its debts? >> yes, greece did default on its debt. the imf's technical terms, they're in arrears, but they failed to pay back the money they owed the monetary fund under the bailout. that's why we're here. they need more money or the banks will collapse and if the banks collapse there will be a further economic unraveling. >> that economic unraveling seems to be a big part of the question. that is a problem, right? we certainly know it's a problem for greece but how wide a problem is it if in fact there is an unraveling due to greece? >> most europeans think they will not spread this crisis to other eurozone countries, but i'm not sure that this is actually true. i mean they think greece has been given time the eurozone has been given time to shield themselves against any contagion. i'm not sure that's necessarily true. >> so greece is among one of the last countries to end the eurozone in that last round. it does feel like there is a little bit of well you're not really european like the rest of us. so if you had to go off you could go because there is a central, like we are the european nations and you're the greeks. >> they should go because i don't think the euro makes sense. you don't have budget and tax decisions being made by the european central bank. the problem is when you have an economy which is in such trouble like greece is you want to have a chief currency so you can sort of adjust. the euro prevents that. i think if greece was out of the euro, this would be much better for the greeks and i think it would be better for the other eurozone countries as well. because this four or five-year crisis is just agony. >> i would agree but i'm not so sure having floating currency is going to be the panacea. i think that greece had a number of problems before it even showed up at the eurozone door. certainly i would say that staying in the eurozone for now is something that should be done certainly not -- it should not leave the eurozone today. >> but to his point, continued austerity, and let's be clear, when we talk about austerity, it really isn't idealogy. there is idealogy in terms of prescription for an economy in depression to a doctor suggesting that we bleed patients. but what's really going on is the germans have decided they want to protect their banks at the expense of this idealized european project. >> or that their banks are in trouble, and i would disagree having sat across the table from the imf negotiations. it is idealogy it is religion. >> i want to push on that a little bit about austerity, because we hear the word austerity -- we're in a conversation that, so if i'm a listener sitting right now in detroit and i'm like, i hear austerity, and in my experience in detroit, that means some very specific things for the experience, right, of people living on the ground. >> the pensioners in greece so more euros can go to the german banks that made a terrible loan. >> what does that mean if i'm a greek pensioner? >> it means you've already seen roughly 25% of your money evaporate. it means there's no stability in the future. it means if you accept continued austerity, ie more cuts your future is even less palatable than it is today. if you're in the euro there are linkages in the global financial system that could be disturbing. that's probably a better bet at this point than more of the same. >> i would disagree. we don't know the extent of the uncertainty that will be unveiled if these contracts were rewritten, if the new drokma were introduced. >> you talk about idealogy. the euro is idealogy. the euro is the sort of embodiment of all european countries being in one big project, and that doesn't make sense, because germany and greece are so different. what we got right now is that german exporters are really being helped by a relatively cheap currency at the expense of the euros. >> so help me then to think a little bit. when you say the language of religion, because as a political scientist engaging in that world of social sciences i'm always a little bit surprised when economists are allowed to make policy. i only sort of mean that as a joke. but the imf, in a post the humans were sitting there with the imf talking about austerity measures in a nation that had just come out of genocide for goodness sake. i wonder if we think about austerity as the hammer solution to every single economic problem even if in fact there's not a nail. >> let me speak to the point directly. one of the things that happened was they came with a plan that should work for a small open economy. who cares if it was rwanda? so we had to -- one of the first things they wanted to do was increase tax revenue. how do you do that? you introduce a personal income tax and introduce taxes on small businesses. they never paid taxes before. so you're asking people who had just come out of a genocide to introduce new measures they had never seen before. >> so is any of that happening -- is this part of why you're suggesting a move away from the euro so greece can respond in its own national context? >> absolutely because the answer ultimately is growth for the greek economy. the greek economy is 25% smaller than it was a half decade ago, and this is just going to be more flood letting as you're talking about. what they need to do is have a stronger economy so they can start paying pensions. >> i disagree. >> these folks are going to keep fighting on the commercial. the bigger problem that may be a bigger mess even than greece. when we come back. simpler faster sleeker earlier fresher harder farther quicker and yeah even on sundays. what's next? we'll show you. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? in china stocks begin to rebound this week from a crash that wiped out $3 trillion in equity after the chinese government took extraordinary emergency measures to save the economy. they slashed interest rates of $300 billion to keep large shareholders from selling their stock for six months. it skyrocketed even though china's economic growth had slowed. china says it will do what it takes. they said many markets were in an unsustainable bubble and the crash was needed to bring the market back to reality. gordon, you've been saying for years now the chinese economy is not all it's cracked up to be. as it crashed, i was like oh oh, there it is there it is. >> yeah and certainly what you've got right now, even though you had the rebound on thursday and friday now the stock markets are not functioning like new markets and the financial system is on the verge of being frozen. the real problem here is they did not have their 2008. they decided they were not going to make the adjustments everybody else was going to make, so what they're doing right now is they had built up this big stimulus program, imbalance is a real problem, and now you have political infighting where you can see a lot of people lose their jobs including, perhaps the premiere of the country who is the economic czar. this is serious for the political system as well as the economics. >> i want to talk about the political system because in the land of the internet where all people's opinions are absolutely equivalent, there is always a critique of your position on china that you are more the doom doomsayer but the economics are true. the economics are different, so they go in and make a whole lot of decisions that the u.s. government couldn't make for shoring it up. is the chinese system in some sort of chaos, or are we seeing something that doesn't fit with their politics? >> they have a political issue that's been going on since 2012. you have a lot of infighting among senior members. you have a break in control. there are all sorts of things going on and now you have a crash where some say was caused by people who didn't like the leader of the country. i think that's ridiculous but you do have this infighting that's going to have political consequences, you're going to see a lot of senior leaders fall because of the problems in the economy. >> please go ahead. >> i was going to say, let's not get carried away. china does have fundamental economic problems. its old model, subsidizeing exports, dumping them on world markets, having migrant workers stream to the cities. that's breaking down because the cost of labor is higher. people are commenting about environmental pollution, the land deals, that's part and parcel. but the stock market is not coming to an end. 70% of people are invested in the stock market. even after this massive correction, the market is up 7% in the past year. it's probably going to come back more because it's overvalued. most of these investors never thought they were trading in a real market anyway. the whole reason people have charged in the stock market in recent times is because the real estate bubble has begun to come apart and the government pushed people into the market. what's ironic about this is the stock market collapse which is a big deal is much more of a political event than an economic event. it hurts confidence in the system it does expose to gordon's point, rifts over economic policymaking but this economy is not koomcoming down because of the stock market and probably not coming down at all. >> if i was on a treadmill at the health club and i didn't see china underneath but i heard just your discussion and we were talking about quality, infrastructure inefficient government, i would think we were talking about the u.s. i guess part of what is interesting to me is that for china, for greece we have these measures around kind of government ineffectiveness, sort of people losing faith in political leaders, growing inequality troubling lack of investment and infrastructure, and that makes me nervous about where we are. >> so that's a fair point. i think the difference between those countries and those economies and ours is that we have a constitution. you know, we're going to kick the bums out every election but there will still be a constitution. we have some sort of policy certainty. so we have a dollar for example, that is based on confidence. this is still a safe haven economy, still a safe haven currency. they're still going to come to us. you can't say the same for greece. those are fragile institutions. you can't say the same for china because there is a lot going on and institutions are being subtle. you can't say the same of a number of different countries. but that makes us different. >> so our sort of historical trajectory, sort of our what we have -- yet i look at china having this big stock market crash and yet hanging out of bricks, right, and being there with a group of political and economic leaders that are trying to challenge the current hedging of the u.s. and the euro and others. >> but when you think about russia, a big part of the bricks india is very different from china and russia. india and the united states are actually really good friends right now. we talk about bricks but it really isn't a grouping at all. you know when lisa talks about the confidence on the dollar that's absolutely right. people are putting their money into the u.s. because they're having so many problems. why are there so many chinese on the streets in new york city? why are they buying all these condominiums? it's because the united states is resilient and strong. >> but i think what you're underscoring here, melissa, it goes to the fact that none of these models are doing particularly well. people in the united states fundamentally understand that our model has taken us to a place where people are working sometimes two jobs and still not coming up with enough to pay the rate for middle class life the chinese model is really struggling, the russian model looks like a joke. >> but peter, this is global trends, though that when you talk about the problems in the u.s. with workers, i think that's really a manifestation not of problems in the u.s. really, but problems in the global economy. there are certain trends there are realities and they are having an effect. >> so pause because that's exactly where i want to go next. so what is your experience as a worker? do you really work 40 hours a week, and do you, in fact need to get paid more work less? 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a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? flo: hey, big guy. i heard you lost a close one today. look, jamie, maybe we weren't the lowest rate this time. but when you show people their progressive direct rate and our competitors' rates you can't win them all. the important part is, you helped them save. thanks, flo. okay, let's go get you an ice cream cone, champ. with sprinkles? sprinkles are for winners. i understand. presidential candidate jeb bush took a lot of flak this week for something he said to the new hampshire leader editorial board in new hampshire about how to get the economy growing at a faster rate. >> they need to be willing to work longer hours and through your productivity gain more income for families. that's the only way we're going to get out of this rut that we're in. >> that was a mess. democrats pounced and quickly criticized bush, accusing him of being out of touch in the lives of working americans, pointing out that they already work many hours, far past the 40-hour standard work week. it's true americans work an average of 47 weeks. just last week president obama made new overtime rules that would make salary workers making $55,000 a year eligible for overtime pay. >> we're making more workers eligible for the overtime you've earned. that's one of the single most important steps we can take to help grow middle class wages. it's going to give as many as 5 million americans, including 80,000 folks right here in wisconsin, the overtime protections they deserve. >> i get that jeb was awfully inartful in that but giving him the greatest benefit of the doubt, what he's saying is there are 6.5 million americans who work part-time who would like to work full-time, which is very different than saying you all need to work longer hours, right? i guess i'm a little surprised that the new rule isn't a bottoms up it isn't let's raise that minimum wage to $15 an hour, that they're going for the middle. i want my colleagues to explain to me what does this mean that the cap almost doubles who can make overtime? >> it's potentially helpful in the margin's step. the solution -- and i think this is what jeb was trying to say -- we need more paychecks in america that actually pay the cost of american life. >> see, that sound different. >> go back 30 years. the average american worker we're talking 80% of the rank and file work force, has actually gotten a pay cut or has seen their wages stagnate while the cost of health care housing, higher education have gone up. that's not tenable. that's a large part of how we ended up in the great recession, how we have the financial unraveling in 2008 with all these people going more to the banks than their how'suses were worth. it's not because people bought yachts, yes, there's some of that, but mostly it's because people understood that to get their children educated and in front of doctors when needed and live in a decent place, they would have to borrow. >> this is a marginal contribution to get into somewhere a more normal economy. but he's not the one who has the power. congress has the power to raise the minimum wage. that's actually i think, what jeb bush should be addressing. >> i hear you. and this was a week that was odd for me because i felt like such a democrat and republican at the same time. because on the one hand i get this. like absolutely people should make paychecks that actually pay for their lives. my grandfather, like drove a wonder bread delivery truck and was able to raise five kids send them to college and have a