because i would talk to anybody who wanted to do that. but one thing i told them if you can repeal your income tax, but it's not going to get you anywhere as long as you look at the economic freedom of the world, that's public by freighter, published by heritage. what do you find in those indexes, or even the world economic forum's. they all show the rule of law and propert rights are about 40 percent of what determines a nation's prosperity. it's like a foundation. you can build a beautiful house of no income tax but if your foundation is qcksand, it's not going to help you. unfortunately, what worries me abouthat is happening in washington is that it is, it's like all over again where the people with political polls and lobbies are the ones who get the deals. and then you pullhe rug out from underneath the bondholders and what are you doing? you are creating a banana republic.

that's the difference between the united states and paraguay, at least traditionally, is that we have rules you follow and no matter how mighty you were, you are still bound by the law. but now we turned that upside down and the law is an instrument o partisan politics. and that worries me even more than higher taxes. [applause] >> i had a chance to talk with margaret thatcher out 10 years agobout my work in health reform. and she literally took me by the shoulders, and she said you must rememb the rule of law. there is nothing more important. >> next question. >> hold on. >> i'm concerned about the future and what inflation is going to do to us. w@at can we do to protect ourselves? give us some advice, please. >> well, i think that is a very

worthy concern. particularly in light of fiscal and monetary policies. i would s in my judgment as i look out and think about the ne three to five years, it would be really at the top of my list. not that we haven't talked about anything but a long list of concerns. because if we get into that situation and that causes wage pressure, and every administratiol priority does what? we have a really great this point. every one of them that we have talked about today and we talked about earlier, including cap and trade, etc., everyone of those things raises the cost of labor. raises the cost of productio that combined with this explosion in monetization of this debt by the fed is frightening. and it might make the late 70s and early '80s looked quite benign. and we don't know if there's another paul volcker in our future or not. but it is concerning to me, and can't be unwound is a question,

as a banker, i get routinely. and in a theoretical way, yes, yes. the economy grows. fiscal policy becomes more appropriate. the fed does a good job in withdrawing reserves and raising rates, but this is an imprecise world. they have no more knowledge about than you do. and therefore, you're going to have to air on the side of negative. so income proding real estate, proper amount of a commodity exposure, and income -- and common stocks. things that can adjust price. things that have the ability to hedge the dollar, like a commodity does or a multinational u.s. corporation. as buffett said last wee in "the new york times," the fate of the dollar rests with the congress. my only response was only in g.

[laughter] so every erican should be concerned about the possibility i would argue the probabili of that in the next three to five years. >> one of the things i don't think we want is a long-term creditor. because you don't want to load and long when you don't know how i inflation or how low the value of the dollar is. that undermined the ability of the country to make long-term investments because everybody, if they are low and they are loading very short-term, a decision instead of a strategic capil since looking out, they are our decisions that people are happy to make just in the moment and it undermined the ability to invest in future and be productive in the future. so along with all the other chaos that inflation causes, it undermines the ability to be productive in the future. >> first, australian dollar, swiss franc, there are several countries i think are more safe in the long run.

but i think this is one of these teachable moment. ronald reagan took a lot of political pain to do the right thing by weaning inflation out of the system in the early 1980s. a lot of republicans lostheir jobs in 1982 because reagan was determed to do the right thing for the country. i don't have a lot of faith that the politicians we have just gotten rid of and the politicians we are now dealang with have that kind of warmth and integritto do the right thing by the dollar, to go through the pain of witrawing all that excess liquidity out of the system. because when you withdraw the excess liquidity, higher interest rates. that's the worst thing in the world, politicians will say. but it is critica to get that excess money out of the system. inflation is like going to a happy hour and you have had seven drinks. you are feeling great. the next morning are not going to do great. do you think that meant drinking 10 more drinks the next day is a way of putting yourself back on

the wagon? no. that is what inflation is. it is in our product. and we have seen a country after country, you get in trouble. and the more you go down that path, the more it hurts tolean yourself up if we don't want to become aentina. we don't wanto become zimbabwe. i don't think tre is any relevance ere that we're going to get that bad, but i do think we're at the path of going back to the 1970s again. and that is not something i want. i hope i'm wrong. >> let me just point briefly when you talk about the moral integrity of politicians, which is amung. >> oxymoron. >> although there are no worse than the rest of us, unfortunately. but the best year for morally weak polyp patients is an informed public. has -- [applause] and. >> is their judgment that they can bamboozle an ignorant public and demagogue an issue that gives them the option to the

acting without moral integrity when they know better. so one of the functions of this institute and so many others and all of us here is to be educating the public. and was again, this is a moment. because if the public understand the issues they will be intolerant of the demagoguery, left, right, of the politicians. so we have another opportunity to help them find their integrity. >> can i make a point that people come up all the time and say what can i do? showing up at town hall meetings is really important. but there are a lot of petition online. we have one called just do no harm addition.org. you can find out what's going on with this alth system what we are to do instead. john from the independent institute had some bumper stickers out saying he is not my doctor. so independent institute is also out of. have your voices heard. just make sure people do know you are a form, that you are talking back. >> next question.

let's go up front here. lovely lady in the orange. >> really great to have you here and it's a wonderful essay in another random graduate on the panel as well. my question is we have talked about all these different things, but we haven't talked about tort reform. and did this to me is a huge issue coming from a medical background and so forth. i would like to hear you speak to this, and the fact that i think it was yesterday, howard dean on the other side, finally admitted one of the reasons was the problem with health care is tort reform. so i wanted to hear what you have to say. thank you. >> you know, and the thousand page bill, somehow or another they just didn't have room to do medical malpractice reform. who knew? you know, we know what the reason is. because the trial lawyerr, but

in townhall meeting after town hall meeting, that is a huge lightning rod issue. people know that medical malpractice is really one of the major drivers of costs, not the old one but one of the major drivers. and we have evidence of how you can begin to solve this problem. texas, for example, reformed its malpractice rules in 2003, 2005, fully in effect now. and they have seven -- a backlog of 7000 physicians who want to move to texas because i is a friendlier environment. this gets back to an earlier question we had about government does have a huge impact on the economy in the incident as it sets up,he disincentives this is something the government could fix, but it's not going to happen in this bill and probably in this congress. but the american people i think oupoken on that as well. >> the history of what gives rise to the need of tort reform is really fascinating to get started in the 1930s as a

conscious doctrine of liberal that because you have poor people, average people being harmed an you can't necessarily find someone to compensate the. letzig people whg have deep pockets, corporations. we will say what you are negligent or not, you are going to be held legally responsible. they will never notice a difference in their deep pockets. and so it was a conscious policy decision to try to shift the burden of responsibility. over the years, obviously, we saw bankrupting companies. we saw driving doctors out of buness because they can't afford the insurance for the liability. and so it's another example of when man tried to outthink the marketplace with a brilliant liberal idea. he sets a series of decisions that rational people make ending and up with a catastrophe where we don't have all kinds of doctors available because of

these physicians we would have otrwise profitable companies hiring thousands of people going out of work. is there a sign of their responsibilities? gas, tort rorm w a product, the need for tort reform was the product of another liberal idea. >> one more? >> one more very quick question. >> very quick answer. >> they regularly throw you into the pit with some very hard libera on cnbc, and you very brilliantly stand up for the ideals of our institute, and i thank you for that. i do have a question. letter he says that europe is reforming their taxes, some european countries are going with flat tax or reducing their business tax. we are going in the other direction, according to what you said a according to what we all know. is a true in the first place that they are reforming their tax? and isn't that going to make us ev less competitive is that in

balance goes that way? >> i was just actually talking about this before the panel. we live in a competitive global econom whether we like i or not. and when you look at corporate tax rates around the world, you look at every single socialist european welfare state, what do you find? they all, even france, they all have lower corporate tax rates in america. not only that, that obama's international tax proposal is to expand the double taxation of american multinationals that are trying to earn mabket share a broad. guarantee you one thing. maybe rich people are evil like the left says, but rich people aren't stupid. and maybe you think of these are evil like the left says. i don'agree but maybe they are. but you know what, they are not stupid. if america becomes inhospitable because of hh taxes and a bloated version of government, and companies are going to look around the world, investors and

entrepreneurs will look around the world. this is what this whole issue of tax competition is all about and they will figure it's better to create jobs in places like switzerland, hong kong, and even france over the united states. you look at all of the flat tax countries that are springing up in eastern europe. you look at this tax competition fueling, sweden. i was just in sweden a couple of weeks ago. what has wieden done? it has eliminated its death tax. with habit done that in america. were supposed to be the cradle of free tax. austria, i went to austria after sweden. have eliminated thei death tax and/or wealth tax and the account their corporate tax rate down to 25% nuclear at 39%. so we're shooting ourselves in the foot globally. one little cmercial for my supper i'm not selling a book like bob, but i have a youtube video out there. go to youtube and type in tax competition into the search. and you will find one of her

first thing is a video i did on tax competition. as a matter of fact, if you want to know about keynesian economics you can type that in. this is my new little project, to try to reach out to new people and try to give informative little six or seven minute videos on a key topic. you can learn how we are undermining our own competitiveness, and with a vomiting were going to increase, we're going to raise taxes, all these bad policies are just going to accumulate and investment, the jobs they're going to be in india and china. and what's going to happen then? the politicians will say it's the fault of the free market that we're not getting more jobs. we have to raise taxes even further. >> think you'll. regretfully we don't have 80 days to go around the world and assess all of the other nations that could be competing with us. this is the end of this conversation. you have 12 minutes to get up and come back. for what is i think will be a really fascinating conversation. which will affect politics over

the next 100 years. so take a very quick break. come back. [applause] >> to hit a case of citizens united versus federal election commission. the court will consider the issue of corporate spending on political activities and whether the first amendment protects that spending. u.k. the oral arguments at about

11:30 a.m. eastern on c-span3. c-span radio, and online at c-span.org. >> as the debate over health care continues, c-span's health care hub is a key resource. go online, follow the latest tweets, video, ads and links. watch the latest event including toall meetis and share your thoughts on the issue with your own citizen video, including video from any town halls you have gone to. and there's more at c-span .org/health care. >> on tuday the national academy of engineering released a report saying that k-12 students should be exposed to more engineering science. the nad is a congressionally artered organization that advises the gernment on engineering issues. educators, education department officials and nator ted kaufma discuss the reports findings. th is about two hours.

>> so this afternoon, we have a great group of speakers who will give us various perspectives about k-12 education. and we will start with steve who will speak on perspectives from the u.s. department of education. steve recently joined the department of education as a special visor to secretary arn duncan. prior to joining the department he served as a legislative assistant for education and the office of then senator barack obama, and advise him on policy development duri the presidential campaign, as well as worked on educational issues with the obama biden presidential transition tm. prior to joining senator obama's

office, steve was a high school science teacher in eugene, oregon. is expected with more than 15 years in the classroom at middle school, high school and post secondary schools. steve holds a phd in molecular biology from the university of michigan. so, steve. [applause] >>hank you. for the introduction. i want to thank greg for inviting me. seems like it was only couple of months agohat i taught at a workshop about the subject about k-12 engineering education. and i've been arrested, i excited to talk again today. i am a little nervous bebause i hear you just heard the president speak.

and it's always a very difficult to speak after president obama. i will give it a try. so if i can figure out the technology. okay. and so greg, two weeks ago set me a preprint or a copy of the report before it w coming out and aspi to come and talk for about 20 minutes about prospectus from the department of education. i may be the only person or one of the people at the department who saw the report, some of these pepectives will be relative personal based upon my role in thinking about education at the department. and whenever i talk on behalf of the department had to start off by saying what we have really been thinking about is not so much engineering education, but large number of other issues about education. i want to go through those to set the groundwork for thoughts

about education reform and what is driving that. specifically, i will talk about about race to the top. it's kind of an opportunity. i will talk about an overview of stem education and some of the things the president has said about that, and in some comments about what i saw as i read through the report. so over the past six months, or moreas secretary deparent of -- duncan has been at the education. we have focusedn four areas of reform. i want to bring those up just because eventually the framework were i think a lot of the thinking at the department abo what's going on and how this might drive stem education. so the four areas of reform,

adopt rigorous standards of prepare students. second piece around effective teachers and we can have reform without making sure that teachers, educators are prepared to teach students in the best possible way. especially in the classrooms where those teachers are needed most. we know there is a great inequity and distribution of effective teachers. to reform area, you don't have to write all this down. the data system tracks students a window how it's happening a where it is happeng and how to make things that are. turn around low performing schools. so these are the four reforms, the four assurances they have gone under various names at various points in time. but really these four things, standards and assessments, teaching, and school airship, building data system to track student progress, and to track

teaching effectiveness and turned around low performance schools. it really those four things that have driven i think a lot of the thought of refo at the department. throh era there was about $100 billion associated with education. a huge amount of money. and part of this was what was called the state fiscal stabilization fund. so states had to apply for this money, about $50 billion, and as they were competing fkr the money th had to address those four issues, those for reform areas. and now there is an addition to the state fiscal stabilization fund there is this money called a race to a race to the t of which has been in the news aot recent. again, that stresses those four areas of reform. and the race to the top is about a four and a half billion dollar fund. for more information as i said you don't have to write this down, there is a very fancy

website. the department over the weekend apparently unveiled their new website, andart of this is linked to the race of the top fund, and if you go here and we'll give you all sorts of information about the race to the top and about the four surances that all sorts of things. so i would like to talk specifically about within e is large font called race to the top. secretary duncan tal about this as the moonshot of education reform. this is an opportunityo drive a 12 reform through fiscal policy incentives to the states and incentives. this is a bigger discretionary fund for k-12 education that all

eight previous secretaries of education combined had over 28 years the department has been in existence. this is a really significant amount of money to drive reform. remember that reform always be focused around those four areas so it's really important to think about that and keep that in mind. i want to talk about race to the top just because there is a very interesting opportunity here. recently, there was a notice published in the federal register, an invitation for public comments abouthe rules for race to the top. comments were due a week and a half ago was the closing date, august 28. people are now sorting through those. states are the eligible applicants. at least have the money will flow to the states and the dissipating district. there are two phases of funding. so the first applications will be in late 2009. and in states that need more time to do this, there will be a

second round of funding. and the draft criteria specified the draft guidelines specified 19 different criteria. again, focus on those for reform areas. so i would just mind what those are. standards and assessments, teaching, data systems, and low performing schools. a couple of these have pretty direct implications or direct applications or stanfield. the extent to which states address these criteria will give them a competitive advantage or disadvantage. this is an open competition for the states. and one of the things that are interesting and this is that as a proposed application there is an application that needs a priority made favor over another question that is not. is one competitive preference priority.

that priority is emphasis on science and technology, engineering and mathematics. [applause] >> i will pass that along. so what doeshis mean? are states going to get inlved, our district going to get involved or how our applications going to be together to look at this? to scrutinize this? so i realize this is very all print on here, but again, from the proposed priorities what does this mean? an emphasis on stem education at the state level. so there are several things here, rigorous course of study. cooperation at the state level with stem capable community partners. so those could be industry, museums, universities, research centers. and preparing more students for advanced study in careers and sciences, engineering, technology and mathematics, including addressing the needs

of underrepresented oups. so there is a clear focus on expanding access into thes fields. so again this is from the federal register notice of the proposed priorities. so stem. i understand you have a discussion this morng about what it means. it's not just a word. so i just want to mention a couple of comments that the president made in a speech at the national academy in april. where he set a goal for stem education in the united states. this is what he said. american students will moverom the middle to the top of the pack in science and math over the next decade. he didn't mention engineering here but he also, in the speech, he urged people at the national academy to think aboutew and creative ways to engage young people in science and engineering and an urge of people to create, build and invent, to the makers of things. that is, to be involted in the design process in addition to

the scientific discovery process. so it's kind of in that light that i took a look at the materials th greg sent me and just pulled out some kind of idiosyncratic things that kind of stuck out in terms of how we might thini about stem education. this is a big discussion now because there is a lot of -- people are going to have a lot of skin and again about stem education. the president is talking about. almost every time he talks about education he talks about stem education. the race to the top has this large proposed priority for states that are making progress in this particular field. for states that are building frameworks and partnerships and infrastructures for improving stem education specifically. when i came and talked in general one of the things i mentioned is that as things are moving, the realization, there are lots of things moving. there is lots ofoney on the table.

ere is discussion about common core standards and math in language arts right now. those things are moving. there is a discussion about stem standards moving through the work of india, ccs, achieve and others. there a real rethinking of how teaching in this field. so it's really interesting and important that you are doing this work down about h to engineering folded into this thought process. so this is just how pulling something out of what i sought in the report. and i read it with a very spector die i guess there but there are thr questions that were posed. what are realisticnd appropriate learning outcomes in engineering. how might engineering education complement learning in other areas. science technology and math. and how were those areas complement engineering. and what might, what are the policy and program issues. the threenc