pick as a winner or loser tomorrow and so why invest their dollars and why invest their pension funds and the like into some entity that may be on the losing side of that he equation tomorrow. so that's why i'll close on this and turn it over to jeb. that's why i made the reference earlier that we're drawing a line from what was in the past going forward. we'll have a system in place that everyone will know what the mechanism will be for failing institutions. what the mechanism will be for successful institutions and the like and so the rules will clearly be spelled out and so investors will get back in the marketplace and the economy will grow. but i think jeb from texas would like to speak on that. >> yes, i just want to say, i'm not sure how useful the question is in this sense. i mean, different members had different views, for example, on t.a.r.p. but i think it is largely accepted now that a peace of legislation that designed for taxpayer protection and stability has morphed into a vehicle to be leveraged to

advance a social, a political, an economic agenda of the administration that is plunging this nation further into debt. and this unified public proposal, number one, having the federal reserve be able to tend to their monetary policy, having an enhanced chapter of the bankruptcy code and in having the feds still having the ability on an emergency basis under 13-3 to provide liquidity to the system but not to bail out individual firms and pick winners and losers. what's important is what we need to do going forward. >> i wanted to ask if anybody wants to comment about barney frank's executive compensation plan that will leave accountability and right now conversation rules don't go far enough to punish bad behavior?

>> we address that in the -- on executive compensation we have our market stability and capital adequacy commission. and one of the things they'll look at is certain practices that they believe are risky for as a whole or for the financial services as a, you know, specific parts of that. if this commissioned -- commission had been in effect, they might have identified mortgage originators were paid bit volume of the loans that they made, not by the ability of the ability to repay. and, in fact, people had started identifying that as a problem and i wish we had that commission to say that was a problem. what chairman frank, of course,

advocated today was allowing and, you know, through an intervention taking away the ceo or the board of directors or even the shareholders in some cases ability to set compensation and we believe, and this is -- we believe that that is the soundest system to allow corporations and itses to set the -- and its boards to pay. >> do you agree or disagree? >> disagree. >> i don't see anything specific on credit default swaps or -- >> it's in there. >> well, our market stability and capital adequacy portion of that is exactly what that's designed for. looking at peheirs as i said

under their purview they begin to analyze how much those then are being used by some of these other institutions and they begin to look at what is the appropriate policy. and in many cases we found out that a lot of that activity was going on a very leveraged basis and now under this provision, this group could come together then that particular regulator that could begin to set capital standards if that entity is going to engage in that kind of activity. if you're going to have market integrity and if you're going to have the marketplace be the primary regulator, you set the capital standards and then you say, okay, if you want to be in this particular business, this is your capital standard. then that entity has got to go out and raise that capital and then hopefully the marketplace is looking at that behavior and saying they're going to need that much capital. do we want to risk that capital? and so you really end up with two regulators. you end up with a regulator establishing some minimum capital requirements and then you have the marketplace which is by and far the best regulator that you can have and then ascertaining whether that particular security is something

the potential return versus the risk is something that the marketplace wants to invest in but you don't have a systemic risk regulator or some very strict regulatory agency out there saying we're going to abandon that or we're going to abolish that. we're basically trying to keep the market principles in there but yet making sure you're going to be in that business, you're going to have adequate capital to back up your transaction. [inaudible conversations] >> every weekend the latest nonfiction books and authors on c-span2's book tv. how do you run for

>> look for our entire schedule online at booktv.org. >> the government funding of colleges, direct aid to colleges and their students really is a late 1950s, early 1960s thing that has grown very rapidly since then. >> hillsdale college has never accepted government funding and today not even government-backed student loans are permitted. >> you know, title 4 of the higher education act is

400-roughly pages long. we have a lawyer here in town who tries to keep the government from giving us money. and i went to ask him to send me title 4 and he said it wouldn't be any use i wouldn't be able to arise it. >> larry arnn sunday night at 8:00 on c-span's q & a or listen on c-span radio, on xm satellite radio or download the c-span podcast. >> how is c-span funded? >> i have no clue. >> maybe some government grants. >> i would say donations. >> advertising for products. >> public money, i'm sure. >> my taxes? >> how is c-span funded? 30 years ago, america's cable companies created c-span as a public service, a private business initiative, no government mandate, no government money. >> and now a senate hearing on u.s. policy toward north korea. the witnesses include steven bosworth who's the special representative on north korea

for the state department john kerry chairs the foreign relations committee. [inaudible] >> the hearing will come to order. we're here today to discuss recent troubling developments in the korean peninsula and the road ahead in dealing with the democratic peoples republic of contrary. we're going to hear first from the administration's point man on north korea and my friend and constituent, ambassador steven bosworth, the dean of the fletcher school of law and diplomacy at tufts university. we'll also hear an expert panel of witnesses who together have more than 100 years of experience dealing with the challenges that we face in north

korea. north korea's test of the long-range ballistic missile last april followed by its second nuclear test last month refuse, frankly, reckless and irresponsible acts that do nothing to advance north korea's security. i was pleased to see that last night in new york, the permanent five members of the u.n. security council agreed to speak with one voice and tell north korea that its conduct is unacceptable. the draft security council resolution which we expect to be voted on soon imposes a sweeping arms embargo on north korea and financial transactions linked to north korea's nuclear program and ballistic missiles. it calls member states to inspect all cargo to and from north korea on the high seas at

seaports and at airports. if countries have reason to believe the cargo contains material related to north korea's nuclear program or other weapons programs. the obama administration should be commended for this strong united outcome and china recognition as well. as north korea's ally and largest trading partner, china can play a role in this peaceful resolution of this crisis. i was in china when north korea conducted its second nuclear test. and i am convinced based on the meetings i had and the language used as well as the body language interpreted that china shares our opposition to the north's pursuit of nuclear weapons. we can all be forgiven for feeling we've been here before. we are now, quote, hip deep into the third north korean nuclear

crisis. the first crisis ended in 1994 with the signing of the agreed framework which froze the north's production of plutonium for eight years. and the bush administration confronted the north koreans that it was cheating on the framework but the bush administration ruled out direct talks on the issue the result was the second nuclear crisis, the demise of the agreed framework itself. north korea's withdrawal from the nonproliferation treaty and the quadrupling of the stockpile of fissile material. how we deal with north korea this time around will have grave implications, not just for maintaining peace and stability

in northeast asia, for our alliances with japan and south korea, but it will particularly have an impact on our ongoing nonproliferation efforts with respect to iran and any other would-be nuclear power. step one is to get a unified response from the united nations. that result appears to be imminent. but then we must resist the temptation to go intorg% a defensive crouch. the past teaches us that the benign neglect is not a viable option. america must lead efforts to stop the current negative cycle of action and reaction and begin the hard diplomatic work needed to deliver results. as we seek to engage, we should remember the council of former secretary of defense, william perry, who advised us to deal with north korea, quote, as it is, not as we would wish it to be.

we should not assume that north korea sees the world the way we do. recent developments should convince us to test our assumptions about north korea and its motives. for instance, when i was in china discussing this with chinese leaders, it was clear that there are a number of reasons for north korea's current actions. one begs the question is north korea really just trying to get our petition? attention? in a fairly sophomoric but nevertheless extraordinarily dangerous way. the fact is they already had our attention. from day one the obama administration made a point of offering to engage directly. and given the events of the past six months it seems equally possible that north korea is simply consumed with its internal leadership succession issues or possibly even simply responding to its dislike of the

policies of south korea in recent period. and that has encouraged it to adopt a brash and defiant posture against external pressure. the greatest likelihood i suspect that ambassador bosworth would agree is that there's some of all three of these involved in the position that they're taking. some observers on the outside have concluded that diplomacy with north korea is essentially hopeless. well, i completely, bluntly disagree with that as i'm confident ambassador bosworth is. it's an imperfect tool but the fact is, that even with north korea, when we engage in diplomacy, diplomacy paid some dividends. and it could again in the future. so finally, there's a common assumption that north korea will sell anything to anyone.

north korea's export of nuclear technology to syria appears to prove that case. but i believe and i think many share this, the president included, that it's worth testing whether a combination of multilateral enforcement initiatives such as the proliferation security initiative combined with cooperative threat reduction efforts championed by senator lugar, that those could alter the north's conduct. as we test our assumptions and it's important that we do, and examine our options, we have to consider not only who's at the table but also whether to attempt to reinvigorate the six-party talks launch bilateral negotiations or have a new architecture. we have to prioritize many issues that demand attention including nuclear proliferation, human rights, regional peace and security, economic development, and humanitarian concerns. i personally believe that we can get back to the six-party talks.

that we should get back to them and i believe we will get back to them. i also believe that bilateral is an important route to simultaneously take and i said so for any number of years. i look forward to hearing from our witnesses on each of these questions. let me just say one quick word before -- passing it to senator lugar, i know i speak for every single member of this committee and for every american when we express how deeply concerned we are on a purely humanitarian basis. on the basis of commonsense and decency, how deeply concerned we are for the fate of two american journalists, laura ling and euna lee who are under detention in north korea. we are offended by the severity and excess the sentence which was pronounced on them and we

hope that commonsense is going to prevail and that north korea will see this not as an opportunity to further dig a hole but as an opportunity to open up and reach out to the world to suggest there's a better way to try to deal with all of these issues. we urge north korea to do what is right. we urge them to do it promptly and unconditionally and to release those young women from custody. senator lugar? >> thank you very much, mr. chairman. for holding this hearing, to review the present situation in north korea. the recent provocative actions by north korea that you've cited are moving their country toward even greater isolation. almost universally the international community has condemned north korea's nuclear test, detention of american reporters and bellicose remarks. there's wide speculation about the motivations for north korea's behavior and some

observers point to dynamics within north korea surrounding the eventual leadership transition of chairman kim jong-il. they suggest a top array of top security officials and military leaders are positioning themselves in the transition intrigue by pressing for hard line actions from threatening to shoot down aircraft to stopping the distribution of american food aid by ngos and even the world food program. regardless of motivation, north korea has been engaging in a new level of international provocation. it's urgent that the united states and its partners develop policies that are clear and consistent. we should be willing to engage the north koreans but there must be greater certainty. provocative steps will result in predictable and meaningful consequences for the north korean regime. i support a full review of

united states policy toward north korea. connect clinton has said that the administration is considering all options in responding to north korea's latest actions and i look forward to hearing additional details about this review from our first witness today, ambassador bosworth. a number of points should be considered by the administration as it develops a north korean strategy. did the lack of a strong, unified and persistent response by china, russia, japan, south korea and the united states to test provocative actions north korea's actions to proceed with the latest nuclear test? do north korean officials believe their relationship with iran or syria will be permitted to develop without consequence if those relationships include cooperation on weapons of mass destruction. what is the nature of the cargo and north korean planes and ships arriving in burma, which

is sometimes a transit point for further global destinations. russia has been transparent in its cooperation with burma in the development of a nuclear reactor reportedly for medical research purposes. is north korea contributing to the development of burma's nuclear program and if so, what way? what level of international cooperation exist to scrutinize north korea's global trading network and its potential proliferation route and can sufficient cooperation be improved? is there is efficacy and current status of agreements related to the six-party talks and the north korean nuclear program? in essence, would any new negotiations be starting from square one? the united states and china have cooperated closely in the six party process but our parties are not identical with regard to north korea. while the united states is focused on eliminating north

korea's nuclear weapons program, china's primary concern relates to regional stability. a point not lost on north korean officials. given recent provocations have prospects for more concerted chinese actions have been improved. the broadest possible base to move ahead, i encourage the obama administration officials to actively consult with congress as they proceed in developing a comprehensive north korea strategy. i join with chairman kerry in welcoming our ambassador stephen bosworth and the others to today's hearing. we look forward to their insights and hopefully their inspiration. thank you, mr. chairman. >> thank you very much, senator lugar. those are as always thoughtful and important questions you've asked and i'm confident we'll get the answers to them in the course of the afternoon.

let me do say that we have two panels today and we'll try to get everybody through here in an appropriate manner. victor chai is the former asia director at the national security council and he's a professor at georgetown university. leon seigel is a professor at the social science research council in new york and author of disarming strangers, which is a diplomatic history of the 1994 agreed framework and nancy liquor ingborg has helped deliver food aid to women and children in many parts of the country. we're greatly appreciative for their expertise being here and i just introduce ambassador bosworth. he as many people know, he's one of our most distinguished veterans of diplomacy in the united states.

served in many different posts. i had the pleasure and senator lugar did also way back -- not way back in 1986. i worked very closely with ambassador bosworth and senator lugar was then chair and worked very closely with them on the philippines and we had many philippines and we had many meetings and many visits to thek philippines as we transitioned to the democracy from the marcos regime and it was a really astounding transition and i will say again as i've said previously in public that we were lucky to have an ambassador of his skill on the ground helping to move complicated issues as effectively as he did. and it was an enormous privilege to work with him in that period and i was greatly impressed then and i think we have been ever since. we're delighted you're back on the job. this is a region you know well.

and you are the right person for this job. thank you for being with us. >> thank you, mr. chairman, senator lugar. there. i wish i had more positive news to convey. but it is nonetheless, i think, very important that westbound in the process of consulting with the congress particularly with this committee and other committees as we try to move forward. i will not repeat what the two of you have said with regard to the situation that we face and what has happened to bring us to the point we are at. i think you've each summarized that very completely and very accurately. i think i would say, however, and i've submitted a statement -- a written statement for the record and just to make a few comments on that. i would note that the international community has in our judgment reached an important momentñ for the security of northeast asia. if north korea does not heed the unanimous call of the international community and

achieve the irreversibleol dismantlement of their nuclear and ballistic missile capacity, the united states and our allies and partners in the region will need to take the necessary steps to ensure our security in the face of this growing threat. in the interest of all concerned we very much hope thatqg÷ north korea will choose the path of diplomacy rather than confrontation. we are seriously embarked upon a four pronged strategy. regional consultation, u.n. and bilateral sanctions, defensive measures and if north korea shows seriousness of purpose, diplomatic engagement. first, we are consulting with our allies and partners in asia. especially, those who have been involved with us in recent years in the six-party talks. president obama and secretary clinton have been in the forefront of this effort reaching out to leaders in japan, south korea, china, and russia.

conveying a desire for a strong unified response to pyongyang that it will suffer consequences if it does not reverse course. last week i participated in a mission to the region led by secretary of state -- deputy secretary of state james steinberg where we reiterated this point. i can say that our partners share our view that north korea's nuclear and missile threat is a challenge to the international order and a hindrance to lasting stability in northeast asia that must be addressed. we found that our asian partners agree that north korea's provocative behavior is changing the security situation in northeast a asia. -- asia. and we agree to get north korea to reverse its latest provocative steps. china, obviously, has an important role to play in influencing the path north korea follows. on our recent trip, we find that

china shared a deep concern about north korea's recent actions and a strong commitment to achieve denuclearization. our challenge now is to work with china to turn that commitment into effective imputation of the u.n. security council resolutions. second, we're responding to north korea's actions with new measures designed to raise the cost to north korea of going down this dangerous path. we're working with other security council members on a range of measures to prevent north korea from engaging in the proliferation of nuclear weapons. and nuclear technologies and to dry up the funding for its nuclear and missile-related entities and other companies. third, we are in conjunction with our allies taking prudent steps to implement defensive measures aimed at enhancing our military capacity and our

extended deterrence in the region. on our recent mission we began to outline a future plan of responses and defensive measures that the united states and its allies will take should north korea refuse to adjust course and should it continue to implement its announced plans for provocative behavior. including future missile or nuclear tests. we are committed to do what is necessary to protect the american people and to honor our commitments to our treaty allies. fourth, and far from last, we remain willing to engage north korea to resolve our differences through diplomacy. a central tenet of the obama administration's approach to foreign policy has been a willingness to engage in dialog with those with whom we have had differences. sometimes very serious differences. from the beginning, this has been the approach we have

pursued with north korea. but so far north korea has not responded in kind. on our recent trip, we made clear that the united states remains open to bilateral dialog with north korea in conjunction with the multilateral effort to achieve the denuclearization of the korean peninsula. as we have stated repeatedly, the united states has no hostile intent toward the people of north korea, nor are we threatening to change the north korean regime through force. we remain committed to the september 2005 joint statement from the six-party talks. the core goal of which is the verifiable denuclearization of the korean peninsula through peaceful means. we believe it befits north korea's own best interest to return to serious negotiations to pursue this goal. negotiations to pursue this