making the slowdown much more protracted than need be. >> making the slow down much more protracted than need be. thank you. >> thank you. i would like to just conclude by trying to make sure that we clear up for those who might be listening the gross debt publicly held debt, then we got into unfunded liabilities which is a third category. so that we don't leave that confused in the record or confused perhaps in public mind. the gross debt is all of the debt that is owed by the federal government to all of the entities, publicly held as well as to the trust funds, medicare, social security. for example. the publicly held debt is just that debt that is due to the pub lick. that doesn't count the debt to the trust funds. the unfunded liability is still another concept that looks at

the differences between the promise that is have been made in legislation versus the revenue streams that go with those spending commitments. that is a more future oriented look at where we are headed. and the unfunded liability of the united states is in the trillions of dollars. and the biggest part of that is medicare. medicare is the unfunded liability, my memory serves me correct, in medicare six or seven times the unfunded liability in social security. so they are three separate concepts. the reason that we were focusing here i think, i can't speak for senator sessions, but we were talking about that as from a budget standpoint. from what we have to deal with. we have to produce the money in this committee to meet those debt obligations. both the publicly held and the

gross debt. because those obligations to the trust funds are backed by the full faith and credit of the united states. they are real obligations. but they can only be funded out of currentok resources. so when medicare's cash negative, social security's cash negative that has budget consequences. we are the budget committee. i know economists like to look at publicly held debt. dr. rhine heart -- reinhart is demuring. but we have a special obligation to our colleagues to deal with the revenues that are going to be needed to meet these requirements. not only of the publicly held debt but also the gross debt, the obligations to the trust funds. and that has significant budget consequences.

we have been in this long-term period where the trust funds were producing more money. there was more money coming in than going out. that has been a very happy circumstance. that is all changing now. and i think when the changes occur that it's often least recognized. it kind of gets missed by our colleagues. this is going to have very, very significant budget consequences. it's important for our colleagues to know that and it's important for those who are watching to understand. let me just -- >> follow up on that. with regard to -- the way we account for the money in our government allows this confusion to continue. it was very dramatically revealed to me, and i didn't fully understand it until just before the final vote on the

health care bill, president obama submitted a score from the medicare that said if you raise medicare taxes and you cut medicare benefits as they propose to extend the life of medicare for nine years, i believe, i think -- as it was stated, that is a true fact. but in the report from the c.m.s. chief actuary from medicare, he had a little parenthetical and it said, but of course you can't simultaneously use that money to fund a new program. and also extend the life of medicare. all right. but the c.b.o. score, dr. marron, you used to be at c.b.o., the c.b.o. said that you could. because the c.b.o. scores does not score internal debt. and so the president also used

the c.b.o. score to say that he could fund his medicare program and extend the life of funded new health care program, extend the life of medicare by nine years. and he had a c.b.o. score that agreeed with him. and basically what -- they don't score the internal debt. so the -- you had an increase in revenue out of medicare and it was spent on the health care, new health care program, and it didn't score as increasing the debt. where didi] the money come from? it was borrowed from medicare. a debt instrument shows that debt.

>> i said let's create night patrols in newark. and i said let's bring together a whole bunch of folks and invite them to come and sit in cars, private cars, which you rented, and with volunteer police officers, firefighters, and just drive through the most dangerous streets at the most dangerous time. we did that from september until the end of this year. and we have virtually no instance of gun violence during the most dangerous hours in the most dangerous places in our city. because not of the mayor and not of the please do what they're

doing, because residents stood up and did not control. if you go to my youtube channel, it became so popular that we got well over 1000 references from a woman in a wheelchair that's coming out taking buses to get there, to 6 67 euros. we had christmas party, annika parties, gathering in the garage. then we went out into the street. we got soap opera, people as far away as california came out, sarah silverman came out and did not patrols with is that it made a difference. i don't know what your strategy is and what's going to work in your city but the point is we can always do more, because 46% reduction is really wonderful, but we have a senior citizen does your already that was shot and killed by a stray bullet. i'm sorry, 55 year-old woman shot and killed by a stray bullet. so one shooting in an american city of an innocent person is way too much. we can all learn from each other but there are two things, daily

discipline analysis of the numbers holding everyone to account within the organizations that you control, and in the second thing is bringing people together who are not used to working together, whether it is law firms, whether philanthropists, or whether community members. and if you're willing to do the things other people will not do you always get the results that other people don't get. it's as simple as that. of the questions? yes. would you like to recite a bible verse or two? [laughter] >> my name a janito a i grew upn paterson. what i know strongly about newark is there a lot of resources there as far as for young people. going to school in paterson, i was 16 years old and i used to come to a whole summer, back and forth between the two cities, patterson and newark. for summer programming. and i was just one in newark

now, is there any work to expand and connect with young people in and around newark to those things like summer programming, engineering? keeping them engaged outside of school during the summertime that would then help with those issues of young people ending up in cars read because they are bored, whatever, because someone is there any workaround the right now? >> there's a lot of work around. every body knows the truth we would need police officers ever took care of our kids. it's much easier to build young boys that it is to repair broken man. and so that's should be the real focus, and not in the front and. in building programs that serve our youth. we are very active in trying to find answers. one of my second term big ideas is going to be focus on those kids, sort of 10 to 21, that are

at risk or sort of really facing challenges. this affected you that i think is a term most folks are using these days. youth bill, alternative high schools, if we can start with partnerships. whether it's focusing on our juvenile lockup. i visited some amazing people at a new york facility called rikers island. and amazing people -- [laughter] >> i'm telling you. amazing people trying to change day statistics, 80 percent of the kids that were leading were coming back within one year. that's crazy, 16-year-olds, 15-year-olds, that was their lives. we decide we're going to start a program for kids coming out of incarceration for the yes program. youth education employment center. so the ridiculous in our city that we used to see his 13,

14-year-olds, the kid gets released and it we don't think with anything else to do. they can't now has to navigate all of these programs that might be out there. and a silly fashion they had to leave the city to meet with a parole officer, probation officer, they have to go down to two cedar street, to try to advocate that bureaucracy. so we just created the yeec center. so again, the ideas are out there, it's just setting clear values for community. this is a great thing for leaders like yourselves. if you get a small group of people together to save what is important to us? we said we're going to try to set the national standard in public safety, and economic empowerment. don't talk to me about anything else. i'm concerned about other issues and i will try to do my best, but as mayor those are my three values, those in reforming the

government that i run. so that's a simple thing. i know i am answer questions too long, but i went to a city in the south, was asked to speak about some of the success we had. the very first what i said was simply this. i said i want everybody in this room to close their eyes, and then at the count of three to point north and do it slowly so you don't smack the person next to you. we did that exercise right now inevitably open their eyes, there would be giggling because for every person in this room there would be a different direction in which reporting. so so there very few americans who don't want to see the nation advance. but in cities where are all pulling in different directions. how can we better coordinate and get information out to people in our communities so that mother who is working two jobs, because in new jersey when you work two jobs come to make twice the minimum wage. so that mother that's working two jobs or that grandmother

because in newark in america we see almost double-digit percentage of kids being raised by their grandparents. so that they are aware of the array of services available to them. those services are coordinated and that we're doing analysis to find where the gaps are to create new organizations. [inaudible] [applause] >> if i'm a sense i get to ask the last question, i'd like to ask too. [laughter] >> the first question is, you said one of your missions is related to public safety. unfortunately in america where the population of people have been released from jail called sex offenders. i know they literally have no place to live because no community wants them. and unfortunate as a people we don't talk about that part of

the relation. the first question is in newark, what specifically is newark going to address that issue? in terms of success, tragic. the second question is a bit easy. it is related as our president talks about voluntary and pushes everybody to serve, what is newark doing to him brace that initiatives be? neither of those are easy, but really quickly. so that to me is one of our key issues. you have thousands of people coming home every year and 60 to 65% go back to prison. which in and of itself is bad. we're paying close to $50,000 just to incarcerate them, the cost of, place place and so on. people forget that in order to go back to present their often committing crimes which have a impact on neighborhoods and the hearts of people. so we set up an array of programs that we have been working at this for three and half years since i've been mayor in trying to set up a network of

programs so people can plug in when they come home. our programs range in everything from mark pro bono legal services that we're providing, all the way to a fatherhood program that we created because we saw the kids most likely to go to prison or the children of incarcerated adults. so we went out and falls a model. and we created an amazing, my favorite program every newark because it not only has an amazing rate of giving people hope, it's cut recidivism to under 5%. in the first two years is less than 5%. what's amazing to me about the program, but i can't forget how to measure it yet, is to see the powerful way these men are connecting with your families and mother of the children. the men were not present in the lives of their kids. so it's programs like this that give me hope but it's all about mission. we decide we can just have

disproportionate programs. we have to have a system. this is what we call in pir. new york prisoner initiative. and worst thing is that and we have partnered, by the way, i am very much reject in america this false divide called left right, republican democrat. it's absurd. it's debilitating to actually solve problems. so on a local level i don't have to worry about that stuff. we brought the manhattan institute together, which is a think tank and we brought left-leaning folks together to create a coalition around this issue. everybody seems to understand it. and so we been able to get funding from a lot of republicans who are interested in this. one of the things george bush did before he left was give us a very large grant to this program to study its effects. so you can go online. i often publish things on my facebook page, on twitter. it's a very big issue for me that every single day i deal

with. yesterday was a great day. two people greeted me, one guy that we fought like hell who runs her prisoner reentry program to get outgoing governor of new jersey to pardon, thank god he did. and the other guy was a guy who was angry with me because he'd gone into our program and still have not found a job. we have about a 20 to 25% recidivism rate which is below the 60 to 65, but every guy is not served and we have to continue to get better. the service issue to me is really a hot issue in america, thanks to our president and a lot of people in media. this i think is the chance we have as americans to do things ourselves again, if we can find ways to effectively leverage the power of goodwill. most americans actually want to see change happen. but they often don't know how to plug-in. and often if they plug into the people they plug into don't know how to did a few simple things that can sustain that

volunteerism, recognizing volunteers is very important. anybody who volunteers wants to be appreciated. finding ways to communicate the needs and match the needs to the volunteers. so we are studying that problem right now. one of the guys who gave you my best political advice in my life is michael bloomberg and he said corey, you should become a billionaire first and then mayor of a city. [laughter] >> but god bless michael bloomberg, started the service of city campaign. we're not going to have a service officer on my staff that's going to be analyzing this problem. i have a meeting in my office just to talk about service yesterday. we want to create a process online and off-line where somebody can go to a newark website, lovers of newark which are all around the country, and see that i want to volunteer for a day. here's a place you can go and just pick up a paint brush and paint, or you can go to our

animal shelter and help do this. i want to volunteer for a week, i have a group in my office. we want to start reading and easy way online to create volunteerism, and have off-line components as well. we are thinking about reading three days of service in our city to celebrate more, 9/11, martin luther king's birthday, as well as maybe a back to school type event. so we're thinking very strong because i've seen tonight the trolls and senior citizen police academies, that if we can leverage the energy of folks we can create a transformation. that's sort of the last thing i will say, is really on that point. we are the united states of america, and we are not women are today because of elected leadership. there have been phenomenal elected leaders in this world, not all change, all change in the country has happened on the grassroots level out. that's really where our power is. politicians lose elections because they can't connect to

what's going on in the street, but i'm hoping that all of you as leaders don't forget that. that if you can find ways to bring people together, you can manifest, transformative revolutions by focusing on the granular important issues. and i will end with this quote from a great woman, made i will paraphrase it, there was a great author, alice walker who wrote a book in search of my mother's garden, and she had a paragraph into which she talked about black revolutionaries. and she says in that, i paraphrase, the real revolution is always concerned with the least glamorous of things, about educating a child and raising his we know from third grade to force. about filling up food stands for the elderly because they have to eat, revolution or not. it's about being close enough to keep your date to always be there for them when they need you. this is a true revolutionary seen in the most simple of things. and that's what i hope we can all live as we go forward. thank you.

[applause] >> i suspect everybody in this room will remember, at least one major nugget. the do something, as i think something utah is today. so god bless you with great leadership, great a competence, but with great devotion to doing e right things right. thank you so much. [applause]

>> no discussion on the applications of government assistance on the future of financial institutions. panelists, including bridge conservative party leader david cameron, look at how banks have fared after receiving government aid. this is about an hour and 15 minutes.

well, good morning, ladies and gentlemen, and welcome to this panel on government assistance and where we go from here. and i see people are still coming in, but the time is short so let us begin. i think the theme of this panel, i think, is a reflection of the extraordinary period that we have been through. and in some sense, are still involved in. in which government has intervened in the private sector, and intervened in the economy and really extraordinary ways. certainly from recent historical perspective. government has but massive amounts of capital into the private sector. it has established ownership stakes in many companies, and it

has been involved in intervention quote unquote in a variety of ways that are really a break in a long-term trend. we've had a long-term trend and a less involvement in the economy but that trend has been broken, often with discomfort on the part of governments that felt that they were really required or compelled to take this action. the question we face today, as the economic crisis is certainly not over, but it is updating and there is a return to more normalcy normal say, whatever that means. the question is where do we go from here? what assistance should government be providing going forward? should we go back to the previous model? this just being a temporary introduction, or to break in that model, or is there some new role of government assistance

that we should be pursuing going forward? in order to discuss this question, we have a distinguished panel, and you all know who most of them are, but very briefly we have montek ahluwalia who is the deputy chairman of the planning commission of india. dominic barton, the world managing director of mckinsey and company. john evans, the general secretary of the trade union advisory committee to the oecd, a trade union leader, distinguished trade union leader. david cameron, the leader of the conservative party in the u.k. andrei kostin, the chairman and ceo of vtb bank in russia and a distinguished banker. peter sands, the group ceo of standard chartered bank, and last but certainly not least, jean-claude trichet, president of the european central bank. and attacking this topic with

such a large and distinguished panel, we have divided the topic into really three broad areas. and we would propose to proceed through those three areas as follows. first, the focus will be on the financial sector. that's the area where perhaps the most government assistance and intervention has taken place. what next? what should be governments role in the financial sector, should the involvement the wound down, in what way, how, where do we go from here? second, the corporate sector. government has ownership stakes now in many companies. and again, what is the path forward, how should we rethink or restructure those stakes? and then finally and in some ways most broadly, the whole issue of economic and job

growth. we are in a relatively fragile recovery growth is perceived to be slow in many parts of the world, we have lost millions and millions of jobs around the world. what should government be doing to assist in jumpstart economic growth and job creation going forward. so let's start with the financial sector and let's start with mr. kostin. in terms of government involvement in the financial sector, where do we go from here? >> thank you. i think that's crisis showed unprecedented involvement of the government and the financial sector, and also unprecedented levels between a financial banking community and the government. president reagan once said that the most terrible words in english as i am from the government and i'm here to help. [laughter] >> but i think during the crisis that's the question, which most

of the financial institution were glad to hear. and most of the governments made it, i think, pride eight a janitor in -- quite a brave about that i would like to underline there was a very high level of cooperation between financial sector and and the governments. unfortunately, it this. of cooperation was lost over the last two months probably come and we definitely see a growing concern among banking community that the government is not quite correctly understanding the financial sector, they're not quite correctly addressing this issue. and they are probably extremely harsh criticism on bankers, their activity, their position. though generally of course banking community understands the necessity over changing the system, changing the regulatory

rules. not necessarily by more regulations, but rather better regulations. and more probably efforts to have the regulations on the international level to control the global international institutions. i think if you take russia, for example, i have to say the situation is different. because we still enjoy a very good, understanding between the government and the financial sector of what steps should be undertaken in order to reach an economic growth. and i think there's a public opinion is quite -- well, reasonably good to russian bankers. now, what's going to happen now after the government spending a lot of money and sometimes even involved in a financial institutions which was unthinkable in the united states, for example, that the

american government would buy stakes in leader american banks. i think in a midterm and long-term wrong, i think the role of the five major sector will be diminishing. because i don't think that is a strategy, either in united states or in europe or in russia that the government should keep the controlling or even the big stakes in leading financial institutions. you see in america, the banks are trying to return whatever money they got from the government. i'm quite sure the british governments, how to privatize whatever assets they acquired during the crisis. and russia that's the same. i think there is no political decision that the government should necessarily keep the high stake or high role in the russian banking sector. i think where the government concentrated definitely and trying to have a bigger say in controlling and actually the financial institutions and

financial sector. if you remember before the crisis there was a trend that the largest break was claiming that the large institutions can supervise themselves, that the regulations can be organized on a different basis. i think that's the end of the string. i think now we're coming back to a stricter control of the government and the creation of some kind of international bodies, with a national average of the global regulation of financial sector. >> peter sands? >> i think the relationship between banks and governments and by extension society, has changed so none of us will kid ourselves that will go back to the way it was before crisis. which is not to say it will be the way it is right now, but it is definitely going to be of different and before the crisis. there is a set of issues which are around undoing orb

extricating or exiting the emergency measures put in place put in a crisis as andrei was talking about. but i want to focus more on the broader issue of the relationship of banks to governments and society, and that includes banks which took no help whatsoever. because i think that has fundamentally changed. and i think there are two aspects to this. one is the relationship with central banks, supervisory relationship. i think we're in the process of looking out across that new relationship. the discussions aren't necessarily easy. some of them are very technical, but there is an acceptance within the industry and there is a common language and understanding of objectives between regular central banks and bankers. we need better regulation, we need more capital than we had before the crisis.

we need better liquidity regulation. we need to address the too big to fail problem. so there's a common set of understanding. and i think increasingly a very constructive dialogue. so i can see the way forward as a how we craft a better relationship there. the more challenging strand of how banks and banking and bankers crafty new relationship with governments and society is on the political side. and there, i think, is a much more challenging to see how the parts unfold and how we get to a better place. i think banks have not helped themselves at all. as an industry we have managed to be simultaneously tone deaf, shooting ourselves in the foot, insensitive. you can think of lots of metaphors. i also think some politicians haven't been helpful, sort of broad scale, demonization of an industry that actually is filed to economic growth.

it is not necessarily terrible helpful in looking at how to construct a better relationship. so in short what i think is, i think on the technical regulatory side, there are many tough debates to be had. many tough decisions, but i can see it happening. on the exit from the emergency measures, again some difficult issues but i can see it manageable. i think the primary challenge for both bankers and politicians is to address that, that broader relationship issue, which comes down to buyers, comes down to the whole fundamental social purpose of banks. and that i think we are -- we haven't done well. absolutely banks have not played their parts properly, and that's the one we need to grapple with. if i could just have one more complication, the trouble is we can just track individual solutions for individual countries. the solutions we work in this relationship has to work both at the level of an international --

individual country and at the international level. because like it or not we've got a globalized world and the global financial system. >> mr. trichet, you're a central banker, what is your perspective on this discussion? >> first of all, i would echo what has just been said on the amplitude of the public involvement in the recent period. it is currently, i have to say, under estimated, in my opinion, that we were very close to a depression, a full-fledged depression. had not, as you just said, dear friend, the central banks on one hand and governments on the other hand, step in to avoid what would have been a catastrophe. the central bank did things on both sides of the channel, on both sides of the atlanta atlantic, everywhere in the world that were unthinkable before this crisis erupted.

and a governments put on the table a level of taxpayer risk, which was necessary to avoid the depression. that represented on both sides of the atlantic would all competition is made, option, the option of guaranteeing the loans of the banks, the impaired assets options and so forth. i arrived 25 percent of the gdp on both sides. it's surprising that finally it appears it is approximately the same amount. gigantic amount, which very fortunate, of course, because we are succeeding, will not be transformed in spendings of losses. but is an order of magnitude of what was necessary to avoid a collapse of the system. so that being said, where do we stand now in terms of the big

authority involvement? first of all, i have to say and i ask again what has just been said, we have a global problem. we could see that a single event in the u.s. could have immediate, within days, dramatic influence in the process all over the world. we have to find out global solutions. that's absolutely clear. and we're fortunate, if i may, in this difficult period, because we have a consensus of the level of the world, consensus on principles for instance, that market will remain the best way. that is a consensus on that. there's a consensus of the fact that global financials appear to be fragile to an extent, an extent which was under assess before. and that we have to make the system much more resilient. we have a consensus of the methodology. when a consensus on global

governments, the g-20 are to have it around the table, both at the emergency world and the industrialized world. and we are working, i have to say very actively now, to try to make global finance much more resilient. which means assets had again, better regulation. not necessarily much more regulation, but better regulation. because there's one thing which is absolutely clear, the public authority will not be forgiven if they don't care for the system to be much more resilient, much more resilient. which means that we have to improve everything, in my opinion, not scapegoating any part or person of the system. again, i would tackle, the scapegoating is when you scapegoat one part of the process, banks or accounting rules or whatever, then you forget the other. if we have to improve everything, including of course

the risk management of banks and behavior of banks. but not exclusively banks. everything. and let me comment conclude on that, we are working very actively, a lot of ideas are examined. the g-20, the financial stability board does a good job. the basel community is working extreme activity, and all other groups that we have at a local level, we have to maintain this level playing field. we have to be absolutely sure that we will find our solution at the global level. if the solutions are only local, regional, continental, national, it is a recipe for catastrophe. of course, i a labyrinth no more because we have another side of the coin at the global level, which is the policies within the

g-20 but it's another story. >> david. >> thank you. it is a danger we are always going to be a greedy for each other and double will not make much for a debate. but i want to strongly agree with what both peter and jean-claude have to say. first, i think it's right that we must base our response on hardheaded, practical, self interest, and not politics of india, not scapegoating. i think that is and crilley important. that is important as peter said for politicians to understand. i just wanted to draw out what i think two lessons, one on the point of regulation that jean-claude is making and one on relationships that peter was talking about. on regulation, i think the u.k. experience i think shows it's not so much an issue of quantity of regulation, it's the quality. but as well as quality it's also the authority of the regulator. and the clarity of the regulatory structure. and that's why our view is that we need to change the regulatory system to end the so-called

tripartite of developing three different players in it and invest much more power and authority in the central bank. we think central bank has that, is the best place to put the natural authority and discretion that you need an good regulation, rather than believing you can write a perfect set of rules. if you look at the u.k. experience where there was such a problem, excessive leverage, i think greater centralization of the bank of england would have helped on that. on the issue of the relationship between politicians and banks, society and banks, i think peter is right. it does need to change quite fundamentally because what has happened. when i think about is quite simple, which is the banks now know that the taxpayers will not allow them, rightly, to go because the risk of the economy, the depression rather than recession is there. and i think it return the taxpayers of the government is quite entitled to say to the

banks, that means this relationship needs to change and some of the ways. that's what i think the two things, to the things that president obama said, we particularly welcome, one, there are things at the very risky as in, the large scale trading that shouldn't be back by retail deposits. and the second thing perhaps controversial for a conservative politician, is as we look at how we create a more robust system, a more resilient system for the future, the idea of some sort of insurance levy, both to pay for mistakes in the past but to protect and enhance our system for the future, if they can be agreed internationally we think that is something that is very worthwhile. that's reflection, and reflection of a change of relationship given all that's happened, given the relationships and how it needs to work in the future. >> mr. evans? >> maybe just a point on before they the banking sector, i think would be wrong again but in this

room would underestimate what was she said talk close to a total meltdown 18 months ago with the financial system which would have sparked a major recession. and it was essentially the government, the coordination which actually pulled the patient onto life-support when it was about to have a fatal heart attack. i think a patient is due on that life-support system. and i think it would also wrong to underestimate the degree of anger which certainly and organizations i represent you feel when you go to meetings with groups of workers, people have lost their jobs, homes, their pensions at that situation of what went wrong. so again, perhaps unfortunate for this panel, but disagree with what's been said, the idea that governments now can walk away having spent trillions and say okay, voice, get on with it as it was that it's just on the go the accountability how the system works and is future and

to ensure that that does not happen again and would have a financial system which returns the job of supporting the really gone and not the real economy just supporting a speculative bubble seems to be -- it's unthinkable that governments public policy could move away from that responsibility. >> so what are the key elements of that new responsibility? >> i think one thing, the of the message i hear is that in the discussions around the new system, and we watch very closely and see discussions and the financial stability board and many of the areas we are in. my message would be open the process up. the people i represent say, look, these are the people who brought the crisis. jean-claude may have helped solve the crisis but it seems being bankers, financial risk were responsible in the first place are now designed the same system which is supposed to prevent a future crisis. i think you have to have a stay-at-home approach engaging all the interested parties about where the bounce is and what about between it is. was about between ownership is,

break up the public banking sector as well as usable units. and beyond that i think you have to have a structure which is built to the also public and not just to the financial sector. there are different ways you do that in different countries. i certainly believe you need to coordinate that to avoid arbitrage internationally. but i think that has to be some of the gender rolling out in the future on the financial sector. >> mr. ahluwalia? >> i am not a banker but i'm coming at it from a government sort of perspective. in one respect we have been fortunate in india because the director government assistance to bail out banks was not an issue. banks are very conservative the road and were completely stable. so we don't have a problem of how do we handle all the special assistance that's been given. the larger issue of what's happening to the regulatory

structure is clueless something very relevant for us. i'm in, train a 12-point out that a whole new regular structure is being worked out in the financial stability board. we participated in. in fact, the expansion of what used to be the financial stability forum into a financial stability board, which includes all the g-20 countries is an important democratization of the way in which banking regulations going to be done. so we are participating in that. and i think the real issue for us is going to be questions that would be raised and are raised at home. and you know, in the life of the fact that the global financial system, rather the financial system in industrialized countries is now seem to have been engaged in too much of risk-taking, too much of a free for all, too much of a market knows best sort of ideology, which is now changing. what does this imply for our point of view? i think our view is that we've

been fairly conservative. we were nowhere near the front years of this kind of financial innovation. and our strategy then was that we should gradually move to what is the consensus on good financing. that consensus early change there would be less of the innovative free for all activity. but we are so far internal to the frontier that we will have to keep on moving in the same directions. so i think we have to persuade our population, public, et cetera, that even as the industrialized countries appear to be shrinking, we may well be expanding the scope or liberalization in the financial system. that's what we've been doing. we've been saying that. we've been introducing new instruments and giving a clear signal that financial liberalization is necessary, is going to continue, but it will now be targeted to reach the end result of whatever emerges out of the fsb as a regulatory structure that make sense that all of these issues, too big to

fail, how much innovation, leverage caps, all of us will get built into our own structure. but we are fortunate that we were nowhere near a position where we would be directly affected. so we escape from the financial crisis with a financial system that was whole and didn't really require very much government assistance them other than short-term liquidity support in the first six months. >> so this is not an excuse to back off of liberalization speak was definitely not, in my view. >> mr. kostin, and russian as well is this going to be an excuse to stop progress toward liberalization speak was not at all. though i have to say that russian financial system just like and differs very much from the western, and so if he said the bank should give loans to real sector rather playing the stock market and that's exactly what russian banks were done.

that's exactly when the threat for us came from because when the real economy started to perform well, then we have the problem of performing loans. i mean, i would say that yes, we have a different situation and for us the financial sector was maybe not as serious in the west. though we also understand that we already part of an international community, and we very much depend on the international capital market and the national debt markets. so for us, there's no way back. and that's important that when we talk about regulations now i think it's not important is a lesson in 1930s there were legislations adopted in the united states. let's come back to the legislation and then we'll have another 50, 60, 80 years of comfortable life. i think we should really build up a new system of this. the concern of the banking community is if we create too much limits on this comment too

much supervision, that the industry itself will not develop and not be producing enough funding for the real economy. there will be no economic growth without the financial sector. so not over till. that's i think very big concern among banking community. >> we're going to make a transition, sitting here and maybe perhaps a final comment on the banking sector, and the government involvement in that sector. >> i think by now everybody and davos has had their fill talking about making. i will make is one closing comment. at the heart of much of the debates around the future of the banking system and the regular free trademark and so on is a trade off between how safe do we want the banking system to be. so minimize the risk of another crisis versus how inefficient or ineffective we want it to be in supporting the real economy generating jobs and so on. there are many things we can do

that pursue both objectives. we all want both objectives, but there are also some trade-offs between those two objectives. and we need to tease those out and understand those. and that is something that i think the bozzo community, other people is working on and is very engaging. but also thank you your comments, is isn't something that should be just result or thought about by democrats, bankers and so on. so the state is very whole is ridiculous we get it wrong, one way we run the risk of having another crisis. ever get it wrong the other way, we run the risk of starting the real economy of enough credit to capital. and then not having the kind of recovery, the kind of job creation that the world needs. so it is a very high-stakes game. >> that's a great segue, peter. so this discussion about the financial sector and regulation and banking is a mature discussion at this point. we've been talking about this

will a lot for the last 12 months, and especially for the last six months. but then of course there is the real economy. there is the corporate sector. there's the businesses that have to create the jobs that are going to replace all the millions and millions of jobs that were lost. and is a great concern about how quickly that process restarts, and how many jobs are created. and there is great concern that there is not job creation will be too slow, and it will be years and years and years before we recover. so you are starting to hear new discussion about what government needs to do to stimulate economic growth, what government needs to do to create jobs. we hear all kinds of schemes floating around in our country, the whole green jobs movement is, you know, kind of a very hot thing. that is green jobs are going to say this, there are many other

discussions around the world. and in government, of course, still have some ownership stakes that it picked up in the economy in a variety of industries for emergency reasons, like in our auto industry. so dominic barton, could you live us into this discussion. where do we go from here, what should be the role of government going forward, in trying to stimulate and enhance economic growth and improve job creation? >> i think a couple things i would say at the beginning is there's no doubt that government has increased its role in the economy. i was a industrialized economies in some countries by up to 10 percentage points of gdp. in many emerging market is going the other ways that we have seen less involvement, and i don't think that will switch back. is moving that way but certainly the government more involved. i think there is a worry from the corporate sector, that you can have -- there's good government and bad government,

or choose a terrible analogy, there's good cholesterol and bad cholesterol in terms of how you move it through. i think the view of government picking winners, or the government trying to decide where jobs should be created and how they move, i think gets people concerned. what i call soundbite policy analysis, the pressure that governments under to make decisions quickly and was a really complicated long-term issues, i think worst people. so you mentioned the green growth side. when you actually look at on the u.s. side of things, it seems like a great opportunity. when you look at potential job creation, its relatively small. it's less than 1 percent of what could be there in terms of the other picture. when you look at those jobs many of those jobs by the way in solar may be created in china. not in the u.s. the you need to get a more granular look. when you look at the good government involvement, i think that involves both the private

sector and the public sector working together to figure out what these problems are. i think we need more long-term policy, and cooperation together to do before. just to give you some examples i can from the emerging markets. if you look at what china did with their indie our see which is a more long-term vehicle, in terms of thinking about what economy is going which involves private sector people, they realize if you want to create jobs and give a stimulation program, perhaps one of the things you have to do with is the health care system, which is broken. you're not going to get consumers to save less and less, you have a better health care system. so be able to parse that and dig it down is quite important in coming up with those solutions. the singaporeans with economic strategy committee, again, you've got a mixture of government, private sector, academics. there again, thinking long-term more through cycle views to work on the opportunities and issues that i think where there could

be real opportunities. so i hope we can move to more that type of a model, little more long-term perspectives looking at the fundamentals and trying to all contribute. because with whatever 34 million jobs that have been lost in the last 18 months around the world, it is in business interest to help figure that out. but it will take business and government working together to work on some of those issues. >> well, strategic thinking is a great idea. and both of you and i agree on that. perhaps we to turn to david cameron. what should government be doing to restart economic growth to make sure those jobs come back? domenick says we need to work public-private sectors together, be thoughtful, be strategic, take a long-term perspective. but of course, there's a lot of pressure to do something. stomach i think the first thing is we've got to make sure we learned a right lessons from the crisis. one of those come it wasn't the

free enterprise system as a whole that failed. it was a financial bubble that caused the problem. so we mustn't go back to some sort of failed corporate model of picking winners. i think they'll be a big mistake. i think another lesson is not of the country is in the same situation. when it comes to stimulate growth and the situation many countries now face, the u.k. perhaps in particular, is there is not government money to do this. the british government faces a 30% budget deficit. the greatest threat in my view to the british economy is not from taking on that deficit. the greatest threat is putting off the action that needs to be taken. cannot every country is in the same situation. i think that is important. so the challenge for policymakers, if you like, is how do we rebalance the economy. we have been too dependent on financial services and housing booms in government money. in the u.k. case that was 70 percent of our growth.

how do we rebalance the economy without a failed strategy of some picking winners? the second question is how do we get growth when there isn't any money around when we should be in the face of deficit reduction rather than deficit spending. now one thing that i think policy makers should be grabbing hold of and putting back to the top of the agenda is something that sadly is far too low down the agenda, which is the dohar trade route that everyone something that would get growth going, that would benefit both developing countries and developed countries, it is their right in front of us. and it is a pity that we can't seem to get that moving. the whole deal is there, ready to be done. i think that is hugely important. while i'm sure dominic is right about the skill of green tag jobs. it's certainly an area that is not about government picking winners but it's about governments understand how future energy markets are going to work. it's about decentralization. some it's about deregulation as

was pointed by some of the infrastructure. so i think that could make a difference. but the big challenge is trying to do this in a new wave rather than trying to return to some sort of failed 1970s model. >> mr. evans? >> i think one message i draw, it is precisely this point, that deployment has become center stage that i think the real risk of jobless recovery and a degree of complacency setting in now that growth is picking up slightly, that the pressure can come off. i think that is a key danger for attacking the jobs crisis over the next six months. i think government has a short-term crisis to do with how to get more growth, more employment growth out of the growth that's taking place. have to re- orientate some of them as packages, which relatively little has been spent on training, skills development. ideas which will reduce a long-term situation in the short-term. refocus that. >> and i was a also on the green jobs debate, we have to tackle

climate change. you have to link agendas in the short-term. but i think there is a longer-term lesson, if i could just comment on one point that david cameron just made, that if you look at what's happened over the last 20 years, the dutch less countries have seen massive rise in inequality and growth of poverty in some areas. at the same time of a great deal of wealth at the top of the scale. so i don't think is going to be a question of politics of indian the future. i think we have to design a growth model which manages to distribute growth better. so i think the other challenge in the media term is in this crisis is how to strengthen institutions, which can show as in some economies they are rather good at getting distribution of income fairer. and also there is a certain amount of evidence to show the fares tend to work better economically over the longer-term. i think you have to reproduce that globally. i think you have to reduce it

nationally, and i think the issue about how you deal with it is crucial. the last point, the international labour organization and a tripartite way through employers, trade unions and governments last summer negotiated global job pact which tried to get agreement on some of the measures which need to be taken. so i would say stakeholder approach also upbringing is constituents together, seeing how we can get joint action in the future seems to be crucial if we're going to get out of this crisis and not return to some of the problems of the past. >> what are some of the steps, the models that you were referring to? you didn't come out and -- >> in the short-term as i say, there are schemes which can keep people in work. i think some of the intelligent work sharing ideas have been positive. people have been able to be rescaled and retrained. the issue now is how does that translate, and can resources be put into trying to actually move into job creation in the short term. one key issue is confidence.

as has been said an issue is how we have resources for that. i think that has to be addressed. i just came from a jobs panel earlier this morning we put questions to the audience, if he had to return content choose between creating jobs, will be the choice? three quarters of the audience and creating jobs now. i would say that is a statistically relevant measurement of the few in transeventy that i hope you will convey to markets in the immediate future. but i think we also have to look at new measures of taxation. transactions as well trying to pull in more resources from sectors which have to also be responsible for this crisis. and i think also saying how we can target investment in the medium turn more effective longer-term i think again have to strengthened the shorter institutions. i was a collective bargaining but also longer markets which are successful and redistributing. i think as part of the problem of the last 20 is what has gone wrong. it's not returning to the system but it is one i would say in

addition to rethink, redesign, rebuild put redistribution out there as perhaps an issue. >> mr. trichet? >> first of all i would pick up what my neighbor just said, to draw the attention of the fact that if we want to create jobs as soon as possible, we need confidence. we need confidence in the market. and to get confidence, you have to be credible in having a path permitting you to be back to normal. so i would really, of course it depends on a country to country basis, but being able, as able, as soon as possible, to demonstrate that you have a

credible path towards sustainable position is essential, in my opinion, for confidence today. and four jobs today. so i don't see in the question that was asked. i see a slight contradiction because it's a little more complex than that. and again, confidence is of the essence and it is with the central banks are trying to do. to be anchor of stability and confidence. now on the longer-term, i would say that we have so many challenges being sure that the system is much more resilient. then we have also sense of technology which are moving at a speed which is absolutely incredible, and probably for dozens and dozens of years. we had the success of india, success of china, success of the emerging world. which calls for incredible changes at the level of the panel. then in the industrialized world, the problem is to be

sufficiently flexible to take advantage of those enormous successes. because we have to run scientific success, technology success, a success in development in what we call before the third world which is the emerging world, and which is taking a dominant decision. and this of course call for a flexible, if you will want to have all the benefits of this new, the jobs that would be. so i would call for structural reforms and flexibility. >> mr. ahluwala? >> actually, i think those are very words from mr. trichet. and you know, i think a phrase like we must protect jobs, it's understandable that in a crisis that would come up, and it would be a great demand for ideas, but what i fear is the supply of bad ideas would greatly exceed the good ideas there for a lot of things can be done under the

guise of protecting jobs, which will undermine the long-term objectives that we all have in mind. it's only in india that we're taking that very much in mine. let me just comment on how we see it. our situation is a bit different in the sense we are happily going at 9 percent for four years. in the two years that the crisis has affected us, that growth rate has gone down to an average of, say, 7%. that is a big drop but it is still pretty good growth rate. but certainly the demand in india is what's happening to all the jobs that you promise would be created. of course, our answer is the solution and getting back to 9%. . .

>> therefore export growth, therefore demand from the export side is going to be less than it was earlier. so the issue arises, we don't have any doubt that on the supply side we have the capacity to grow at 9%. so far us the challenge is where is the demand going to come from? it is that going to come from exports to the same extent. our internal thinking is the best demand should come from domestic investment, and that

investment should be in infrastructure. and that is the biggest supply constraint. i don't think we envision doing it by a huge increase in public investment. i don't think the fiscal situation with the stand that. so the strategy is to increase investment in infrastructure and to rely of public-private partnership, use public money where private money wouldn't comment. rural infrastructure, all kinds of things that are important for world economy. to use the available with money to leverage private investment through opprobrious structuring of projects and arrangement. re-entering that in a vast range of sectors in the economy from telecom to roads, shipping, ports, airports, railway movement, etc. the strategies are different, but in each case the effort is to put in place a framework as we bring in private money. we are doing this in a background where private investment has done very well. we obviously have a stake in the public economy stabilizing as

quickly as possible. i think one new issue that this does raise in connection with the financing of such investment, is there a case for more innovative publicly-supported financing mechanisms or do you just leave it to normal financing system to support the finance provide in the projects? this is something we are looking at. there are many areas where government regulation, differential treatment of regulatory standards, hidden subsidies managed to push financed in a more attractive way into denarius. in our case we have a financial system which is still developing. so there will be more of a case toward doing something. you don't have a firm conclusion on this, but that is an area we are trying to explore. otherwise essentially jobs are going to, when growth recovers. we think that we can get back to 9 percent if we can manage these

particular challenges properly. >> we've talked about confidence. we have talked about the path to sustainable growth, rebalancing of demand, the need to establish more domestic demand and investment in the emerging market, perhaps new financial tools. peter, how would you -- >> the point i would like to emphasize trade avoiding protectionism. the challenge is for very understandable reasons discussions about job protection, even with unemployment in many countries quickly translates into hell can we protect jobs from the threat of either being migrated overseas or from exports from other countries. and one area in which both businesses and government are endlessly created is finding new ways of being protectionist. new and more secure and less

visible ways through trade protection or between financial regulations, even environmental regulations. and so i think it would be a tragedy for the world if we do see that. and i think the moral, the general direction despite noble efforts and the other direction is to be more protectionist at the moment. the importance of trying to progress. trade policy is one of these areas where if you are not pushing the bicycle forward, if you are not riding the bicycle for word you are falling off and doing backwards. the world has a lot at stake in making sure that we don't quietly into up in a more protectionist system. >> i don't very much agree with what peter said. one of the successes in this very difficult recession,

although the rhetoric end up there has been some protectionist there has not been a wholesale, you know, but i agree you have got to keep moving forward. it is one of the biggest opportunities in the world where we need to be balanced. we need to trade more. we need to export more. we need this new growth model which needs to be a model in our case based on sitting in investment and exports, rather than financial government. i just wanted to echo something jean-claude said on this issue of confidence. it is wrong to say that there is somehow a choice for some countries between the early deficit reduction and job creation. sometimes there's plea isn't the choice. if we don't get on the steps toward deficit reduction we have seen in the case agrees with this can lead and the pain that it can cause. a think there is a great danger, particularly the crisis face of the difficulty whereas the

leaders were saying we mustn't put off-limits to be done. politicians, let's just put these decisions of. it is a very fun thing to do, as many economists can say. the deficit crisis actually replaced the beverage prices that we have seen. what people are saying about private finance. we have huge experience in the u.k. some great successes, but there is danger that what should be about sharing risk between public and private sector just becomes a way of government keeping its liabilities of the balance sheet. we would love to take part in your private finance initiatives and i'm sure there are opportunities, but there are also risks to be avoided by building up liabilities for future dinner rations when there isn't a real transfer of risk

involved. >> but the u.k. experience and actually the benefit from it. we have even partnered with the u.k. to find out what has worked in the u.k. this whole issue of the balance of risk and the balance of trans parents he is very important. one man's public-private partnership can becomes another man cluny capitalism. we officially say the nature of public-private partnership, up putting private money into public projects. and that danger is there. we handle that first of all by a very robust competitive systems. every public project is guided by a concession agreement which is very detailed document laying forth the risks. we don't negotiate this with an individual investor. you have the concession agreement. so they did either on the basis of of revenue share or where the

project is not coming to sustain itself by revenues they can ask for a capital up to a certain maximum which is preannounced. whoever was the lowest capitol subsidy get the project. so the system, the concession agreement is known. distended affected trade. a lot of the discussion are before bids are invited. so everyone has an idea on how to improve that. and then they are actually awarded on a competitive basis. the thing is we have had a lot of very good responses. ideally i would like to be able to say this has gone on for ten years, and here are the projects. i know some of the difficult comes to mind. but so far i think we seem to be finding the private-sector response in many areas, and it

is quite encouraging. i think we need to do more. certainly it is a work in progress. we will keep consulting to find out where we can do it better. >> i think confidence. whether it is enough for economic growth, china, which shows the quickest possible growth definitely has confidence, but also spending public money on development of specific industries. so trying to focus not on regions, which would be very important. but concentrating on innovative high-tech areas like recently the venture-capital public bond to provide growth and to create more jobs. there shouldn't be any growth without new jobs. we should focus on these

innovative policies rather than creating additional demand. by the government was doing during the crisis. >> at just wanted to build on the innovation point. i think while i fully agree obviously we don't need protectionism in driving the doja round forward is critical. it is also so important tot( the upper rear point to get the growth for these jobs to occur and what is the immigration policy to mecca think that is another area where you can actually get cooperation. it is not about picking the winners in ensuring that the conditions are in place. these are some examples. health care, not a very popular were to be talking about in the u.s. if you look at it from a growth opportunity there is a massive opportunity. their is a very under penetrated area, and i think a lot of jobs and productivity could be created from that.

so being able to pick some of these areas where we could help create the conditions more jobs and growth. and there are a number of the. health care, education, food, let alone what is happening in the emerging markets. >> that really brings to for a point that i think we can and a time like this. there is a lot of human need in the world. huge numbers in health care and education. so many areas of life. housing and improving conditions. governmental impact. if we can find a way to restore that confidence back and start focusing on those growth opportunities rather than thinking there is this fixed pool of demand we have to fight over who is going to get it. >> just trying to, perhaps, rephrase the protectionist question. the organizations that i represent that gatt members in exporting sectors and important sectors, people who ho feel

threatened. so it doesn't actually help me internalize the discussion. two things. one is so far i agree there is not this protectionist response which would get into growth at the moment. whether that stays that way if there is not a backlash is a key issue we should be concerned about. the solution of that depends upon our success on the job creation agenda and the confidence agenda and engaging people in the discussion is crucial. when we get into an issue which, perhaps, is a more useful way to look at a trade and capital flows, how do you try and remove some of the wire imbalances, not just the financial market imbalance, but the wider imbalances, trade and the points he had just made. unsustainable trade deficits. so my message on that, that will not just be done through trade

policy. trade policy and a set of other policies including employment, the norms of poverty reduction aura actualization to restore the global system. last point, ministers have said they're going to look at different indicators no on that process. but i think it would be the heads of government. it would be a mistak%d not to have employment as a key indicator with a review also of the quality of employment in that process. that is something which can be done immediately and take a balanced view of what is happening. >> well, i want to very quickly now open it up to the audience for questions. if you could think of a short, focused question for our panel about any of these topics, please beat thinking of those

right now. the last word in the formal part of this. >> i'd think it is important that we don't forget the other side of the coin. we need a mutual assessment process of the g20 for a strong, stable, it and balanced growth. it has to be run. it should go to the she 204 assessment. pressure in order to reduce the level of imbalance that is at the heart of the problem that we have to cope with. we have the financial sector that was. we had a loss of this accusation of imbalances. then i have to say is a formidable challenge for the members of the g20 because they have to accept that their own domestic policies would be

changed for the sake of this prosperity, the global economy. now be only entity of the global. again, it is a challenge for all countries concerned, and certainly for democracies also. >> well, we have about 15 minutes an hour session left. to would like that ask the he first question, and let me emphasize the word question. please identify your affiliation just so we will know where you're coming from. >> i am bob forbes with forbes. one thing we have not talked about here yet is something that does stimulates jobs and economies become and that is tax reduction. does anybody on the panel want to address that? >> of would be happy to. obviously we have the real issue of having this huge deficit. net for its own sake, but for the sake of confidence and jobs and the economy. otherwise our interest rates will be doing up.

as we trade out of this recession we should be trying to use tax as a signal to help encourage people to get out there and create jobs and new businesses. for instance, saying that any new business the sets up should not have to pay national insurance of the first ten employees plus something like that to try and stimulate the creation of new businesses and small businesses provide some of the growth and wealth. that is possible. in the western economies are tax systems have become phenomenally complicated. i think that is the case, particularly in the corporate taxation fourth pure relief and exemptions and disregards and all the rest of it and a simple grades of corporation tax. i think there is something else we can look at as well which is, while everybody knows we have cut this difficult and potentially painful readjustment as we try to get back to some normal budget balances, i think we should try and send a very clear signal that we want our

countries to be successful, entrepreneurial, enterprising places where we want companies may be that have left and gone to be the case elsewhere to come back. a think one of the clear signals we can send is long-term targets for corporate tax rates to say this is how we see the future. no doubt this is going to be a very, very business friendly country, as we need to be if we are going to get out of what has been a terrible year-and-a-half. >> i ask you about. >> well, the government has set out a bonus tax which they have put in for one year only. i think that is going to happen. that will take place. we have not opposed to that. but i don't think it is a long-term answer to the problem. i think actually what president obama was talking about, the idea earlier of some sort of levee that could be agreed

internationally in order to try and ensure ridings to future problems such as those we have had, i think that is a more long-term, practical. we need to be hard-headed, practical, acting in a strong national interest rather than knee-jerk politics which may make as do good in five minutes but is that going to solve the problem par five years. >> next question. yes, in the back. please identify yourself. >> this. i am from a firm management country. >> what country? >> the u.k. >> i have a question today. i see the strong imbalance. the u.s. is printing money through the treasury did. that g-7 country right now is not the treasury. very hard to compensate the global imbalances through currencies which at the end of the day create jobs.

this is going to be a key item on the agenda when france takes over next year for g20. can you comment on what you think is the imbalances created by today's currencies that do not trade in the same way? is a central bank that does not have the same freedom and a time when jobs are at risk? this has an impact both on the g20 and more importantly japan, europe, and the dollar. thank you. >> trichet, you are the central banker. >> i want to be sure that i heard that the central bank had not the same periods did he you? i'm sorry to say. the federal reserve. i don't doubt that for one

second. on the currency's i would only say that, ay that, as you know,n bernanke and tim geithner are saying in the interest of the united states. the other major currencies. i say myself i fully agree it is in the interest of the united states. i would also say that it corresponds to the overall superior interests of the group the so what this say. i would also said that as a major floating currencies we have members of other currencies that could themselves have a progressive and orderly and timely appreciation. that is the way i see the

running of the present situation. we could imagine other solutions, of course. they said to have a floating major currencies. >> other questions? yes, sir. in the front row. >> every country has its own problems and its own solutions. how do you see? what would be the challenge is to iraq ? thank you. >> peter. >> well, it is a good point. i wish i was more confident that it would succeed.

it is very important to succeed. it is very important we continue to progress, but i am not expecting is to suddenly become easy. even the process of trying to make it happen is difficult because you tend to get small victories on the way, and you also stop sliding backwards. i think the realities of the positions of the different government, the political pressures they are under, we are not going to it see any early and quick resolutions. just building on the earlier question of the role of currency, i do think there is something between the trade protectionism issue in the currency issue. ultimately over time we have to, what we have seen is a shift in economic power and wealth from the west broadly speaking to the east, asia, middle east, and so on comparably speaking. and that is a good thing. it is a good thing because it is a reflection of the fact that

asia has cut and wealthier. i think that will ultimately translate to a currency movement, and asian currencies will ultimately become more valuable forces western currencies. it won't be an immediate swing, but actual the this movement we have on that the more pressure we are going to have on the protectionist issues and the more difficult it will be to resolve them. >> trichet. >> questionable to say the future. it depends on us whether we are a success are not. and we all agree, i would say, on behalf of all central banks, we have an immense stake in the success. immense. not only for the global prosperity, stability. it would be the worst enemy in

this respect. again, it depends on us. we have all to work. what he said was right. to have the most lucid possible public opinion to understand that there is an interest. >> it is very hard to keep forcing yourself at this moment to think that there is this positive solution year that everybody can benefit. this is a moment mary is very easy to start to think about how can i avoid losing? that is a very dangerous approach indeed. another question. over here. >> david mollen, qvt financial. regulatory failure was absolutely at the center of the problems we have had. i would like your assessment of the realistic prospects for improvement in the regulatory structure and practice.

to put it in perspective of what like to remind everyone that we in the u.s. have six separate federal regulatory agencies. i will not name them all here. i am not including the smaller ones. >> and you were part of it. >> i am part of that. more than that the administration looked at the regulatory problem last year and came up with their solution, which was to propose a new regulatory agency in the u.s. to regulate consumer financial products. now, eight is true they y did pe merging ots and osc to keep the total number at a half-a-dozen regulatory agencies. i would further mention that there are strong provisions in the congress to strip the federal reserve. so given that outlook what is

your view realistically of the potential for progress here given the sort of critical role that i think regulatory failures played in this crisis? thank you. >> anybody want to take that? >> i think the regulators are all a bit timid on responding. [laughter] >> not this one. >> there is an awful lot of blame to go around for the crisis. i don't think anybody should be modest. i do think that some of the criticism of regulation from the financial sector, and it sounds a little bit like to have a massive fire. the fire brigade comes in, and then you blame them for flooding your house. regulatory flow was a part of it. these cultural concepts where three years ago public opinion makers were saying, look, we

have entered a new world. economic 25, 30 percent less return because we are so intelligent with such good investment. lead to regulation is the solution. that culture brought us to the edge of the habit. i think certainly we need some regulatory changes, supervision changes. the need to deal with the problems of regulatory arbitrage. i do agree with some of those in arguing here this week that the need to bring it together internationally. you need a culture change. >> so let's conclude this way. the topic is what should the future role of government be in assisting the rebuilding of economies and the financial system. can i ask each panelist to give one sentence of your answer to that question. who would like to start? david.

>> learn the lessons of regulatory failure in finance, and i think they are being learned. recognize that particularly in the west we need a new economic model based on saving investments of broader economy exports rather than just housing, finance, and government. >> wow, he did it in one sentence. [laughter] excellent. dominic. >> i would say to focus on the long-term health metrics which are things like tax, less regulation, education, and how the infrastructure works. >> peter. >> i think we all need a little humility. all businesses and governments got a lot wrong. as we work out what to do in the future we should condition our recommendations knowing that we don't know all the answers. >> andrei. >> i would say that the main lesson is to recognize that whatever the rules where we

started if something goes badly wrong government will be blamed you better to be watchful about the economy. keep your eye on the longer-term growth prospects which depends on individual countries with the drivers of growth are, and certainly as far as the financial sector is concerned health is very important. you need to look at what is a global consensus of what constitutes a good financial sector and keep moving towards it. >> i think the government will be increasing in the particular areas of regulatory work and others. whatever decision is and taken it will only be agreed discipline. otherwise we might be engaging in a game where one side is setting the rules. the other is trying to find the course. >> mr. evans. >> in the short term it would be to get the same political attention which governments gave a year ago to resolve in the banking crisis to the employment crisis.

in the medium-term it is opening up decision making and accountability in a much broader stakeholder model in trying to get those in to government. >> and last but not least jean-claude. >> not being complacent in any respect which means that we have to work tirelessly for having a system which would be as the global level much more resilient, make sure that we are really having governments as it is being decided at the global level to run the global economy which is the more pertinent entity and be sure that the information, the quality of information of our own people, the lucidity of public opinion enlightened by this quality of information is such that governments can really play the game of global governments. ..

>> it's the only collection of american presidential portraits painted by one with artist. american presidents, life portraits by chazz fagan now on display at purdue university through february 21st. the exhibit looks at the lives of the 43 men who have held the office through paintings,

photographs and audio recordings sponsored by c-span and the white house historical association. and if you can't get to west lafayette, see the entire collection online at c-span's web site, american presidents.org. >> the future of american culture and morals was discussed at a symposium at regent university. scholars talked about president ronald reagan's cultural values as well as current american mores. from virginia beach, virginia, this is about two hours, 15 minutes. [applause] >> good morning. >> good morning. >> we can do better than that. good morning. >> morning. >> welcome to regent university's fifth annual symposium in honor of our nation's 40th president, ronald wilson reagan.

our first symposium in 2006, the future of conservatism, now published in a book received a lengthy and superlative review in "the new york times." our second symposium in 2007, the future of religion in american politics, came out as a favorably-reviewed university press book. our third symposium in 2008, the legacy of ronald reagan, came out as a book titled, "the endeering reagan," which caused reviewers to say no compilation comes close to matching its insight and credibility. our fourth symposium in 2009, the future of the american presidency, will come out as a university press book later this year. so it is that what we have said and done here reaches an

audience around the world, but not just in books. each year c-span televises our reagan symposia nationwide, and this year is no exception. let's welcome c-span and the c-span television crew with a hearty round of applause. [applause] thirty years ago when america struggled from the decade-long malaise of the 1970s, ronald reagan rejected the notion that the sun had set on a once-great country. he countered, it's morning in america. what better time than now, 30 years later, with america once again facing forceful challenges to our identity at home and

abroad to re-examine the character of american culture? can a traditional view of american culture successfully compete against post-modernism? what are the sources of cultural renewal in a divided pluralistic society? is the promotion of traditional american cultural values merely an antiquated relic of the past? to those questions, president reagan responded vigorously, boldly declaring that the greatness of america is in you, her people, and in your families, churches, neighborhoods, communities, the institutions that foster and nourish values like concern for hers theule of law under god. ronald reagan encouraged americans to return to their fundamental roots of faith, family and freedom. here to address the vital subject of the future of

american culture are seven of our or nation's foremost authorities. hadley arkes, paul cantor, allan carlson, jean bethke elshtain, charles kessler, wilfred mccloy, ken myers and george weigel. to allow ample opportunity for you to ask questions, i have asked our speakers to limit their formal presentations to approximately 20-25 minutes. upon your return from this morning's break, please, line up behind one of the two microphones at the head of each aisle. we have had as many as 24 people

standing down both aisles waiting to ask questions, so let's get in line early. [laughter] and now let's begin. entering first on stage, hadley arkes, professor of american institutions at amherst college who also serves as a senior fellow of the ethics and public policy center in washington d.c. the princeton university and cambridge university presses have published all of his books, including the most recent, "natural rights and the right to choose." his writings as a public intellectual appear in such publications as "the washington post," "wall street journal", weekly standard and national review. the serious scholar, he is that, but now here's the rest of the story. [laughter]

when i asked a friend to describe hadley arkes, the friend said, he is the groucho marx of american professors. [laughter] he always manages to leave in his wake a legacy of funny stories. and would you believe he drove here from am hearse in his new lexus listening on his mp3 player to jack benny, the shad toe, captain midnight, mr. district attorney and orson wells' mercury theater of 1939-40. let's welcome to the regent university stage hadley arkes to address the touch or first principles, reagan and the recovery of culture. [applause] >> it's lovely to be back. when chuck said the foremost

authorities of america, i started looking around to see who walked in the room. [laughter] ladies and gentlemen, in the 1980s in the days of president reagan, mr. lou cannon started a running line in "the washington post" called reagan isn't of the week. the gipper was speaking frontier gibberish, and he offered once as a case in point an interview in which the president was asked how could you be supporting the contras in nicaragua when they're seeking to overthrow the legitimate government? and the president said, it's true that the contras are seeking to take power at the point of a gun, but, of course, the sandinistas hold power at the point of a gun, so i'm not clear on the difference between the contras and what you are pleased to call the legitimate goth of nicaragua.

now, the gipper could not fill in the bibliography. he couldn't explain that his reflections here followed the paths of the past as writers, he probably could not have explained that his reflections here led him back to the difference between an international law based on positive law and an understanding of international law influenced more fully by the axioms of natural. and by positive law we mean something that is law only because it has been positive, enacted by the people in any place whose edicts are given the force of law. when the positivists asked the question, who formed the legitimate government of nicaragua, the answer came back, it was the legitimate government was that government that had effective control of the territory. that was not necessarily a government that enjoyed the consent of the governed. it could be a hitlerite regime

or the regime of saddam hussein, but if it were firmly in control of the territory, it counted in the positivist reckoning as the legitimate government. the alternative view insists that on primacy of certain moral tests casting up warnings before we would confer legitimacy on some exotic despotism. perfected an older vision of international law because it reflected an older understanding of the connection between morality and law. the modern project in law was reflected in justice holmes when he famously hoped that every word of moral significance could be banished mr. the law altogether and replaced with legal terms nicely purged of any moral shavings. that has not taken hold among ordinary people for the connection between that logic of morals and the logic of law is

inescapable, it just can't be removed. when we move to the level of moral judgment, we move away radically to statements of personal tastes or private belief, we begin speaking about the things that are more generally or universeally right or wrong, just or unjust which is to say right or wrong, just or unjust for others as well as ourselves. if the we come to the judgment that it is wrong for parents to torture their infant, the next line is not, therefore, let us give them tax incentives to endeuce them to stop -- induce them to stop. [laughter] if we think that the torture of infants is wrong, we don't make contracts with people or offer them incentives, we respond with the moral voice of a hand, a command that the torture cease. we forbid that torture to anyone, to everyone which is to say we forbid it with the force of law. and that essentially, i think, is the classic connection

between morality and law. now, in spite of the best efforts of the law schools there's still the understanding of law that's held by ordinary people talking about these things with ordinary language. ronald reagan anchored the world in common sense, spoke about politics and law in that way without knowing that he was speaking the language of natural law even after people in the law schools had stopped taking natural law seriously. crisis of the house divided managed to bring out the ways in which lincoln moved on his own path marked off before him by aristotle. and as one commentator observed, the accomplishments may be even more impressive when we know that lincoln was not familiar with the writings of aristotle and aquinas, it might be said his mind moved matchally along

the ages. i suggest something similar was at work with reagan. he read widely, but even though he could not bring out the writings. the striking thing about him was that on his own, in his own curiousty of mulling over puzzles or more questions, he often moved along paths of reflection that had been trod before him by writers more accomplished and celebrated than he. it's curious as to how this turn of mind went unnoticed, even among journalists like luke canada who effected to have watched him closely. one of the most notable examples occurred early in the new administration. it seems to be faltering in the winter of 1981-'82 with a severe recession setting in. the political predicament seemed to be caught around the time reagan's future and the fate of his administration would come to depend on where interest rates would be in the fall.

that sense of things moved me to write a critical piece for the national review back in may of 1982 which bill buckley played up under or the title, a lover's lament for the reagan administration. and i put it this way, how could it be that the standings and prospects of a conservative administration would hinge on anything as contingent as wanting significance at the level of interest rates at any moment? there's a whole level of concerns brought together that propelled reagan into office, the aggressiveness of the soviet union, abortion, suffocating taxes and regulation, no one who cared about abortion would add an escape clause saying i'm voting for people who try to protect unborn children for the killing of abortion unless mortgage rates stay at 18%. [laughter] for people who were intensely concerned with questions such as abortion over life issues or

virtually anything else and the issues of principle that divided the parties, the ups and downs matter, but they'll not be decisive any more than for many democrats if unemployment remains at 10%. they'll still be voting democratic. in any case, my lament, this is my lament. i thought i had a certain standing to lodge the complaint because i had worked in a minor way with tony dolan as a kind of consultant or helper with a speech-writing shop in 1980. i wrote some of the best things ronald reagan never said. [laughter] still, i had a certain franchise to stay in touch from the outside. not long after i'd written my piece, tony invited me in for lunch with the invitation to pour my heart out, and i cited a passage that the president delivered in the state of the union speech. he noted there was a policy of giving subsidies to people who

lose their jobs as a result of competition with international firms. but he said, we don't give that subsidy to people who lose their jobs as a result of competition with domestic firms. out of equity we should do both, if we do one. but we cannot do one, i suggest we do neither and repeal it. i told tony, look, that's perfectly reaganesque, it's a question of principle. it was utterly indifferent to the question of where interest rates were going to be next fall. i said, get the guy who wrote that one and tell him to serve up a dozen more. by the way, who did write that one? oh, the president threw that in while we were working on the speech. well, there we have it. we used to say just let him be himself. let reagan be reagan. and he framed his questions in ways that were universeally accessible. in his speech accepting the republican mommation in 1980, i

recalled him citing president carter's charge that business and labor were making excessive demands, but reagan insisted that we do not have inflation as mr. carter says because we have lived too well. and then he turned to musing about the problem, high taxes we are told that they are somehow good for us, when government spends money it isn't is inflationary, but when we spend it, it is. [laughter] it's a line that draws us in, and he delivers us from the haze of slogans and leaves us to look more closely for the real causes of inflation and the managing of the money supply. i found him dealing with a passion of environmentalists, determined to block the extraction of more oil at home. and he remarked that we will not permit the safety of our people or our environmental heritage to be jeopardized, but we are going to reaffirm that the economic

prosperity of our people is a fundamental part of our environment. now, what was curious and striking about that passage is that it anticipated the argument made more fully 30 years later by benedict the 16th. the pope pointed out that nature, the nature revered by the environmentalists was a nature purged of human things. we might put aside the question of whether human things would affect the peak of creation and be biblical understanding, but it takes a certain perverse genius to conceive of nature in our own day detached of those creatures who alone bear a moral purpose and can impart a moral purpose to inanimate matter. in other words, the things whose presence are marks the existence of a moral purpose in nature. but as the scheme of

environmentalism, we are constantly asked to save the planet as though human beings were not as much a part of that nature as trees and flowers. benedict drives home the greatest point, the environmentalist seems unaware that what they seem to do in the name of saving nature may actually do damage to the integrity and character of the human -- [inaudible] that moral being who is every bit as much a part of nature. and that may be done by ip deucing people -- inducing people to believe that they have a license to manufacture and discan card human life to suit their own interests or advance a project in research as though human life had no intrinsic importance. we seek to extend the span of human life while we gradually purge from ourselves any sense of reverence for those lives we profess to treasure. ronald reagan, of course, was nowhere near the world class

philosopher that joseph ratting ger is, a man recognized by the french economy, a man who works readily in latin, german, friend. french. but what is so notable here is that reagan grasped the central truth of the matter. he grasped something that had eluded environmentalists along with everybody else. he understood a simple but momentous point, that people with intellectual pretensions far exceeding his own have not managed to grasp even yet. plato recognized that the political man would need to understand what the philosopher understands and in deliberating about the things that were just oren just, but the political man had to make himself and his measures acceptable to the multitude o -- composed of people who were not philosophers.

the task was to speak in a mode that was accessible. lincoln said the task was to impart the central idea, and he gave us the most luminous examples of how that was done. mr. reagan had something close to that knack, and it was combined with his touch for things that ran through the common understanding because they touches primary truths. one of my own disappointments in pitching subjects for speeches during 1980 was i couldn't get my friend in the campaign to have mr. reagan do a riff on a striking example of natural law reasoning that lincoln gave us in that fragment he wrote for himself on slavery where he imagined himself to be engaged in a conversation with an owner of slaves, is it because he is less intelligent than you? ah, beware, you may be enslaved by the next black man who comes along because he's more intelligent than you. is it because he's darker than

you? you may be enslaved by the next black man that comes along with a complexion even lighter than yours. at no point in the chain of reasoning was there an appeal to revelation of faith, this is simply a model of principled reasoning. it was accessible to people across the religious division, you didn't need a college education in order to understand it. it could be understood by catholics, baptists, even atheists. it was a model, then, of speaking in a manner that was commonly understood and in a manner that touched primary truth. now, i was applying that same mode of reasoning for the matter of abortion and running it this way. why was that child in the womb anything less than human? it doesn't speak. neither do deaf-mutes. it doesn't have arms and legs, other people lose arms and legs

without lessing their protection from the law. there is nothing to disqualify the unborn child in the womb that would not apply to many people walking around outside the room. my own judgment was this was the kind of speaking that quite fitted ray began's -- reagan's style, and he could have delivered it with considerable effect, but, of course, they decided not to make abortion a central point. to his credit, he sought to teach jeffrey about this question about the unborn child, and he would do it in that style of his by raising questions. in those radio talks he gave in the late '70s, he'd note the first time he faced the question of abortion when he was governor. he was drawn by this curiousty that the same legislature in california seeking to establish the right to abortion had passed the law making it murder to kill an unborn child in the course of an attack on a pregnant woman. he also noted that the child in the womb already had standing to

inherit property as an heir, so he posed this question to his staff: let's say a woman had become widowed during his pregnancy. she found her husband had left his estate to her and the child she was is carrying. reagan asked, would she be free to order the killing of the child in order to keep the estate for herself? wouldn't that be murder, he said, for financial gain? and was reagan not leading us back to the central question in the most engaging what i? steve haywood in his anal of reagan remarked to dismiss reagan as simplistic, but the problem is he recognizes that people who relish schemes of administration may be tempted to absorb themselves in details while avoiding the moral question that lay at the heart of the theme. edmund burke once warned that remined policy may -- refined

policy may will be the parent of confusion. we often find ourselves making judgments hinging upon certain rules of prudence that may cut through the debates waged by experts on technical issues. it seemed to me reagan reduced one part of the conflict with the soviets to this conjecture, the advantage tilted to the side of those who were disposed to cheat and who could be far more successful in controlling information and closing off the channel of leaks. on the other hand, if the game were one of an arms race, the advantage tilted to the side that had the larger capacity for technological inventiveness and spirit of genius with a history of rewarding innovation. that was our side, the united states. reagan bet on strategic defense, and he did it also out of a moral conviction that any national defense should truly be built around the notion of protecting the lives of our own people, not keeping them vulnerable to nuclear assaults

for the sake of holding to a theory of deterrence that might never be tested. and in marked contrast to his critics, reagan was more firmly grounded in his moral starting point, and he saw more clearly than they that his move to strategic defense could put the soviet leadership under pressure and foster a crippling cry us. -- crisis in the character of the soviet regime. ronald reagan, of course, was famous for his knack for telling jokes. but the jokes for also part of his teachings. the jokes have a point. they play off principles we count on people out there to understand. my friends here who have known me for a long while know the argument i've made that the comedians and the philosophers are often in the same business because they both make their livings by playing off the shades of meaning and the logic tucked away in our language. henny youngman will ask, how do you keep a marriage going for 20

years or many? twice a week we have dinner with candle light and wine. she goes on tuesdays, i go on thursdays. [laughter] people haven't yet seen the real reach of liechtenstein's observation that the whole history of philosophy could be conveyed with a string of jokes. the laughter from the audience is a sure sign that people have understood the point. people may concede through the laugh what they may not if it were put to them explicitly in the form of an argument. the best examples for that come from sex, but i'll put that aside for another occasion. when i'm taking drives, i listen to those radio shows that chuck and i listened to when we were growing up. and what i find listening to those old comedy shows is that those recordings from