CROWLEY: We start with Friday's news, the best jobs report in three years, and that's the other funny thing that happened along the way. As employment and other economic figures have gotten a bit better, the president's own figures have gotten a lot worse. Watch what happens from last April to this.

(BEGIN VIDEO CLIP) OBAMA: We've been through the worst period of economic turmoil since the Great Depression. I've often had to report bad news during the course of this year, measures that were necessary, even though sometimes they were unpopular, that the worst of the storm is over, that brighter days are still ahead.

(END VIDEO CLIP)

CROWLEY: Worth noting that, in a little over a year, the president's approval rating has dropped 20 points, not unprecedented, but not great.

Joining us now is the director of the White House National Economic Council, Lawrence Summers.

Thank you so much for joining us.

SUMMERS: Good to be with you, Candy.

CROWLEY: Unemployment. You had some good employment numbers, but unemployment reminds at 9.7 percent. In the same year, two years ago, a little more than two years ago, we had a good employment number. It's being compared to the one now. But at that same time, unemployment was 5 percent, a little below. When will unemployment drop to 5 percent now?

SUMMERS: Oh, we've got a long way to go. We've inherited a terrible situation, the most pressing economic problems since the Great Depression in our country.

It is the president's preoccupation to put people back to work. That's what the Recovery Act was all about. That's what the legislation he signed into law, to give incentives to businesses to hire people who've been out of work was all about.

That's what the measures that we're waiting for Congress to act on, to channel credit to small business, to protect the jobs of those on the front lines, teachers and policemen, to make investments, are all about. There's a great deal we've got to do, and we've got to do it with all of the energy that we can, and that's our -- that's our preoccupation.

Even as we recognize that this is no time for anything other than dissatisfaction and action, we can also look at this Easter and last Easter. Last Easter, the economy was losing 600,000 jobs a month. Last year -- last Easter, our exports were collapsing. Last Easter, credit didn't exist for homeowners, for small businesses.

The trend has turned, but to get back to the surface, we've got a long way to go, and that's what we're fighting to do every day.

CROWLEY: Much more with one of the president's top economic advisers, Lawrence Summers, right after this.

(COMMERCIAL BREAK)

CROWLEY: We are back with the head of President Obama's National Economic Council, Lawrence Summers.

I want to try to press you a little bit on the unemployment numbers and play you a little something from one of your colleagues.

(BEGIN VIDEO CLIP)

GEITHNER: But the unemployment rate is still terribly high, and it's going to stay unacceptably high for a long period of time. It's going to take a long time to bring it down just because of the damage caused by the recession.

(END VIDEO CLIP) CROWLEY: So unacceptably high says to me it's unacceptable. So what is the administration planning to do to bring it down?

SUMMERS: First, we're implementing the Recovery Act, the most largest piece of employment legislation since the Second World War...

CROWLEY: But that's almost a year old.

SUMMERS: But it takes -- it takes time for it to implement. The number of projects in which we'll be investing in the first half of 2010 is nearly twice what it was in the second half of 2009, so it will gather force.

Second, new measures to provide incentives for businesses to employ people, such as the tax credit that I mentioned that waives the Social Security taxes and payroll taxes for employers who hire workers who are unemployed.

Third, further support to protect those who are on the front lines, teachers, policemen, and others in state and local governments.

Fourth, and absolutely critically, incentives for small businesses to expand. You know, if you look, there's a great recession everywhere. There's a quiet depression in small business and in some parts of this country, and we've got to make special efforts for them. That's what the president's proposed in terms of providing credit.

Fifth, we're supporting, providing incentives to create the new energy economy, whether it's energy efficiency, whether it's renewables. We took a start in the Recovery Act. We need to do more. And it will create hundreds of thousands of jobs, but Congress needs to act on those provisions.

That's how we get the economy going.

CROWLEY: Now, all...

SUMMERS: Then we've got to renew it for our future by building a much healthier foundation for future prosperity. That was why the health care legislation was so important. That's why reforming financial regulation and putting in place a set of protections that don't let the free market create the kind of disaster that it did two -- two years ago is so important. CROWLEY: Let me -- let me ask you, though, because all of these things that you've mentioned are things that we have known about that have either been in the pipeline for more than a year, when you talk about the stimulus program.

It seems to me that at 9.7 percent at this point, is there anything new that you can offer people now on unemployment that says, "And we're also going to do this"? Because you've shown no hesitancy to kind of move in when the car companies were failing or to help in Wall Street. What about this 9.7 percent? If it's unacceptable, shouldn't more be going on? SUMMERS: It is unacceptable, and we've put forth a whole set of proposals on which the opposition in Congress has not allowed them to pass. The House passed major legislation with the elements that I mentioned last December, and that legislation has not yet been able to pass the Senate. We are taking new steps almost every -- almost every week.

The president's -- the president's team is implementing a program that is providing for further assistance for homeowners to get our housing market unstuck by allowing provisions that mean that if you get unemployed, you don't necessarily face a -- face a foreclosure.

CROWLEY: Do you -- is the bottom line...

SUMMERS: We've committed to do much more to support exports, and that has emerged as a major focus of our diplomacy with other countries. We are not complacent. We are not standing still. We are fighting to implement the programs that have already been legislated; to legislate, to actually legislate the other programs that have been put forward...

CROWLEY: Is your bottom line...

SUMMERS: ... and to put forward new proposals.

CROWLEY: ... that you think Republicans are responsible for holding up new jobs?

SUMMERS: There are important steps, Candy, that would put more people to work, that would help small -- help small businesses...

CROWLEY: You just mentioned earlier that...

SUMMERS: ... get credit.

CROWLEY: ... that's been blocked.

SUMMERS: ... that are waiting on decisions of the Congress, and I can tell you that the majority in the Congress is ready to go on those pieces of legislation.

CROWLEY: But you think it's the Republicans blocking...

(CROSSTALK)

SUMMERS: I'm not, Candy, I'm not one to get into partisan arguments. We have our proposals. We are ready -- we are ready to go.

Look, this week, several hundred thousand people are going to temporarily be cut off from their unemployment insurance benefits.

CROWLEY: I want to ask you about that.

SUMMERS: That's because people -- that's because Congress didn't act to extend.

CROWLEY: Is it radical to want to have to find some way to pay for those unemployment benefits extension? Because that's what's holding it up, is that there is -- is the Republicans saying, OK, fine, this is important, but let's pay for it. Does the president believe that the extensions of unemployment benefits should be paid for?

SUMMERS: He believes that in an emergency, families who are depending on unemployment insurance to buy medicine for their kids should not have that unemployment insurance cut off.

CROWLEY: So it doesn't have to be paid for.

SUMMERS: We believe that we need to approach these issues in their totality, with a fiscal framework that assures that we are getting to a much lower budget deficit. Frankly, if the Congress were to act on the president's budget, we would have a much healthier fiscal situation than we do right now.

So in context of the president's proposals, we could have lower deficits, and we can protect people who need protecting, and we can put money into people's hands so that they are able to spend and push this economy forward.

CROWLEY: I just wanted to wrap up this point. So the White House believes that absent the totality of the picture -- of the proposals you're talking about, that it's all right to pass unemployment benefits though they are not specifically paid for?

SUMMERS: The White House believes in passing a program that will reduce the deficit and push the economy forward. That is what the White House has proposed. That is what the president spoke about in the state of the union address. That is what the president has asked for action on.

You know, sometimes there are tradeoffs and you have to make choices, but the president has shown how, by eliminating -- by eliminating programs, by allowing tax cuts that don't serve a valuable purpose for the highest incomes to phase out, by going after inappropriate tax shelters that benefit a quarter of a percent of the population, how we can reduce the deficit and engage in necessary spending to protect families.

Think about it. Unemployment insurance, a basic protection for people who have been laid off through no fault of their own, cut off because our politicians are not able to agree on a formula for extending it? That's not how our government should be working. CROWLEY: We're going to have more with Lawrence Summers in a minute. We want to ask him where all the manufacturing jobs have gone, right after this.

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CROWLEY: Before we continue, let's break down the long-term loss of manufacturing jobs. When the mall shelves are stocked with products marked "made in China," you might think, isn't anything made in America anymore? And the short answer is yes. Over the past 20 years, growth in manufacturing has risen steadily. It has gone from about $866 billion in 1987 to almost $1.6 trillion in 2008. Over the same period, employment within the manufacturing industry has trended down from a high of just over 18 million in March 1989, to recent lows of about 13.5 million in 2008.

American manufacturers are simply making more stuff with fewer people. Why is that? Mainly, it's productivity. Since 1987, productivity in the manufacturing industry grew by 103 percent. That's almost twice the rate of productivity in the rest of the business sector. Manufacturing technology accounts for a lot of that.

Another reason is global competition, which forces manufacturers to run at maximum efficiency, and that is how you've got a growing industry with a shrinking work force. Now, if they could only manufacture some jobs. We'll talk about this with Larry Summers in a moment.

(COMMERCIAL BREAK)

CROWLEY: We are back with Lawrence Summers, director of the White House National Economic Council. We want to talk about the long-term unemployed. The definition is on unemployment or unemployed for more than six months.

Something the Wall Street Journal brought up in a recent editorial, talking about the long-term unemployed. Nearly one of every two Americans who has lost his job is waiting at least half a year to get a new one. The damage in lost skills and human capital is enormous and can do life-long damage. Not just that people fall behind, but that skills, skill set that you have.

CROWLEY: What is done for these long-term unemployed? It's now about 44 percent of the unemployment figure, is long-term, and you add in others who are looking or dropped out or are part-time, we're up to 16 to 17 percent. What is in it for those who have been searching for so long?

SUMMERS: In this area, as in so many others, Candy, prevention is better than cure. Getting the economy going again, so firms don't have to lay off so many workers is the best...

CROWLEY: But we need a cure, don't we?

SUMMERS: ... is the best way to prevent new people from becoming unemployed. For those who are, this is why the president pushed so hard for an incentive program that gave a tax credit in the form of waiting (ph) the need to pay payroll taxes on any business that hired an unemployment worker -- an unemployed worker. Precisely so that these people would get hired before they were able to lose their skills.

This is why we think it's crucial that unemployment insurance be extended so people can be supported while they look for work, while they think about retooling their skills to adapt to a changing economy. We've got to have a platform in which people are protected if we want them to look for the new jobs, develop the new skills that are necessary.

That's why it's so unfortunate that unemployment insurance has not been extended. And that is why, because so much of this -- you had a segment just now on manufacturing, and it made the point that we've lost jobs in manufacturing.

CROWLEY: And they are not coming back, are they?

(CROSSTALK)

SUMMERS: In part because of productivity growth -- the best way to bring them back is to increase our competitiveness internationally. That means focusing on exports. That means standing up, as the president did, for U.S. producers, as he talks to other heads of state. That means getting rid of rules that don't work for our national security and prevent our firms from selling products when they could get big orders. That means insisting, as Ambassador Ron Kirk does, that other countries who have accepted obligations to the United States in international treaties meet those obligations. If we are able to double our exports in the next five years -- the goal the president has set for us as a country -- that will make a major contribution to jobs in the manufacturing sector, and in turn, to bringing back those who have been unemployed for a long time.

CROWLEY: Some of the impediments that are in making jobs, at this point, is that China's currency is so devalued that they can sell much cheaper than we can. Our goods are more expensive over there, their goods are cheaper over here, and yet the administration has decided to delay its report on who is manipulating their currency.

There is a legislation up there to label China a currency manipulator up on Capitol Hill. Is China a currency manipulator?

SUMMERS: You know, Secretary Geithner issued a statement describing our strategy yesterday. And what he made clear was that these issues of China and other countries of treating the United States as the ultimate importer and not taking our products, are issues that we are totally committed to addressing.

There are three major international economic summit meetings...

CROWLEY: Can I just ask you...

(CROSSTALK) SUMMERS: Let me just finish this thought. Including the U.S./China strategic economic dialogue, where we are going to be pursuing these issues with a great deal of vigor over the next several months. And after those meetings, I think we'll be in a better position to make recommendations, observe measurable progress, and set our course forwards.

CROWLEY: Right now, is China manipulating its currency at the detriment of U.S. jobs?

SUMMERS: You know, there are clearly crucial issues with respect to commercial practices in a number of countries, including China. Those were things the president took up at his first international meeting, the G-20 economic meeting in London. Since that time, our trade deficit has come down substantially, but no one can be satisfied with where we are ,and this is going to be a continued focus for us going forward.

CROWLEY: So it's not a good thing to say out loud, is what I take (inaudible)?

SUMMERS: We're focusing on increasing our new exports.

CROWLEY: OK. Thank you so much, Lawrence Summers.

SUMMERS: Thank you.

CROWLEY: Chief economic adviser to President Obama. Thank you very much.