Q: John Maggs is a staff correspondent for the National Journal. He also has the National Journal experts blog on the economy. John, thanks for being with us.

Maggs: Glad to be here.

Q: Although I don't think I'd want to be an economic reporter right now, especially with the world leaders coming in this week. First of all, can you give us a setup of where we actually are in terms of the government, bailouts, Congress, all this economic uncertainty -- just bring us up to date.

Maggs: Well, on the market side, of course, the uncertainty and the volatility continues. The stock market just on Thursday of this past week swung 900 points in one day, ended up 552 points. The Dow Jones Industrial Average just indicating that there's just a great deal of volatility and uncertainty out there about the economy, with a lot of people that are watching the markets feeling that this crisis is going to get worse before it gets better. Politically where we are is a presidential -- during a presidential transition, which is a very odd time to have a summit, to bring the world leaders together in the United States, because of course the president of the United States, George Bush, can't commit to much. And that's why this summit is largely a symbolic exercise, the beginning of a process of sending a message to the world that the rich countries of the world are united and that they're going to continue to talk to each other and that the rest of the world, the people out there, the investors, can depend on the fact that there are leaders who are concerned about this even though the reality is nothing's going to happen until the new president takes over January 20th.

Q: But this president was forced to do it. Right?

Maggs: Essentially, I think he had no choice. In fact, there's an awful lot about this bailout that George W. Bush has been forced to do by the markets and by the crisis and by uncertainty. The president of France first suggested it. The White House at first indicated that it didn't want to do it, but then ultimately decided, I think, that they needed to, as I say, send a message that the world was united and that there wasn't going to be some kind of a conflict between Europe and the United States over regulation and how to get a handle on this financial crisis.

Q: Will anything be accomplished or announced or any changes be made after it?

Maggs: I don't think you're going to see much significant that's going to be committed to at the summit. I think they're going to commit to a process. You'll see a lot of things in the communique that they put out about meetings that will take place and commitments to do X and commitments to do Y without saying, "We've embraced the following regulatory changes." I think that's the most likely thing.

Q: And Jim Leach, a former Republican congressman, is the Obama's representative, the Obama election group's representative for this conference?

Maggs: Right. I mean, I think you see Obama certainly reaching out to Republicans and bringing Republicans into his tent. He thinks it reinforces this idea of bipartisanship. Leach, of course, was involved in banking regulation for years and years when he was in the House. I think he's considered kind of a sensible, moderate person, and I think also just a very noncontroversial person to send over there.

Q: But he -- so Obama's really playing no role in any of this?

Maggs: He's trying to stay above the fray. I think he would like the president to take responsibility for everything that's happened until now. If Obama gets involved at this point, then he starts off his term with some baggage connected to the very unpopular... Bush administration and the way the Bush administration's handled things. So it really is hard to tell, though, whether he will be able to stay above the fray. There's going to be votes in Congress during the lame-duck session next week, and Obama has indicated that he wouldn't play a large role in that even if he might vote during it. So, you know, we'll have to see whether he really can avoid making statements about these things.

Q: There's been quite a bit of criticism of Henry Paulson and the Bush administration's attempts to fix this huge economic problem and the fact that the rules put in place guiding the dollars that went to the banks and AIG -- but specifically the banks -- that there was nothing that they had to do with the money. Do you agree, and what will -- how will that be changed in the new packages that are being discussed now?

Maggs: Well, this is a perfect example of a kind of thing that Obama doesn't want to have anything to do with, because commitments are made and I think that there's a lot of -- you can easily see that Paulson is going to end up taking a lot of the blame for decisions made early on during the bailout, and why would Obama want to be associated with actions and decisions made by Henry Paulson when he is going to be, you know, to some extent the focus of blame for not accounting for how the money's going to be spent. So Obama would like to really start fresh in the spring. Again, but I think it's too early to say whether it's going to be possible for the next two months for him to stay above the fray.

Q: But what, but do you agree -- I am not asking you a political question, I'm talking about as an expert covering it -- should there have been or will there be more checks and balances in place?

Maggs: The news that we had this week was that the oversight mechanism that was supposed to be put in place to keep an eye on this money, you know, six weeks later still hasn't been put in place. Well, the reality is that there has been tremendous switching of gears throughout this process, where you saw the original raison d'etre of the bailout -- which is to buy mortgage securities -- thrown out the window by the Treasury Department because they judged it wouldn't work, it would take too long to get going, and that this alternative approach was what's needed. So in the context of a bailout that's evolving from day to day, the idea that there wouldn't be, you know, a confirmed oversight person in place... you don't have to believe in conspiracy theories to believe that they're just -- they haven't been able to get to it because they don't know what it is that they're supposed to be overseeing. So --

Q: But why should the money go to bankers as opposed to prevent these home foreclosures?

Maggs: We're butting up against the political question there because ... preserving these large institutions was the first line of defense in the bailout. They thought that, the Treasury people thought, "We've got to keep these banks from going under. We've got to keep these large financial institutions from going under," because that means the entire world financial system, you know, ceases to operate. I think they recognize now that only helping those institutions is not going to be good enough for a democracy where there's an awful lot of other people who are being affected by the downturns. So they're naturally going to the second stage here and recognizing that in an Obama administration, there's going to be a lot more sympathy for homeowners than there has been in the Republican administration.

Q: Wasn't that the early criticism of congressional Republicans, Eric Cantor, and others, that it wasn't really helping people?

Maggs: They did say that, and they -- but at the same time there was, you know, great suspicion that a lot of the money that was going to large institutions was just, was just bailing out investors, when the reality was that the people that were organizing this were trying to keep the money flowing in the financial system. There was -- a lot of investors ended up, you know, taking a bath and getting wiped out, so the Republicans -- yeah, they said that they wanted to help the little guy, but they also, you know, had a lot of suspicion about whether helping banks out at all was a good idea, and I think that that, clearly, if you don't have any of those banks operating, the financial system itself can't operate.

Q: Well, let's turn to Congress, then, before you go. So John, let's turn to the other end of Pennsylvania Avenue. What is Congress pushing through for the bailout for economic recovery? I want to talk about the auto industry as well as home foreclosures, etc.

Maggs: Right. Well, the talk of stimulus and talk of helping the auto industry seems to have run up against a great deal of opposition in the Congress, and you had the chairman of the Senate Banking Committee, Chris Dodd, saying there doesn't seem to be the votes for a bailout for GM and Chrysler, and you also have House Speaker Nancy Pelosi saying that she now wonders whether there is support for anything except a very small approval of unemployment benefits as far as a stimulus package. So initial ideas of a hundred or maybe even 300 billion dollars in stimulus this fall seem to be evaporating. I think that, that part of the calculation there is, again, that they, that Obama wants to be able to come in in January and put forward his agenda with a larger Democratic majority in the Congress. Doesn't really want the kind of compromises that the Republican minority this fall might force, as far as how to stimulate the economy. So it looks as though the agenda for this lame-duck session, if it happens at all next week, has been sharply cut back, and a lot of the action will be in the spring.

Q: So watch to see whether or not this lame-duck session happens?

Maggs: Right. I think, I think that this weekend they're going to be assessing it. If the only reason to have a lame-duck session is to approve $6 billion in unemployment benefits, I don't know whether that's really going to be good enough reason, and they may just postpone it altogether.

Q: Wow. Anyone listening at home that doesn't have a damn thing to do with the government would hear what you're saying and have no confidence in either the White House or Congress. I mean, basically, what you're saying is that no one's really sure, there's all these different plans, there may not be action right away -- watch this space.

Maggs: It's true, and it's not clear right now whether the enthusiasm for a stimulus that we saw just a week, barely a week ago, the fact that that's evaporated may be a political call by the Democrats and the incoming Obama administration or simply a bow to the fact that the Republicans in Congress are who many of -- you know, some of whom are going to be leaving office after the turn of this year -- whether those Republicans have nothing to lose to say, "We're going to block this. We don't want this bailout of General Motors going forward."

Q: And that's why everyone has to check out your blog every day. National Journal experts blog, this one on the economy with John Maggs, thanks for being with us.

Maggs: Thank you.