[MUSIC] Welcome to The Power of Macroeconomics. >> Hi, I'm Peter Navarro and you may not have been expecting your professor to pop up here, but I thought that since we are now midway through our Power of Macroeconomics course, it might be good to have a quick halftime meeting. >> You may remember that in our last lecture we left off with our history of macroeconomics in the year 1990. >> President George Herbert Walker Bush was facing a deepening recession, but his new classical advisers refused to rely on any short run Keynesian stimulus to fix the problem. >> You'll now see in this lecture that while President Bush's Keynesian restraint may have cost him his re-election, his policies arguably set up the most prosperous decade in American history, the booming 1990s, under the administration of Bill Clinton. >> But in this lecture, you'll also see how it went so very wrong after the turn of the century. >> Beginning first with the recession of 2001 and not so very much later, the great recession of 2007. >> So why would the American economy, and many other economies around the globe, have such a difficult time in the twenty-first century? >> In this pivotal lecture you will find at least some answers to that question as we complete our history of the warring schools of macroeconomics.