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President to Unveil Immigration Plan; Economist: Deficit "Not Our Biggest Problem"; Director David O. Russell Talks "Silver Linings Playbook"; Fan Make $75,000 Shot, Tackled by Lebron; Life After the Game

Aired January 29, 2013 - 08:30   ET


CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The prognosis is grim for snowmobiler Caleb Moore who suffered serious injuries last Thursday at the crash at the winter X Games in Aspen. A family spokesman says the 25-year-old Moore is in critical condition at a hospital in Grand Junction, Colorado. Moore had heart surgery on Friday. Doctors say now he's dealing with brain complications as well.

Live pictures of an oil storage facility explosion out of Texas. It started about 3:00 a.m. this morning about 70 miles east of Dallas. You can see the signal going in and out. Two people were hurt. The fire marshal says two victims were smoking on the top of the storage tanks when one of them exploded. Look at the fire there. The man suffered burns to his face, chest, and arms. The female sustained serious injuries which required her to be placed on life support. You can see that oil storage facility still in flames there.

After walking the red carpet at Sunday's SAG awards actor Taye Diggs caught a burglar red handed in his home. Police say Taye Diggs found this guy in his garage looking for stuff to steal. The suspect fled, Diggs ran him down, tackled him and held him until the police arrived. He thought he was just going to an awards show.

BROOKE BALDWIN, CNN ANCHOR: Christine, thank you.

JOHN BERMAN, CNN ANCHOR: He is one of the most famous economists in the world and he is leading liberal voice as well. Paul Krugman is joining us this morning. We're lucky to have him.

BALDWIN: He is the author of "End this Depression Now!" with a new preface by the author. Paul Krugman, it's a pleasure to have you at the table.


BALDWIN: Nice to see you.

Before we talk, there is so much we want to talk about. I know in one of your columns recently you were talking about the deficit, saying it's, I'm quoting you, "not our biggest problem by a long shot." We have to ask you about immigration because obviously a couple hours away from the president and his proposals in Vegas. As an economist, take your emotions out of this, as an economist, can you support this pathway to citizenship?

KRUGMAN: First of all, I support it as a human being. These are a lot of people who are here. We're not actually going to kick them out. We want to bring them into our society., ad that's also good economically. Again, the question is not should we have these 11 million people here, because they are here and we're not going to send them back. The question is: how do they best integrate into our economy and society?

The answer is by bringing them under the rule of law, bringing them into our system, not by pretending that they're not here or trying to have this sort of shadow economy of illegal workers. Bring them into the system, that's good for everybody.

BERMAN: One of the things being a columnist you leave a long paper trail, and in 2006 you wrote this about the immigration issue: "Immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of one percent, and because Mexican immigrants have much less education than the average U.S. worker they increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans."

So, again, from an economic standpoint what will the effects be of bringing these people legally into our economy?

KRUGMAN: Again, the point is all of those negative effects that I talked about, those are happening already, those people are already here, and we're not going to send them back, and it would be a crime against humanity to try and somehow send them to the border and shoo them out. So the economic effects are already in there.

And by the way, immigration, if you aren't torn about the immigration issue, there's something wrong with you, because on the one hand it does put some burden on the least skilled, lowest paid native-born Americans. On the other hand, it's a tremendous boon to the immigrants themselves, who are people also. But there are no moral dilemmas, because the people are here. We're not talking about allowing a new flood of immigration. We're just talking about bringing the immigrants who are already here into the American system.

BALDWIN: You're saying if you are torn there's something wrong.

KRUGMAN: No, if you're not torn. The immigration in general is a morally ambiguous issue, should be considered a morally ambiguous issue. But OK, we don't have to resolve that issue right now. That's not what's on the table.

ROMANS: In 1986, Ronald Reagan thought they fixed this. They thought they would put people in a line and end the line. Whenever you have a line, the economic draw of a job and the ability to raise your standard of living more than you could do anyplace else in the world by just coming here, how do you stop the line of illegal immigration?

KRUGMAN: Well, it's never going to go away completely, but actually illegal immigration, we have numbers in immigration which is a little bit funny because in principle we shouldn't know, but we have a pretty good guess, and it's actually dropped off quite a lot. It's dropped off partly because job opportunities are not so great here, partly because Mexico is changing. There is in the northern parts of Mexico the economy is improving. Their population is aging.

So this is a problem that won't go away, but it looks like it's a problem that's going to diminish. The big problem now is how do we deal with the people already here? And I think we're moving very much in the right direction.

ROMANS: Bigger numbers than in '86.

BERMAN: One of the things we've been writing and talking about is the debt, the idea of what we should do about the debt or not do about the debt. One of the things you seem to be suggesting we should not do is aggressively try to cut it before doing other things. I'm sure everyone's going to want a piece of this action right now, but I'll ask you to explain yourself first.

KRUGMAN: All right, the main thing is we are in a depressed economy, particularly we are in an economy where normally if you cut government spending, that's going to have a depressing effect on the economy, but you can offset that having the Federal Reserve cut interest rates. The Fed can't do that because interest rates are zero because the economy is so depressed they put the pedal to the metal. Which means that right now there are major negative economic impacts from any kind of attempt at fiscal austerity, which says this is not the time to do it. Later, once the economy is recovered, we're on the road to recovery, we're not there yet, but later you do it. This is, you know, this is very basic economics.

BERMAN: Marsha is shaking her head.

REP. MARSHA BLACKBURN, (R) TENNESSEE: I understand where you're coming from, your train of thought, but I really disagree with this because when, it doesn't matter if I am in California or New York or Tennessee in my district. What I hear from individuals that are job creators and new start businesses is regulatory overreaching uncertainty is an impediment, lack of capital is an impediment. Much of this is driven by uncertainty that exists in Washington and out of control federal spending, and they want to see some kind of framework to bring this under control, so I think the time to do it is now.

KRUGMAN: There is a lot of evidence on that. We actually have surveys of what's holding back business. The ultimate answer is lack of sales, not this other stuff. And we also have, we can actually compare business investment. It turns out it's actually doing pretty well relative to this present state of the economy, business investment response, given that business investment is actually pretty strong. There's no hint in the actual data as opposed to what people who might want lobbying concessions say, there's no hint in the actual data that all of these issues that loom so large in our political conversation are playing any role.

BLACKBURN: I disagree with that. KRUGMAN: What's overwhelming in the actual data is just that we don't have enough spending in this economy.

BLACKBURN: The follow-along question to lack of sales is what is driving lack of sales? It is uncertainty, it is lack of capital. It is just a fear of what is happening in Washington, taxes that are going up. Let me tell you, you're talking to somebody that worked her way through college selling books door to door. I know what drives sales.

KRUGMAN: That's just not true. We just had the biggest bubble in American history burst, we have U.S. households who borrowed heavily to finance that housing bubble pulling back because of an excess of debt. Why do we need to reach for other explanations? This is the most transparent economic crisis I've ever seen in my lifetime.

BALDWIN: Let me jump in and try to give an analogy. Instead of talking about the U.S. economy, we're talking about a person or American family. Can we do this?

KRUGMAN: That's the famous fallacy, right, because if you're a household and you say, OK, I'm going to tighten my belt because times are hard, fine, that's the right thing you should do. The thing about the economy is that money moves in a circle. My spending is your income. Your spending is my income. If both of us decide we need to cut back because times are tough, the end result is we actually end up reducing both of our incomes, we end up make ourselves worse off. That's how depressions happen is because the economy adds up, because it's very different. An individual family can do stuff that if everyone tries to do at the same time ends up being destructive.

This is why we have a government which at a time when families do need to repair their balance sheets can sustain the economy until families are in better shape.

BALDWIN: What about 20 years from now?

KRUGMAN: Well, 20 years from now -- I'm a deficit hawk, right, but 20 years from now or you know looking about where we're going to be but not while the economy is the at the bottom, not at a point when -- look, there's a lot of growing evidence now that even in purely fiscal terms --

BLACKBURN: No time like the present.

KRUGMAN: No. In purely fiscal terms, cutting back right now, fiscal austerity is probably disruptive, because it increases the unemployment rate, a lot of the workers also never get reemployed, which means they will never pay taxes. It leads to lower business investment, the biggest thing holding down business investment is the weak economy, which means lower economic capacity, lower taxes in the future. And remember, the federal government can borrow at the lowest interest rates pretty much ever in history right now, and it can -- inflation protected federal bonds have got a negative interest rate --

BALDWIN: How much hate mail do you get? KRUGMAN: I've got to be the national champion on that.


BERMAN: You haven't convinced Representative Blackburn here.


BERMAN: And you know what the political climate is in the U.S. right now where people are talking about cutting back if not flat out cutting spending. So you're not going to convince everyone.

KRUGMAN: I know I'm never going to convince everyone. Are we going to get the stimulus plan I would like? No, we're not. But have we managed to move the conversation? Have the prospects for another damaging round of short-term spending cuts diminished? I think they have. You can see measurably -- not measurably. If you follow this stuff, if you read the complaining editorials from the deficit scolds you can see they have the feeling that they're losing this argument and people like me are winning it.

ROMANS: Is the economy getting better?

KRUGMAN: Yes, the economy is getting better, slowly. And that's part of the point. This is not a permanent condition. The housing bubble burst seven years ago. We build very few houses. Housing is coming back. So we're on the upswing, but we're not there yet.

BERMAN: We'll quit on a good note then the economy is getting better. Paul Krugman.

BALDWIN: From our future deficit hawk Paul Krugman.


BALDWIN: Thanks so much. That's fascinating.

Coming up next: "Silver Linings Playbook" is nominated for eight Oscars, including Best Picture, Actor, Actress, and its director David O. Russell getting Academy nods as well. He is here. Hello, sir. Rocking the sneakers, I like it. Good to see you again.

DAVID O. RUSSELL, DIRECTOR, "SILVER LININGS PLAYBOOK": Good to see you, too. How are you?

BALDWIN: We're chatting in a moment.


BERMAN: He really is one of Hollywood's hottest directors, and we mean that in every way. He has one of the most critically acclaimed movies of the year.

BALDWIN: David O. Russell is the director of "Silver Linings Playbook", nominated for eight Oscars at the Academy Awards, upcoming February 24th, stars Bradley Cooper as a bipolar man just struggling to put his life back together.


ROBERT DE NIRO, ACTOR: I might have made you feel worse about your behavior, but I didn't know anything. I didn't know how to handle it. I mean it's about us spending time now. I'm going to do everything I can to help you get back on your feet.


BALDWIN: That was just one clip. He's asking everyone, have you seen my movie? Have you seen my picture? This is David O. Russell joining us. And I can't believe I get to run into twice in a couple of weeks hanging out on the red carpet at the golden globes a couple weeks ago. And it was fascinating talking to you then, here we were. Reiterate how this is. You talked about your son and why this was very personal for you this film.

RUSSELL: Yes I mean, you know I -- five years ago I was given the book that I based it on and I was looking for a story that could make my son who had struggled with mood disorder feel part of the world. And this is a real story, just to me and Bradley Cooper became this person. I don't think people -- I mean he just knocked me out. And he became my son with all these changing moods and feelings in a way that brought my heart out so I was blessed to work with him.

BERMAN: You don't really get to work with good performers very much, do you? I'm being facetious. You have like four actors nominated for Academy awards, you worked with Christian Bale before.


BERMAN: Mark Wahlberg, you know actor after actor after actor. What is it -- how do you work with people this talented, this big in the business?

RUSSELL: If you come from your heart you know and you come from a humble place and you write a script that you really mean, it took me five years to write this and I tried to make it for five years. And every single character 00 I look at every character, the movie from every single character's point of view so Robert de Niro's point of view as a father, Jackie Weaver's, Jennifer Lawrence's, I mean she became a women on this film.

You know five years ago it was a blessing because Jennifer was in high school five years ago and she really knocked us out as an actress in this picture.

RICHARD SOCARIDES, WRITER, NEWYORKER.COM: Can I just tell you, we were talking before, I mean I saw this movie right before -- right around Christmas, this is by far not only my favorite movie of the year but my favorite movie of -- in many years. I mean, it's such a beautiful film and it's about so many life-affirming things. It starts out kind of as a serious movie about mental illness and becomes a comedy and then becomes a romance. I mean how did you like get all that stuff in this movie? RUSSELL: Well I think you know the story itself was something that I really related to, the fact it has romance in it and dance but if you come by it honestly as my favorite director's Frank Capper Scorsese do its real. And seeing with my son's life it's by doing and many families have come forward to us who have struggled with any of these challenges, people have their families everyday are fighting for their lives every day with these issues silently, quietly, bravely, and feeling in the shadows not able to talk about it. You must do things, life goes on.

FRANK FOER, EDITOR, "THE NEW REPUBLIC": You talked about the very personal nature of this film. How did making this movie reshape your understanding of your own son and your relationship with him?

RUSSELL: I think that it made everybody feel more relaxed and more part of the world, so that we weren't living in our own stigmatized corner of the world it was more public and more embraced and "Silver Linings" is what I learned from him. Everything I learned from him applies to me and everybody else. I can't afford a negative attitude.

BLACKBURN: We were talking about the film you're working on that will go back to the Abscam situation but you talked about focusing on the relationship. So what draws you to writing a script, doing a film that bases on that relationship? So many people go for the big storyline, so why do you kind of dig down? What causes you to do that?

RUSSELL: Characters are what interest me more than anything else. There are a lot of beautiful movies this year. Ours is about performance and characters, I mean, individual people that I could watch all day, those are the people that inspire and fascinate me.

BLACKBURN: You live out that character development rather than --

RUSSELL: Yes and then there's a theme that has to hit home and mean a lot to me in the fire it was you could never give up and sort of the thing here and if you come by from inside real people you feel it.

BERMAN: David O. Russell what does the "O" stand for?

BALDWN: Oscar?

RUSSELL: I'm not allowed.



BERMAN: Leave it at that. Just smile and walk away. It's great to see you here this morning. Thanks for coming in.

RUSSELL: Thank you.

BALDWIN: Thanks and good to see you again.

Just in to the CNN NEWSROOM I'm hearing the crew laugh as well. Huge announcement from Apple we're hearing and we have details on that next.

BERMAN: And holy half court shot hear from the guy who banked that hook shot and then just got plowed over by Lebron James, oh, and he goes down.


BALDWIN: Just in to CNN, Apple has announced a new iPad, this one will have 128 gigs of memory it is twice as large as the current device.

BERMAN: That sound you just heard people running to the Apple store to line up -- the stampede.

Well hear it from a man who made a once in a lifetime shot and got a really, really big hug from a superstar.

BALDWIN: Kind of awesome.

BERMAN: Michael Drysch made this half court hook shot Saturday during the Miami-Detroit game he won $75,000 but that's not the good news. He was tackled by Lebron James after. We asked now the computer technician what he's going to do with all of that money.


MICHAEL DRYSCH, COMPUTER TECHNICIAN: Well, after taxes I'm going to pay bills and see my mother in Utah, she's Alzheimer's, has Alzheimer's and my sister's taking care of her and my brother is there so get out there and see where it goes from there.


BERMAN: Nice guy. He won $75,000, I gave him a little too much unintentional. Brooke has offered to make up the difference.

BALDWIN: He's like I'm never taking the (INAUDIBLE), Lebron James tackling him.

The Super Bowl is just days away. CNN is taking a closer look at the game and its effects goes on and off the field.

BERMAN: In this edition of "The Human Factor" chief medical correspondent Dr. Sanjay Gupta talks to former Detroit Lion Lamar Campbell who's still dealing with damage from the game.


DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): Lamar Campbell has achieved what many young men only dream of. After four year starting for the University of Wisconsin he made it to the pros. Injuries ended his NFL career but Campbell successfully found a new life after the game as a real estate broker.

LAMAR CAMPBELL, HOST, "LIFE AFTER THE GAME": Welcome back to "Life after the Game." GUPTA: And radio talk show host on the Voice America Sports Network a platform he uses to educate other players about transitioning to life after football as well as the dangers of injuries you can't really see -- repeated hits to the head.

CAMPBELL: I don't think we thought that you had a concussion until you were knocked out on the field.

GUPTA: As a player he didn't know that concussions can cause serious injury to the brain. Now Campbell says playing football takes years off a players' life. He's also suffered some memory loss.

CAMPBELL: There were situations where I don't remember certain series. Like I would be out there and not realize exactly what was going on.

GUPTA: While he was never diagnosed, looking back, Campbell believes he's had over ten concussions in his football career and he believes players today need to recognize the symptoms and be willing to let their brains heal.

A year ago, Campbell considered donating his brain for research in chronic traumatic encephalopathy or CTE.

CAMPBELL: I racked my brain around this for a long time. I think my decision was made -- it was just the timing when to tell my family.

GUPTA: Just a few months ago he sent the papers to Boston University. For him it's all about giving back to the game, making it safer for future generations including his son, should he follow in his dad's footsteps.

Dr. Sanjay Gupta, CNN, reporting.


BALDWIN: We have laughter here as we finish.

BERMAN: We're having fun.

BALDWIN: We are having fun. STARTING POINT "End Point", Representative Marsha Blackburn.

BLACKBURN: Yes, I tell. The shout out to Brendan Morocco. God bless him and his arms -- what a great story.

BALDWIN: He lost all four of his limbs back in Iraq in 2009. Now has two arms. Incredible.

FOER: We learned this morning also that Paul Krugman couldn't find his Nobel Prize for a stretch of time which is kind of disconcerting. It was apparently buried behind a sofa or in a box --

BALDWIN: Box of magazines.

FOER: Box of magazines. Why did my Nobel prize -- BERMAN: It wasn't just any magazines. It was magazines about him so it wasn't like it was old "Sports Illustrated" or something but it still was pretty alarming to hear.

SOCARIDES: We've had a good time this morning. I think Marsha and I were saying we could solve pretty much any problem working together.

BLACKBURN: That's right.

SOCARIDES: She is very reasonable, even though sometimes her positions sometimes her votes are not that reasonable.


BLACKBURN: The thing is I know what I believe and I am committed to those beliefs, and we have great discussions and we disagree in the most agreeable way -- no, no, just take the speeches.

BERMAN: You're going to have to say that's great discussion after this.

That is all for STARTING POINT this morning. I'm John Berman.

BALDWIN: I'm Brooke Baldwin. Thank you so much for being with us. Now to Carol Costello. "CNN NEWSROOM" begins right now. Carol, good morning.