[applause] an awful lot of fun and 30 d. got gears turning about our futures country and what roles we play in rocky mountain west and throughout our country as well. you'll be equally inspired by a lineup and presentation panelist today. i'm going to start by introducing bryan wesbury, chief economist at first trust advisors lp and financial service based in wheaton, illinois. "the wall street journal" ranked mr. wesbury the number one economic forecaster in 2001. "usa today" ringtone as one of the top 10 forecasters in 2004 the speaker's platform need to make topside keynote speaker in 2011. a member of the academic advisory council of the federal reserve bank of chicago. he's a frequent guest on fox and bloomberg, cnbc tv he began his career in 1982 at harris bank

between the chicago corporation and senior vice president and chief economist worker fred kubik, stephens and thompson. 1995 and 96 he serves as the chief economist for the united states congress. mr. webster received his mba from northwestern university's keller graduate school of management and a ba in economics from the university of montana. ..some of you have seen me talk

but most of you don't. so let me just give you a real brief history of the last couple years of my forecasting record. the past two years have been some of the best forecasting i have ever done in my career. which spans close to 30 years. 2008 was the worst year of forecasting. i have ever done. in fact, i thought we would avoid a recession in 2008. i really did. i'll talk about that in just a minute. but just in case you go on the web and look me up, you be find wesbury is clueless, he missed the recession, don't believe anything he says. et cetera. et cetera. but they don't say is that the past two years have been pretty darn good. now, that actually sets the stage for me this morning because the title of my talk is , did capitalism fail?

and my belief is that our answer to that question will set the stage for the decade, the two years ahead that charles talked about last night. the decades ahead our children's and grandchildren's lives and all center around what happened in 2007, 2008 and 2009 and did capitalism really fail? so what i want to kind of do is tell you how we got -- i'm a storyteller just like charles was last night and i want to go back to the early 2000s and i want to suggest to you that we would have never, ever had a bubble in the housing market. by the way, i hate that phrase bubble but nonetheless , a bubble in the housing market. overinvestment in the housing market unless alan greenspan had lowered interest rates to 1%.

i don't know if that sentence made sense. in other words, what i'm saying is 1% interest rates in '03 and '04 caused the housing bubble. now, let me put it to you this way. when you get to a green light in your car , what do you do? i hit the gas. i'm busy. everybody's busy these days. we can't afford a yellow light. right? so we go. has anybody in here ever stopped on purpose at a green light? i'm not talking about a senior moment all right. i'm talking like you literally on purpose stopped at a green light. got out of your car went around to the other side just to make sure the other one really was red. anybody? so you're telling me you trust those things? that you believe that engineer from university of colorado, colorado college, wherever they did it right. they didn't mess up. if one's green, the other one's

read and you just trust that all the time. what i'm getting at is that we make assumptions every single day in our lives. every single day that have to do with our life. i mean, if you get t-boned at an intersection that's not a fun thing to have happen so that other one better be red. remember the movie "the italian job." one thing in downtown l.a. they turned everything green. imagine, it's a disasters. everybody goes all at once and it's gridlock and that's what they wanted because they were ripping off the gold and all that stuff. but the whole point i'm getting to here is that if you in 2004 were driving by a bank and the bank, the sign said mortgage 2% , anybody in here stop and go gosh, i can't pay 2. i have to pay 5. [laughter] >> does anybody go into the bank and say how in the world can you offer me a mortgage at 2%?

anybody ask a banker that? you know what their answer would have been? have you ever heard of alan greenspan? he's the maestro. the smartest man in the world and he has set interest rates at 1%. that's how we can lend to you at 2. and then you turn and you say honey, granite counter tops. cherry cabinets three car garage. the better neighborhood. we got it all now. the bank just said alan greenspan has set interest rates at 1%. so why wouldn't i borrow more? why wound i buy a bigger house? if i'm a financial institution, why wouldn't i lever up more? if we would have never had 1% interest rates we never would have had the overinvestment in housing. you're going to have to trust me on this. don't have my charts and models behind me but the bottom line is interest rates should have never been below 3 and a half to 4% at that time. never. i can tell you why if you want to ask me. by the way, there is no way i

can talk about everything that's going on in economics these days so your questions are going to be really important to get to the stuff i don't get to. but what i'm getting to here is we had overinvestment in housing. no doubt about it. but that froth, that risk-taking that live rg up of the system never would have happened if we didn't have 1% interest rates i think fannie mae and freddie mac and cra and all of those things had to do with it as well for 60, 70 years all we've done in this country is try to figure out how to get more people in houses. how to lower the cost. how to get banks to take more risk and lend to lower income people. so all of that was going on even with fannie and freddie and cra and all the other stuff we do to hemp people get in housing we never would have had the bubble if we didn't have 1% interest rates then when the federal reserve raised interest rates the music came to an end and the

bottom line is that's what caused the collapse in housing. it wasn't house of cards built on greedy greed did bankers that were willing to do anything to make a quick buck. you can't have that unless people are willing to buy bigger houses than they afford. you never could have had the kind of housing market. by the way, i live outside of chicago. roosevelt road if any of you know the area. is like the main drag. back in the early 2000s, there were five mortgage brokers within a mile of sort of where i intersect roosevelt road. everybody's got that main drag in their neighborhood. right? those guys are all gone. you know what's in their place now? cash for gold. 1% interest rates gets you mortgage brokers. 0% interest rates gets you cash for gold. and if you want to think that somehow the federal reserve doesn't have a major impact on

our system and the way our world looks you're not thinking about it right. they have a monster impact. capitalism works but when you give it a bad input like money only costs 1% then guess what, bad decisions are made. it wasn't capitalism that made these mistakes it was the mistake of a monetary policy run by the federal government that literally set interest rates below where they should have been. we ended up with mall investment. a person called mall investment. overinvestment in housing. now, i estimate the overinvestment in housing was 400 to 500 billion dollars. all right. that's a large number. but it's way smaller than the 2-3 trillion dollars that we spent trying to get out of it. so how did we go from a 400 billion loss to a 2-3 trillion

loss? and this is the second part of what happened. we instituted in november 2007 a rule called mark-to-market accounting. and mark-to-market accounting took a fire and turned it into an inferno. if we still had mark-to-market accounting today based on bids in the market place, we would still be going down. instead we've turned around and gone back up. and this is why in the winter of '08, '09, right in the middle of the panic that we had, i started forecasting a v-shaped recovery in the economy and a boom in the stock market. and starting on march 9, 2009 when we reformed mark-to-market accounting we said guess what, you can use cash flows to value an asset not just the market bid price. that was the day the market bottomed and we have doubled the stock market since that point. and what's amazing is that we've

had six quarters of growth, 100% increase in the stock market and yet the negativity about our economy i've never seen before. even to this day. 105% up in the s&p 500 and people are still scared to death to buy stocks. i call it economic hypocon drea by the way. all right. you know, in my 20s i'd get heartburn i'd just eat another burrito what the heck. now i get heartburn i'm like honey i think we need to go to the trauma center this might be the real one. and you know, that's hypocon drea. that's where we are. anybody in here remember dubai? it was 13 and a half months ago. remember dubai? i don't mean to offend anyone this this room, but 95% in this room have no idea why they were worried about dubai. and five days later you stopped

worrying about dubai and you haven't thought about it unless you were taking a trip there until i mentioned it right now. do you know why you stoped? do you know what they did? what did dubai do to fix its problems? what were dubai's problems? nobody in here knows but all you know is that for five days dubai was going to be the thing that caused us to have a double-dip recession. and this has gone on with the bp oil spill, ireland, egypt, libya. i mean, you look at this last 24 months, it has been one onslaught of thing that's going to cause us to double-dip or go into the great depression after another one after another and have any of you ever stopped and said i kind of buy into all of those little things. every time you just jacked my fear up. but the stock market's up 100%. how did that happen? and here's the deal and that is that capitalism never failed and

see, there's lots of people that believe that somehow back there when all of this fell apart that it was, that somehow the system itself was broken. and therefore you can't believe it is fixed. isn't that right? and so that's why all these little fears bother you so much. now, i know there's big things going on and i'm going get to those in a minute. but that's why negativity seems to bites so well. glenn beck, you turn on his show. he'll tell you we're one infrch the edge of the grand canyon and we're going 1,000 miles-an-hour. who would buy stocks if that's true? not glenn. by the way since march 9, 2009 stock market up is 100%. gold up is 50% and bonds are down 12 if you look at the long-term treasury bond. where did you want to invest. all right. so now that brings me back to where we are today. consumption today is at an

all-time high. it's never been higher in the united states ever. yes, we have high unemployment but consumption is at an all-time high. a lot of people can't figure that out. we've got six quarters in a row. i just said this of economic growth. gdp is expanding. now, it's not expanding at 6% and if you listen, that's proof this is a terrible economy. it is growing at three and a quarter percent over the past 18 months. you know what the 50 year average growth rate in the u.s. economy is? 3.1%. we're growing faster on average than we have over the past 50 years. now unemployment is still 9% and some people will say to me well, that's proof right there that this economy isn't fixed and in fact, how can we have growth when unemployment is so high? i want you to think about this for a second. some of you probably asked that question. how can the economy grow with unemployment at 9 or 10%.

you know what my answer to that question is? how can it not? that's a little zen. jiujitsu. the unemployment rate is so high it has to come down. you know history. what happens every time the unemployment rate goes up? it comes back down. what happens when it goes down , it goes back up. do you think all of that stopped? it's just over now? we're not going to improve anymore? see i don't buy that. when do you get the flu? when you're feeling awful. -- excuse many, when you're feeling great. you get over the flu when you're feeling awful. right? and that's the way the economy is. and yet somehow we have come to believe that underneath something is broken in the system and i think a lot of that starts with this belief that somehow capitalism itself went

out of control back in 2004. 2005, 2006. now, that leads me to our policy responses to all of this. because if you believe capitalism got out of control there's only one way to save it and that is government. and isn't that the argument that we've had for all of these decades? actually goes way back before canes. put some intellectual gift wrapping around this idea that government is necessary to contr control business and now we have this intellectual debate and charlie talked about it last night. right? are we going to believe government can do these things or are we going to believe the private sector can do these things? but until you wrestle with what happened in '07 and '08 i don't see how you can come to an answer on that. and so one of the fascinating things to me is how many

republicans back in '07 and '08 caved on this issue? i believe t.a.r.p. was one of the biggest mistakes made by republican politicians since herbert hoover raised taxes in 1932. all right. [applause] >> and what i mean by that is we didn't need it. capitalism would have fixed itself. mark-to-market accounting was the problem. and somebody in here can ask me that's an all day seminar. just about the accounting rules. all right. but you can ask me in the q and a about that and i'll go into more deal but we didn't need t.a.r.p. even before t.a.r.p. in january of 2008, the very beginning of the crisis, i went to capitol hill and testified against larry summers he sat right next to me. he said if you don't do a stimulus bill we're going to go into recession and if we go into recession congress, it's on your

shoulders. i said , if you do a stimulus bill, you're wasting money because there's nothing -- stimulus is antistimulus and tax credits are only a one-time deal and they're not going to cause walmart to build another store or any manufacturer to build another plant and you shouldn't ought to do it because it is a waste of money and you're going to just build up the deficit and going to make things more problematic in the future. we voted for that stimulus bill. in fact there's lots and lots of republicans who voted for the stimulus because bill kolender because it was george bush's first stimulus bill. what always amazed me then when it came to 2009 and obama's stimulus bill came around, this very same politicians that voted for the bush stimulus bill said obama stimulus was bad. you can't do that. all right. it's either capitalism works or it doesn't. somebody said to me hey wesbury it's easy for you to stand here today after the war and be a

general. the thing is in the middle of the war is change mark-to-market don't do t.a.r.p. don't do stimulus and what's fas natesing to me is if you -- fascinating to me is if you truly believe in free markets if our politicians and our leaders truly believe in free markets they should have never gone that way. ever. all right? [applause] >> and i think the message that came out of that is that capitalism doesn't work without government. t.a.r.p. forget whether we bailout the -- populism stuff going on. bailing out the bank but not the little people and all of those things. that's not the real problem can t.a.r.p. the real problem with t.a.r.p. is that it said we need government to stabilize our economy over time. that's the real problem with t.a.r.p. all right. and i believe that any republican politician that voted for it it for us to move on into the world charles believes we will have and i'm with him.

for us to move back to that world i think they need to apologize for their vote on t.a.r.p. i really do. because it it was wrong signal. it was the wrong thing but it has caused, it's cast appall over the whole argument about government versus the private sector. now, i'm sure there's some people in here that want to talk about aig and things like that and we can in some q and a but i want to move on real quickly here and that is i want to get to this point that this concept of black swan for a seconds and this is i believe insidious. i believe this concepts of black swans. by the way, black swans are just tail events. statistics. this thing out here nobody can plan for or nobody does plan for. house prices only go up. they don't go down. so everything was designed for house prices going up, and then

when they went down, everything fell apart. right? all swans are white and then you find a black one in australia and they didn't even think it was a swan those of you who read the book right? they didn't even think it was a swan. it can't be. it's black. it's not white and so this concept of black swans has kind of taken over the financial markets and people thinking about investments. so now we have this fear that we're going to be the republic again. you're going to be rolling wheel barrels full of money around to buy a loaf of bread or that we literally are one inch from the edge of the grand canyon and debt is going to turn us into grease tomorrow. my answer on that is we face inflation but not hyper inflation and two, we've got a huge debt problem. the government is i mean, out of our world huge. i mean, here's , want to know how big government is right now. i've tried. thousands of ways and we all know it but how to communicate this. so if we held the debt lim flat

right now if we used that as a tool to get spending down let me tell you what would happen. we could pay interest on the debt. we could pay social security. we could pay for defense and we could pay for veterans benefits those four things. let's just say we didn't change anything about those four things and we paid them all interest social security, defense and veterans benefits. everything else in the budget. medicare medicaid highway projects the white house budget. congressional pay. department of energy, department of labor. department of education. everything else in the budget would have to be cut 85%. to balance the budget. >> i'm with you. i want to see than happen but that's how much spending is out of control. 85%. think about. that literally. those highway projects that are going on right know, they would

stop dead in their tracks. we wouldn't even have enough money to take the barriers out of the road. all right. i'm telling you. literally it would alter our world massively. i personally and i have a hard time even saying this. i personally don't think split i can we could survive doing that. that's why i want to see a glide path to get us back to balance because i think that it's just -- we're not carl icahns take over and fire 20,000 and sell-off 16 divisions and spend spin it off. we have to be more careful about it. we do have to cut spending tremendously but the budget is so far out of control to me politically it's impossible to get it back this year or next year. it is going to take three to

five, i'm not proposing that number. it is going to take longer than people think. because those barriers will still be there in the middle of the highway five years from now if we, if we don't ever raise the debt lim. and i just don't see how that's politically possible. by the way and i know i went off on a tangent here. one of the reasons we're at this point is the very same thing i talked about before and that is that we add republicans vote for medicare part d and no child left behind. by the way, i mean, i almost hesitate to do this, but he's a good friend of mine. paul ryan congressman from wisconsin potentially president some day. tall, handsome has a beautiful wife, beautiful children. smarter than all get out. i knew him when he was 17 years old as an intern to jack kemp. i love the guy. but he voted for everything i've

talked about. medicare part d. no child left behind. t.a.r.p. and the bush stimulus. every single one of them. i like paul. in his speech to c pack he said he thought we need to hold each other accountable. i want to hold him accountable why did he vote for those things? and why now should i believe he's the second coming of milton friedman. because he didn't vote like hayek and friedman. he voted like canes. so i mean, i like paul. i know a lot of people in here like paul, but who is he? what do we truly believe in government? so i hear what charles is saying and i believe it too. i think this is a centre-right country. i think that's where we want to go. what is it about government itself that causes people to do things they don't really believe in?

there's something wrong. do you teach about that? there's something wrong about it. all right so. that gets me to this second thing. that all of this spending has gotten us backwards not forward. government spending is not stimulus, it is antistimulus. all right. you all know that. if we could create wealth by increased government spending there should been a poor person anywhere in the world. if the multiplier really is one and a half to one. i spend a dollar of government money i get a sdwlar a half of government activity there shouldn't be a poor person anywhere. we should all be fabulously wealthy in. fact, we could just spend our way to bill gates' wealth. every one of us. because it will never stop. if a dollar creates 1.50 then that gives 50 more cents to spend and it would never stop. it's insane on the face of it. that government spending creates any kind of stimulus. because the bigger the government is, the small ter

private sector is. by definition. it those equal one. -- it has to equal one and the smaller the private sector is, the less jokes v. if you want to know why we have 9% unemployment, it's because government is so big. the last time we were stuck at higher levels of unemployment is back in the 19 -- 1970s. unemployment went from about 4% to 10%. then ronald reagan and bill clinton cut government spending from 23% of gdp back to 18% of gdp and unemployment went from 10% back to 4%. now george bush and barack obama have taken spending from 18% of gdp back to 25% of gdp and unemployment has gone from 4.4 at the bottom. actually 3.9 under bill clinton back up to 107%. -- up to 10%. by the way, this has an impact on investments too. in the early 1960s the p.e. ratio on stocks what each dollar

of earnings is worth was about 20. it fell to 8 in the early 1980s. the bigger the government is the lower the p.e. ratio is. now think about that for a second. what is a p.e. rash yoechl i'm paying 8 time farce dollar's worth of earnings or paying 20 times for a dollar's worth of earnings. what that means so i'm willing to take more risk. i'm taking more risk when i pay 20. i won't take that kind of risk when i pay 8. in other words, the lower the p.e. ratio, the higher the risk is in the economy. the high ter risk of bad things happening. so the bigger the government gets the lower the market's value is because the private sector is smaller. and so today what's fascinating about this is we have this bigger government and yet we have higher unemployment and lower p.e. ratios and people wonder what in the heck is wrong with the economy and lots and lots of people are going back and blaming the financial crisis and capitalism for this instead

of the government. all right. not you, but this is what people are doing and this all ties back to this belief that somehow we declared capitalism a failure. all right. so let me go back to these black swans that people are worried about. all right and by the way, this all ties to the butterfly effect too. edward lorenz and chaos theory. and i believe somehow we've been taken over by dead mathematicians lately. in other words, people are not willing to take a risk. why would i buy a stock. a black swan might peck me to death. or peck the company to death or something like that. capitalism just fails at random intervals and black swans appear and butterflies are flapping. i was in kansas last year around wichita. you know the butterfly effect.

nobody knows whether it was lorenz or ray bradbury who came up with it but that's the butterfly effect. i called my office i have two sharp young research assistants. i'm near wichita, i'm nervous. how many times day do butterflies flap their wings and you should see the e-mail i got back there's 7 quad ril yon insects. some are 3 minute flapers some 20 minute flaerps. used aver raj of 11 pnltz 2. turns out there's 12 second till yon butterfly flaps every day. so i e-mailed him back and said which flap should i worry about? and then i got to thinking about this because you know what's fascinating about this chaos theory these butterfly flaps is butterflies have been flapping since god put them on weather and some days stock market goes up and some days i goes down and sometimes there's tornado and

sometimes the winds are 48 miles-an-hour and sometimes there's a hurricane and sometimes you spill your coffee and sometimes you forget your keys and sometimes you get stopped by the train and sdwriems and -- and sometimes you don't. and life is just life. am i really supposed to believe all these things are interconnected and some mathematician can tell me how? i could go really spiritual on you in a minute. am i really supposed to believe that? because that's what people walking around are thinking. black swans are going to appear. butterflies are going to flap. all of my best laid plans are going to fall apart because capitalism doesn't work. just a random walk down main street. with dangers lurking everywhere. i think press has something to do with this. but it's like it's these mathematicians who want us to believe that. and then i started thinking even deeper about this. is there anything we can trust. is there anything? is it just a random, i mean,

capitalism just fails at random intervals or is there something we can really believe in. and then it dawned on me and you know this every day when we wake up and look at the world around us we're seeing black swan. bit's a positive black swan. this back swan lays three pound golden eggs on your doorstep. it doesn't take your stockport toll owe down by -- portfolio down by 50%. doesn't cause your house to go into foreclosure this black swan is trustworthy and you know what it is, it's america. you think about america. america is, thank you. [applause] >> this country is a black swan. you know the 2000 year history of economics right. this will take about three hours. 2000 year history of economic for 1800 years nothing happened. last 200 years everything did. now it's a gross

generalization. i know. but you get my point. actually go back. let me ask you this question. in 1750. how did we farm? well, you won't answer it like i will but i'll say we got an animal. horse or whatever. dragged the blade through the ground, put some seeds where we dragged the blade through and parade for rain. how did we farm in 50 ad. same exact way. isn't that a white swan? imagine. go back to 1750. you're a farming buddy. joseph. he's in the out house. you yell over the top. hey joseph in 200 years you're going to be able to do that at 41,000 feet. [laughter] >> he's going say go back to the sal loon. by the way he's not this there

dreaming about dick tracy two-way watches you know what he's thinking about. he's thinking great granddad got 29 bushels an acre. granddad never beat him dad never beat him just rained on may 19th and earliest rain in 16 years and i'm going set the family record this time he's not in there going well, if i download this gps data into the laptop and plug it into the tractor and then you know, the cubs game is coming on so i can put that on the saddle lite radio and we can get this field plowed and i'm going to get 132 bushels an acre. what i'm getting to is we didn't have science fiction in 1750. we did not have it. jewels vern was the first science fiction writeser and that happened in the middle of the industrial revolution. isn't that what we mean by black swan? for 2,000 years you farm the

same way and then all of a sudden everything changes. all right? that's a black swan. and when i look at this, i say that's the one i want to believe in. it's been true for 236 years. actually a little bit before. magna carta was part of it. the u.s. constitution was part of it. all these things were part of it but you get my point and so the question then becomes ron paul why love dearly. goes on tv and he says civilizations only last 200 years. and we all know what he means. many other people said. this but what they're getting at is obviously that we tax each other to death. that we grow too complacent bure rock sis you know, and all of that stuff happened but here's my point back and that is, no civilization that has operated under the u.s. constitution has ever failed. right?

so i'm not saying it can't happen i'm just saying it hasn't happened so don't let history scare you about this because we don't know. what happens to countries that have the u.s. constitution. i mean, this healthcare law could be struck down major, major parts of it because of the constitution. and i think it will be by the way. all right. and so i in the end it's more than just waiting two years to see what happens in an election. ..

>> we are 12% inflation, the highest we ever had in this country, and yet, we recovered out of that, so in my opinion when i look at this is i have a hard time getting pessimistic about it. by the way, i think those people who get too pessimistic are missing a great thing. i've already told you. you missed a 100% rise in the stock market, 100% rise if you sat and worried about the republic and the debt taking us down and turning us into greece. what i try to do in my business is remind people not to mix their politics all the time with their investing and economic

thinking. it's really important. now, we have a job to do on the political side, but we also have a job to do on the economic and investing side with our businesses, with our finances, with our inherents, with all those things we have to do, and a lot of times you have to separate the two. what is the danger politically will eventually affect us, but maybe not for 5, 10, 15, 20, years, we're 30 years away from being a greece. i wish i could dell you it's tomorrow, but it's not. i don't think we're going to get there. i want to be fully invested and at the same time fighting like a madman getting bloody in the streets, oh, you are not allowed to say that. [laughter] being fully invested gives me more money to give away. i have 100% more money to give away to give away than two years ago because i stayed optimistic

on the market. right now, here's another amazing statistic. we economists calculate all the personal income so it's interest and dividends and wages and salaries and represent and small business profits and farmer's income and all of those things, and then also added to income is all the redistribution from the government, and right now 18.5% of all income made in this country is redistributed through the government, 18.5%. it's never been anywhere near this before in history except for last year at 17.8. the bottom line is it's straight through the roof. another way to think about it, round it down to 18%, 82 people are pulling the way gone, and 18 people are in the wagon. that's amazing to me. of the 82 people, 10 of them work for the government, so really you can say 72 people

pull and 28 are in. i won't do that. 82 and 18. it's the biggest we've ever been. more redistribution, more social democratic tendencies of our nation if you will, if you use charles' point of view about obama, than we ever had in this country. what lots of people want to do on our side so to speak is to complain about how hard it is to pull the wagon, so we talk about how that's causing slower growth and higher unemployment, and all that is true. we talk about how the economy, you know, the economy could be doing better, and all of that is true, but i think there's a deeper problem here, and, in fact, i think arguing about the economy and the stock market and all that makes us oftentimes sound very materialistic. it's not about how hard it is to pull the wagon. by the way, isn't it amazing with 18 people in the wagon,

we're still growing? by the way, all i say is one way, ipad. [laughter] the technology boom has made us more productive. it's allowed us to drag 18 people in the wagon. go back to 1750 again, imagine you were in, you know, most people were in agriculture back then. imagine if we said you have to carry 18 people around on welfare, on unemployment benefits, in medicare and medicaid, social security, that's 18 people out of 82, we couldn't have done it. there wasn't enough surplus. go back far enough, you couldn't, cave dweller days if you will, your fire went out, go to your neighbor to borrow fire, you're dead. you lose your blanket and it's winter time, go to your neighbor to take his blawpght, you're dead. we didn't have anything to

share, all right , all right? what wealth does is allow us to share. this is about me for a second. i have been taught and i believe that we are a brother's keeper. i've always been taught and i believe that we are to take care of widows and or fans, so i believe there are some people that are going to be in that wagon all the time, and i personally thank the lord that we can do that and help those people, but it's not 18 people. i don't know what the number is, you tell me. is it 7 out of 100, 10 out of 100? it's not 18. here's the point, let's call it 8. that's how many people would be in the wagon if we were our brother's keeper. there's ten people in the wagon that shouldn't be. those people are the ones i cry for. you know why?

because we're put on this earth to serve fellow man, not to live off fellow man. we're here to live up to god's desire for us, not to wisen the wagon and live for everybody else. wee are here to be innovators and creators, and so those people who are in the wagon that shouldn't be in the wagon, every day a little piece of them, a little piece of their soul dies. we're killing people. we're killing generations of americans by putting them in the wagon. i'm not talking about how hard it is to drag them, and it's not easy, and it slows us down and we're only growing 3% a year instead of 5%, but what i'm getting to here is we ought to talk about what it does to the people. that's the real moral sin, not about having to drag the wagon. [applause] anyway, when it comes back to it, i work in the private sector, we're a money management

firm. i'm optimistic. it's all about wealth creation, all right? that's what i want to see happen, and the best way to do that is smaller government, lower taxes, we all know that, but this battle has been kind of amazing because it started off by lots and lots of people even on the conservative side thinking that capitalism failed. i don't think it did. i think if you have the right narrative about it you cannot use it to justify bilgier government now or in the future. thank you very, very much. [applause] >> take a few questions, there's two microphones there, line up, state your name, and you can moderate back and fort. we have 10 minutes for questions. >> all right, thanks, bob. >> yes, ma'am? >> is there a button? >> oh, now it's on. >> i'm ellen road, yes, there

are conservatives in boulder. i don't remember what book was ill lot straited in -- illustrated in, but i think it was more pessimistic tanning to -- pertaining to unintended consequences, going back in time and meaning the future turns out differently, but i noticed this about our government. i was at a fundraiser with and they were apologizing for vote r for t.a.r.p.. his suggestion was that we here in washington something happens to you. you get into that capitol, and everybody is doom and gloom and it's going to crash unless you vote for this, and he health he had to vote -- he had to vote for this. what can we do to change that so that we've got a connection to our congressman so they know

what's happening out here? it seems like they live in a bubble and it's all over. >> yeah, you know what? i don't know. i think one the easy answers -- i thought about this for dollars, days, years on end. i mean, i hate to go back to this. it's crazy, but term limits. when you don't have to vote, when you don't think of this as a 30 year career, then you are willing to do the right thing, rather than buying votes for the future, and covering were butt for the future. i think that's what washington ends up being all about is like it's that vote was a cover. i don't know if this is the right thing or not. they didn't know how much -- why is it $700 billion they asked? well, we need a big number. can you justify it? no, i can't. it just needs to be big. you know, which, by the way, the market went down after

t.a.r.p.. you know, they invented every letter of the alphabet by the way. the fed pumped trillions in, and the market went down and down and down and down, and the day that we change market to market accounting or we knew it was going to be changed, that's when the market bottomed and everything heeled. it's hard to prove to them, but one of the key reasons, you know, i mean, there's -- why do these -- if you want to be chairman of the budget committee some day, you know, maybe you want -- maybe you feel like you have to vote a certain way not to alienate people because you need this in ten years, and i think what happens then is people think longer term it's about them and not about the policies. term limits are one way, yeah. >> steve olson from greenwood village. >> hey, steve. >> talk a little bit about the rules, the tax laws and the

regulations that i think force so much of our manufacturing and work overseas and in the efficiencies that we have, the productivity we have, and what are we doing that could bring those jobs back? i think it has to do with regulation. >> sure. there's a whole bunch in this. i mean, obviously we have the highest corporate tax rates in the oecd. by the way, canada right now has a lower unemployment rate than united states. for 30 years theirs was 3% higher. now it's lower for a year. their total government spending they cut from 53% of gdp to 39% gdp with a 15% corporate tax. ours is 35% corporate tax. they are killing us. why would i build a manufacturing plant when i can build one over the border in canada and have a much better environment, but also, don't

forgot that productivity played a huge role in the loss of manufactureing jobs in the united states, huge, and it's going to continue to. we are still the number one producer of stuff in the world. we outproduce china by a significant margin. we do more value, added stuff, they do less value added stuff, but we are still a huge producer, but we could be so much more competitive. you're absolutely right, and i look at corporate taxes as one of the things. yes, sir? >> i'm don armor. >> hey, don. >> the question is is it a trap to agree to with regard to the budget negotiations that everything is on the table because that basically says that for a dollar you're agreeing that a cut of a dollar in spending 1 going to probably have an increase in taxes to institutionalize the excess spending you referenced. >> yes, this is a big worry. if you were to put a balanced budget amendment in, that's a

value added tax or something like that. that's why i believe what we need is some kind of limit on spending, not just a -- we can't just always focus on the deficit. we have to look at a limit on spending growth. colorado has, what is it population plus inflation or at least you did at some point. i'm not an expert on all the state laws, but we need something for spending on the federal level because literally leaving everything on the table means you're just raising taxes, and in a static model we know raising taxes -- it doesn't mat every what tax rates are, we're never going to get more than 20% of the gdp in federal taxes anyway. spending needs to be 20% of gdp, and that's one of the things i'd like to see us really work on is some kind of approach that brings spending down to no more than 20 or -- i mean, i'd like it to be 14% of gdp or 10%, but

no mar than 20% of gdp because that gets us a balanced budget but without using just tax hikes to get there. >> i'm micah from rural colorado and graduated from this program in 2008. i get your e-mails and watch your show since 2001. a lot of my decisions were based off of your economics, and it's helped, so thank you. you said earlier it wasn't a failure of capital iism, so what is the number one roadblock of us getting to a real capitalist economy? >> yeah, that's a great question. >> what i mean, it's clearly our government. the tendencies by the way, i don't know how many of you read ken thollat but he wrote "pillars of the earth, and "world without end," books about the 12th and 13th century.

they are awesome books, easy to read. it's historical fiction. it temperatures you the depravity of man. you give people power over other people, they will always abuse it, and this has been going on since man was put on earth, and so the number one literally, go read these books because it tells you what it is. it's the depravity of man, and you can't stop that. what you have to do is limit government. last night charles said, you know, the greatest collection of political lines in the history of the world showed up on the shoulders of the vast wilderness. how in the world did that happen? so the bottom line to me is that what the road in the u.s. constitution is literally the best law against the depravity of man, and we just have to make sure that it's not changed, that it's not living, breathing, you know, all that other junk because that's what does it.

[laughter] [applause] >> steve from ft. collins. is there a connection between what social security takes in and pays out particularly in light of fica tax reduction? what is the difference between government forcing me to buy health insurance and the government forcing me to buy retirement insurance, and in your opinion, is it appropriate for the wealthiest 10% of retirees to receive any money from the federal government? >> yeah. you know, what's interesting about this is i mean, all these questions, i'll answer this is a broad based sense. no, there's no link. there's unfunded liability, so nobody -- there's never imbalanced. on a gap basis -- i wrote the other day if the u.s. federal government was a bank, the fdic would have closed them last night. they are broke. no doubt about it. the second thing is that this

concept of what they did was with social security is it was never a retirement plan so to speak. it was a safety net, so i think legally it's a tax, and then social security payments are the safety net payments. now, we've learned to call it sort of a retirement plan, but there's no difference between this and health care. you're absolutely right. this is why they tried to call the health care penalties a tax because it worked for social security, so it will work for this. they are not getting away with that because it's not the same, but now i think we're going to end up means testing and i think we're going to raise the retirement limit. i don't think that's fair, but you ask most people who are younger, they will say they don't expect social securityny way, so basically this is just a tax i pay, another tax i pay, and that's what i mean about fair. it was always said that you'll get this back in retirement. i don't know.

i haven't read all the history about it, but it's going to happen whether it's fair or not want i think what we need to do, and you know what i'm going to say, we need to go to a private system. by the way, this is why it's so important that we don't allow this argument to exist that capitalism failed because i've heard republicans -- i hate to use the word conservative, but republicans argue, well the market's too iffy. there's black swans and butterflies flapping, and i hear what you say, but there's the chaos theory about it. we can't trust the market. "wall street journal" wrote a story about how people are struggling with their 401k's. they saved money, and now it's not as much as it should be. now all you can really count on is social security or medicare or pension.

we can't let that argument lie. yeah? >> andrew from parker. i have a bachelors in economics. capitalism was not the problem. i think government makes swans good eating. what swans are needed or hunting laws changed to make sure the swans make more swans? >> that's good. by the way, when -- i hate to bring this up because i'm going to fly later today, but when an airplane goes down, does anybody question bernouli? [laughter] he must have been wrong about fluid dynamics. no, they don't question him. capitalism, by the way, it can't fail. capitalism is an organic method of people working together. it is -- it's not something we

invented. you know? it's not -- it's natural. it's a natural order of thing like when air flows over a wing, it causes lift. when you allow people freedom they form markets because it's efficient and specialize in labor. that's capital. i. it didn't fail the the way you get more swans producing and golden egg laying swans is get more freedom. when people are left -- [applause] and i'm telling you thank you for that. i'm telling you what you already know, but it's so clear from history that to me we shouldn't even have to argue, but these are the dark forces -- i'm telling you, read those books. it's amazing how something that happened in 1100 happened in this day. >> kevin, you have to be the last question.

sorry for the others. >> thanks, kevin from lamar county. the ones relative specific prediction i heard you talk about is inflation, not hyperinflation. can you unpack that a little bit? how high is up over what time frame? how do you navigate the deflation pressures and inflation pressures we see, and because this is public policy forum rather than a conference, what public policies can you take to alleviate those things? >> sure. by the way, inflation is the printing of money. all right? i mean, the best book on economics ever written in my opinion was human action. it is very hard to read, but it is the number one book written. i've read it five times, taught classes, i've taken 30 students

through it, and he says it very simply. it's the printing of money. now, in a more practical sense, inflation is raising prices, another way of saying falling value of the dollar. i believe we are clearly there right now. we have inflation. commodity prices are up. all this talk of deflation by the way, is because of economy's weak and unfloiment is high. these are philip curve arguments. they are not monitor os treian arguments. they would say there's no chance of deflation today, and that's what i would say, so, now, then you get to this idea of quantitative easing or the quantitative easing if you watch the video of the goldman sachs, and anyway, this subject right here we could do a class on it, all right, but let me just

briefly say that the federal reserve has gone out and bought bonds, injected money into the system, and the banks in a sense have outsmarted them because what the banks have done is they have taken that money and they have given it right back to the fed, and it's called excess reserves. . . and move into the government's balance sheet. that is totally wrong. it should have never happened.

the federal reserve is bigger and more involved in our economy than they have ever been, but what they haven't created money because these excess reserves have been turned into loans. yanks are outsmarting the fed. they are giving these dollars back to the fed, so therefore i wipe that off the table is as a cause of inflation and what i'm looking at a zero percentage is straight. by the way think the federal funds rate should be about 3% today, not zero. bachan 04 it should've been for instead of one. so they are about as easy as they were back then right now. there is a bubble happening in commodities, and it is happening and you can see the impact and of china. is growing very rapidly partly because the fed is easy. you can also see it all over the middle east and northern africa because of partly, because of food prices. by the way, one good thing i hardly ever hear people talk about it but george bush, not everything -- i don't complain about everything that was done under that administration but

going into iraq, one of the goals was to set up a democracy in the middle east which would cause pressure on the government of all of these other countries and it is coming to fruition right now in front of our eyes. i think a lot of people don't realize where some of this pressure is coming from. but monetary policy is part of it but it is also the democracy that was set up in iraq and in afghanistan that is putting pressure on these countries as well. anyway, so my forecast by the way to he wanted no 3.5, 4.5, 5.5% inflation. of is to win 27 it wouldn't shock me but it isn't hyperinflation because the banks are just, they're not lending us money out. they are putting it right back and the fed and again that is the money and banking class that we would really have to go through to explain fully, but you know, it's easy to say trust me but trust me. thank you very much.

>> up next on c-span2 an update on an employment discrimination class-action suit involving walmart.

>> the situation is bad for everybody in iran, but this is one side of the crime. the other side is saudi arabia but it is the darkest side. we live in a very dark area. nobody knows about our stories that have never been heard because we have -- we are very strong in terms of oil. we support the oil and also it is the islamic country where islam is this -- of islam. >> now a panel of attorneys and law professors look at a class-action class-action suit against walmart. it involves alleged employment discrimination of female workers.

next week the supreme court will examine whether the lawsuit can proceed as a large class-action suit. this program is hosted by the american constitution society. [inaudible conversations] >> hello everybody. we are going to go ahead and get started. i would like to welcome you to today's program, the future of employment discrimination class-action, a briefing on walmart bee dukes. i'm carolyn frederickson the executive director of the american constitution society for law and policy. and for those of you who are not familiar with acs we are a network of lawyers, judges, policymakers and academics and law students dedicated to restoring the vision of our constitution and protector is human dignity, individual rights and liberties, genuine equality,

access to justice, democracy and the rule of law. walmart v. duke -- duke says many of you know is one of the most anticipated cases before the supreme court this term. and oral arguments will be heard next tuesday, the 29th of march. in the decade since this litigation started, many would argue that little progress has been made in eradicating work place gender discrimination and indeed a recent report by the department of labor demonstrates that working women still earn significantly less than working men. walmart versus dukes will have an impact on how future iniquities based on sex discrimination will be remedied or not by the courts. as a supreme court sorts through the technical issues and narrow questions of class certification that are presented, we must understand what are the broader

implications of this, the largest employment discrimination class-action in u.s. history. will class-action be an available response to workplace discrimination post-walmart? what will a decision and walmart mean for the future of all civil rights litigation? is the supreme court, as some say, inclined to wait corporate interests, higher than those of our nation's workers? and can we look to recent court decisions for answers to these questions? we are very fortunate today to be joined by a distinguished group of experts to examine these and other questions. i have a very great leisure of introducing today's moderator, professor selmi. michael selmi is samuel tyler research professor of law at george washington law school. he teaches courses on employment

law, employment discrimination, and constitutional law and has been widely published on these and other subjects. prior to entering academia michael litigated employment discrimination cases with the lawyers committee for civil rights under law and with the department of justice's civil rights division. michael also served as a law clerk to judge james r. browning, who was then chief judge of the ninth circuit court of appeals. so please join me in welcoming michael. thank you very much for doing this today. [applause] >> thank you very much and it is an honor to be here. before we get started with the panel i just want to give a quick summary explanation of the posture of the case because it is slightly unusual in the way that this case is arising in the supreme court. the claim was filed against walmart sex discrimination nationwide in 2001 by a group of

attorneys who formed the case around some claims and the case was originally filed, it is filed in california. although the case has been pending for 10 years, not much has actually happened and that is the one part that i wanted to just frame because that is going to be a lot of the discussion by the panelists. the case involves classwide allegations of sex discrimination and pay and promotions by walmart and a lot of the case involves statistical analysis in part because the class is so large and because they statistical analysis is able to identify patterns across the company that would not necessarily be present are evident individually and that is one of the aspects of the case as it proceeds. the question that is still being argued about is whether this case can be heard as a class-action, whether it can be done collectively as opposed to

individual cases. and that issue was originally confided -- decided by the court in san francisco in 2004, so we are seven years out from that initial determination and that is the issue that is still present, the district court in san francisco held that under the federal rules of civil procedure which govern the process and particularly rule 23 here and there were different components about that are likely to be discussed, that the case could proceed as a class-action and in fact it was advantageous to proceed in a case like this given the size and the common issues. that decision was twice affirmed by the ninth circuit court of appeals over the ensuing seven years, and once by a three-judge panel and then in the ninth circuit they were also able to have a broader court although not the full court consider it and then there were 11 judge panel that upheld that certification decision i have

voted 6-5. the supreme court is now addressing the issue of whether the walmart case is appropriate to be handled as a class-action. some of the issues in that question involved the nature of the allegations with respect to sex discrimination but it is possible that there case unfolds in the supreme court they will only address the class-action issue and not get involved with the sex discrimination component. the panels will discuss that more and i just wanted to give you that framing. probably the most advantageous thing for the plaintiffs given the cases in the supreme court is the supreme court actually moves quickly so it won't be another seven years. from start to finish it will be about eight months and we should have the decision by the end of june. so with that said, i'm going to introduce reduce the introduce the panelists as they come up rather than do them all now and their first panelist is marcia greenberger and she probably does not need any introduction

but she still deserves one so i will give you a brief introduction for her. marcia greenberger said co-president founder of the women's national law center where she has been doing work on issues relating to gender, equity for many years and great work at that. she is a recognized expert in women and law and his work on a number of landmark litigation cases and also legislation including the most recent legislation in this area, the lilly ledbetter pay their act so please welcome marcia greenberger. [applause] >> thank you so much for that introduction. thank you so much acs for holding such an important session. because this is one of the most important cases involving whether or not discrimination laws will have as a practical matter the force of intent that

they were intended to have when congress passed them. it will depend on whether or not workers, employees such as the women in walmart, can band together to be able to bring to light the full panoply of discrimination that is affectinn with respect to pay and promotion. especially a large employer, and of course walmart is the largest employer in the country. in the introduction, i was described that i had work on the lilly ledbetter case which is true, and then legislation, the ledbetter fair pay act that was passed in response to a 5-4 supreme court decision just a few years ago, which also seem to be on a technical issue. that was an equal pay case brought by one woman, and the

question, the technical question was whether or not she would be out of time in filing the equal pay case. in truth, when the court found 5-4 that she was out of time, it undermined the ability of employees generally to vindicate their rights in court. here too are workers banding together to demonstrate a broad pattern of discrimination. and that is so essential. the bigger the employer in many respects, the more important the class-action vehicle is, both to elucidate the nature of the problem, to make it practically feasible to come up against an employer the size of walmart, and to be able to discover and determine all of the facts at

issue. there are a few things about the facts of issue in this case that i want to underscore just in setting the stage as the discussion goes on. first of all, one thing that is quite common in this case was in place with respect to the ledbetter case and many other work laces. employer has a policy that employees are not supposed to talk about their pay. therefore, in lilly ledbetter's case, she did not find out until decades after she had been working at goodyear that in fact she was paid less than her male colleagues and only found out from an anonymous note. women in walmart, men in walmark about their pay with each other or to ask about it.

from each other. so that pay practices are discretionary, which allows as a policy that walmart set out which allows managers a broad discretion to determine with the pay should be, shrouds those decisions in secrecy. it does not set up standards as the plaintiffs alleged, that would allow and ensure for the kind of consistency and fairness that would root out discrimination, but rather as the experts described it, because of that kind of discretion, reinforces stereotypes, old lawyer networks secondly, a practice described

that walmart is the failure with respect to promotions to post jobs routinely that are available. therefore, in many instances, as described by the plaintiff, women did not ever know that there was a possibility for promotion to be able to apply for the job. and often only found out after a person was selected and the statistic showed far more often a male employee than a female employee that the promotion was available to begin with. under the evidence provided in the walmart case, women had higher work evaluations than men, lower pay, fewer promotions and the further up the ladder they went, the fewer promotions they got. and also, they had to wait

longer to get those promotions, even if they knew about them and got them. so, it is a reinforcing web of lack of policies, lack of procedures, that would encourage fairness, transparency, that works to the disadvantage as experts described, in a broad-based way all across the country at walmart, but it also a set of employment practices that we find in many employers across the country, and are best able to be uncovered and ultimately remedied through the

class-action kind of mechanism. buttressed by the individual stories that the plaintiffs like betty dukes described of her situation, and there were about 120 sworn statements and declarations filed by other women employees across the country at walmart, who described classic sexist comments about the women employees. women don't get the same pay as men because they are working just to work, but men are working to support their families. women don't need as much pay as men. women aren't as aggressive in applying for promotions.

of course if they had known about them at may have affected their aggressiveness. meetings being held, let's put it that seemed from some of the examples to be some of the better places where some of these meetings were sometimes held. so these specific examples buttress the statistical disparities in pay and promotion that the experts showed across the country at walmart. i'm going to stop my comments now, but go back with an observation that i made in the very beginning, and that is through the most technical and dense sounding legal issues, this court will ultimately decide whether employees in this

country -- women in this country, minorities and others, our older workers, disabled workers, will be able to hold employers accountable, or whether it will be left to an individual to uphold and protect her rights against the biggest employer in this country and have to find the resources on her own to combat the kind of litigation that has taken now 10 years just to talk about these maneri matters before you ever even work to get to the chance to carry the burden that plaintiffs have of proving that this discrimination they are describing has actually taken place. enormous resources, walmart is perfectly entitled to marshal

them, to defend itself in court, but it is the class-action mechanism that allows employees to be able to bring these issues to the floor and to allow justice to be served and ultimately fairness to be meted out, and in these economic times, if ever there was any time when women workers and the families that they support me that fairness and justice, it is in these times. thank you. [applause] >> thank you very much. our next speaker is suzette malveaux who is an associate professor of law at the columbus school of catholic university where she teaches courses on the procedure in complex litigation and the employment discrimination so we have got the combination with respect to procedure and the discrimination issue.

her law practice also included employment discrimination and class-action work so we have got great expertise. please welcome suzette malveaux. [applause] >> thank you how much for having me here. i'm going to address one of the issues that is squarely before the supreme court. it is little technical so bear with me but it is very important. and the question here is whether or not the plaintiffs in walmart can seek monetary relief under this particular class-action rule and if they can, under what circumstances can they seek that monetary relief and then let it back and think about why is that important to employment discrimination cases? first of all, as was mentioned before rule 23 is what we are looking at. rule 23 t. two in particular but

it is appropriate if you have it defendant that acts in a way that is broadly applicable to most people in the class, then it is appropriate to have a class-action, and they are seeking an injunction or maybe a declaration. so for example if everybody is challenging the same general practice, the same sort of systemic conduct in the workplace, everybody pretty much shares the same goal. if we share that same goal, then we are united in and it makes sense for us to come together as a class. and because of that, under this particular rule, the lawyers don't have to send notice, individual notice to every class member and i don't have to get our budding opportunity to get out of the litigation. and we allow this because the class by definition is very cohesive. we are all employees. we are all challenging this particular policy that is in place, so maybe we want an injunction. we want the court to say we want

discriminatory policy to and. we want a declaration. we want the court to say hey we are declaring that your conduct is illegal so we are bound together and we are a cohesive class. not surprisingly, this is exactly the type of class-action that has been popular for civil rights cases. in fact, the drafters of this very rule told us that this is what we designed this rule in mind with civil rights cases in mind. it was designed for exactly the kind of case that we are looking at with the walmart case. we want an injunction for policy. we want a declaration. we think it is illegal. now in addition to this injunctive and declaratory relief that the plaintiffs are looking for they also asked for monetary relief and certain types of monetary relief. that is important. they asked for back pay and punitive damages. a sickly what i mean, back day is simply wages, salaries, any

kind of monetary relief that you are entitled to that you were denied because of the discrimination so but for this discrimination i would have been paid axe that i was paid y. and that that pay is just meant to make somebody whole again, to put them back in the place they would have been but for discrimination and we know often backpay is easily calculated. is based on a formula. the employer has the data. we can calculate that without too many complications. now plaintiffs were also looking for punitive damages, and punitive damages are brought out particularly in serious cases, serious circumstances where an employer may in fact have discriminated with malice or reckless indifference to the federally protected rights of its workers. and so here the idea of punitive damages is not so much out of we compensate individuals but focusing on the conduct of the employer and the idea there is to punish the employer and deter future misconduct.

so we know the plaintiffs and walmart are looking for that too. finally there is something called compensatory damages. the plaintiffs didn't pursue those damages but that is important to know about. conservatory damages to compensate somebody because of an emotional harm and distress they have been through, mental anguish, sort of a loss of enjoyment of life. those were pursued here because those are more difficult in terms of having individualized hearings. you can't really bring that necessarily together. so the plaintiff here sought monetary relief on the question is, is any monetary relief from it? well the answer is yes. walmart argues that this rule bans monetary relief, but that is not true. if we look at the rule, the rule is silent. the rule doesn't save that monetary relief is allowed and it doesn't say that it is prohibited. so you can import language into the rule if it is not there. how how do we no monetary relief

is available for the plaintiffs in walmart? because the drafters of the rule told us so. they basically said the advisory committee in their notes indicated they had it mind anna terry relief when plaintiffs were coming forward, as long as the monetary damages you are seeking are not going to be predominant. they are not going to take over the case and be more port and in the injunctive or declaratory relief and affect all of the courts of appeals who have looked at this issue have agreed, have come to the same conclusion. so this is a a well settled law. the only issue that is really open is whether or not if you are seeking monetary damages, do those monetary damages have to predominate? i want to say something about that day. because back pay has historically been allowed in title vii cases. title vii of the civil rights act of 1964 and that is what language were looking for. backpay is considered equitable

relief related to that declaratory relief and because of that courts for decades have allowed backpay. it is a critical component to title vii remedial scheme and to enforcement of the employment discrimination laws. and we know that day is critical to eradicating systemic discrimination, to making people hole, and to deterring future misconduct by employers. and so the only -- and in fact that pay is so important the supreme court has said there is a presumption in its favor. so we know that is important to the enforcement of civil rights, and we know that monetary damages are dealt with a little bit differently. the courts there, they about monetary damages like compensatory damages and punitive damages but those damages do have to be careful that they don't nominate, that they don't take over the litigation because the courts have recognized there was a little bit of a risk there that

the class members may not chair the same interest. talked about compensatory damages. you've might not be able to plug into a formula. everybody sort of takes the discrimination in different ways to have to figure out whether or not that relief predominates. so really the question is before the court now is how do you measure for dominance? how do you figure that out? it turns out the courts of appeals are divided in three ways. they have come up with three different tests and so the supreme court is going to have to figure out how do i resolve that three-way circuit split among the courts? if i could conclude with telling you, why does this matter? why do we care here in terms of if this case, if you can't have a class-action? this is very important because plaintiffs, it may become more difficult for them to proceed collectively as a class-action and for many people, employees,

consumers and so forth this is the only access they have, meaningful access to the court system. so we want to be careful to protect the class-action device and make sure that people continue to get backpay to eradicate systemic -- and to differ future misconduct. [applause] >> all right, our next speaker is andrew trask who is counsel mcguire woods. his practice focuses on class-action defense. we will have a different perspective here. adam is the co-author of the class-action playbook and maintains a class-action countermeasures blog which discuss a strategic and consideration involving class-action defense. please welcome andrew trask. [applause]

>> hello. can everybody hear me? adjusting the mic is sometimes an issue. i got asked beforehand as i was eating my lunch whether or not i was the token right-winger in the panel and i hate to disappoint you all but my that my mother had me handing out michael dukakis for governor buttons when i was much smaller. that hasn't really changed actually, so i'm not appear really to espouse the right wing view. i think i would also be appear to defend walmart and my answers going to be no. here's the thing. walmart is the country's largest employer and has 1 million employees. it has a market capitalization of 174 billion, that is what the v. dollars. it has assets of 170 billion that is what they be again in dollars and it had sales last years of 384 billion with a b. dollars. walmart can take care of itself so who am i up your talking about then? i'm going to talk you actually about all the people who are not in the caption of the case and

those are the absent class members as they are. labor to. one of reasons why rule 23 is so important is it allows people like betty dukes and keep in mind this is the david versus goliath matchup. betty dukes is a grader at walmart. her job is to stand on her feet all day wearing a blue vest and make people feel welcome to her store. she is one of 63 named plaintiffs in those are people who actually put their stories out there. there are behind them 1.6 million other women and the issue here is whether not that he dukes and her 62 fellow named plaintiffs can adequately represent all of those other people. if you roper betty dukes can you take that verdict and handed over to these 1.6 million women and still have their cases be proved? that is what rule 23 at its heart is about and why it is so harmful and what is so important to be used carefully. 's the two things i want to talk about today are two of the really difficult issues the court is going to have to face

and they bow have to do with whether a rule 23 was used carefully in this case. i don't think anyone here will argue that walmart has noticed noticed -- gender discrimination. there is going to events and discrimination they are there so it is not just walmart blameless. is it is this third right way to try the case and that is what the justices will be focusing on. let's focus in on the two most technical and at the same time important issues that are going to. one of them professor malveaux did a great job of describing to you and that is which bucket to put this piece and when you look at the second part of the rule? there were two parts of rural 23, 23a that everybody estimate and 23 b. are depending on the type of case who are bringing you have to prove different thing so let's start with the end part. let's start with 23 b.. there are three buckets and 23 b.. the first bucket we don't care about here. nobody is burned up and and of the and let's call it the zero-sum game bucket. this is when you have a case

where anyone class members bernard would actually deprive everybody also getting their fair share of whatever is in dispute. you can think of it like bankruptcy although that is not exactly what it is. the 23 v. to bucket says it is for injunctive and declaratory relief. that doesn't say no money but it doesn't say money either. justice injunctive and declaratory relief and that is a label on that bucket. the third bucket is traditionally used for money damages than anything else in with a fair bucket you have to jump through a couple of extra hurdles. yet to demonstrate the common issues predominate and demonstrate the class-action is better than any other way of resolving the dispute. we call that superiority. the reason you have to do that is because when money claims are an issue people said they care a lot more than if it is just an injunction. not that injunctions on important that an injunction is going to go up no matter what and people are going to be affected the matter what, so it doesn't make sense to ask people whether or not they want to opt out of changing a company's behavior.

behavioral change the matter what. with monetary relief you release your claims in exchange for some money and if you are going to make that trade, if you are going to trade winds for money they need to have proper notice and the notice requirements are different between 23d to that injunctive duckett and 23b three mack. the question is what is this case about? is about getting the injunction against walmart or is it about getting the monetary relief? frankly, in this case one of the things the court will have to wrestle with is the following fact. there were 1.6 million women and the certified class in the lower court. 800,000 of them, that is half, are no longer employees of walmart. changing walmart's behavior does nothing for them at this point. they are only in it at this point for the money. the other 800,000 are in it for both the injunction in the monies of the question becomes when really the only reuniting the class should you really put the immune junked it okay.

that is the first question. as you can tell from the way i framed the question i disagree with professor malveaux. i think even though you can have that backpay in this case it is the money driving the case and not the injunctive relief at this point and that matters. why does that matter? because these 800,000 people who are out there who want going to benefit from the injunction really care about whether or not they get heard in the case and the only way they are going to get the opportunity to opt out of their claim is particularly strong is if it is put in the money bucket as opposed to the injunctive bucket. you see in the money bucket you cannot doubt of the class of you have a very strong case. if your case is stronger then betty dukes. in the injunctive bucket again and that is important thing going forward for women who may have suffered greater discrimination than betty dukes did. the other issue i want to address very quickly is the other thing the court is addressing and that is the issue of what is called commonality. that is in the rule 23a section. therefore things everybody has to demonstrate if they want to have a class certified.

numerous today. we have 1.69 women here. is not an issue. nobody's arguing this one. commonality is the second one and the question is if you have an issue that is common to everyone, is that enough? ordinarily commonality is a low bar to meet her go but it is not so low it doesn't exist. we could define people in such a way that i matter how we do to find them they'll have a combination. the combination. we could simply ask, did walmart treat these people like human beings? it is, question but the problem is the answers that question is going to take you far in the litigation. to prove discrimination you still have to prove how it was the walmart treated you inhumanely. in this case we are not too far away from that level of generalities with the questions being defined. the question that is being defined and i will use some of the language used by the plaintiff expert in this case is whether or not walmart fostered a "corporate culture that allows for gender stereotyping." and the corporate practice of

giving store managers excessive subjectivity multiple types of personnel decisions. when you asked a question like that it is pretty easy to say it is common to everyone here but the answer is going to make a lot of difference to many of these women. in order to prove that they themselves were discriminate against they will still have to bring forward most of their claims and that means you have held a huge trial for very little progress at all. that is not to say you couldn't certify a class against walmart. very briefly walmart has 41 different retail divisions all of which are staffed by their own vice president who makes policy. you go breakdown of class-action to 41 of these. right i think the damages have been put at roughly a billion dollars. still enough money to make a lot of lawyer salivates a still enough to allow for a class to move forward but this class the way was certified may have been too big and too diverse. that is one of the things the supreme court will be wrestling with. thanks very much. [applause]

>> whenever i participate in a panel like this i always hope there are no law students in the audience because in terms of the intricacies of rule 23 we would torture them for days if not weeks and we just have 14 minutes clear concise and actually complete analysis. [laughter] and we will have a bit of additional work with adam kline on related issues. adam kline is a partner with -- and chair of the practice group. his practice is limited to the prosecution of class-action and the impact of litigation employment discrimination and is testified in congress and been involved in discrimination class actions for a number of years. he is going to provide analysis on related issues with respect to class-action. please welcome adam kline.

[applause] >> the problem with going last is that everyone took the good joke so i'm left with the bad ones. one of the issues that you have heard as to what extent does the court consider the issues of rule 23 class certification and the question of abstract content versus the merits of the case versus what they effects of the decision are. so just to make the point that has been made before but i will make it again, this is a case involving low-wage workers, women who are the victims of discrimination. that is the theory of the case. the question is can they persecuted the case in an economically rational way? is the tale of two cities or perhaps the bush v. gore construct and not on the one hand you have the impossible result of any number of women who conceivably prosecute their individual cases and not be able to do one thing about the systemic albums they encountered at walmart. on the other hand you have this

gigantic potential exposure that the defense bar will complain about and say this is about lawyers trying to get money and it is lawyer driven. that is sort of the extreme descriptions of the same case. in that construct what is the supreme court do? what is the issue before the court? versus not on the merits. i think that is a very critical point. this is not a decision that will relate to the merits. so, whether the plaintiffs are right or wrong is irrelevant to the question that will be decided. what is at issue is whether the elements of rule 23 are satisfied and the particular whether there is a right to proceed under rule 23 v. to which was discussed. there the question is what are the kind it's actually seeking to obtain? with the plaintiffs would sell you and they know the lawyers very well what they would tell you if they are trying to change the company practices that are harming their clients. that is the primary objective of

the litigation. the fact that there is an economic value to that is secondary to the primary objective of changing the company so they can eradicate discriminatory practices with the company. that is the objective in the litigation. one of the examples or further points is they away the rights to compensatory damages so no one including the plaintiffs will be entitled to any compensatory damages. a note about punitive damages. what this comes down to is our punitive damages, our compensatory damages is the aggregate value of backpay superior to their interest in seeking injunctive relief? that is the discussion that will be healthy for the supreme court and what is interesting is that if the plaintiff says the court our objective is to eradicate discrimination within walmart. in fact that is the primary

objective. that objective can be satisfied. and just to make the point in the ninth circuit, the court certified the injunctive relief class. i don't mean to get too technical but the ninth circuit certified their primary objective in the litigation under rule 23 feet to. there was no couldn't transitory damage is. the right to proceed to obtain punitive damages was remanded to the court and the question then is can that be certified? how do you certified equitable and gentry relief but not certified the right for punitive damages? if you don't have certified punitive damages claim it is not worth anything. it would be worth some amount of money for an individual victim to come forward but on behalf of the class hydraulic drescher that is complained about doesn't exist. so what the ninth circuit did was they try to address the defendant primary argument

against certification that you have this exposure in punitive damages and to some extent on backpay damages. the ninth circuit said we can fix that. we can some please certify the class under b2 and we will put off the request for punitive damages to a different day and maybe you get that certified and maybe don't. not important at this stage of the case. the question i was asked to comment about was common issues and what the case is about in terms of supporting commonality, rule 23 that is an important concept. here you have a question the question of whether the practices that the plaintiffs articulate, subjectivity, the stereotyping, whether there is a link between those observed phenomenon and disparity of compensation and promotion. can you draw a line? is there enough of a nexus between stereotyping between the

decision-making and the observed disparities in terms of compensation and promotion? that is a question. accords call at bridging the gap bridging the gap in terms of the individual experiences of the plaintiff and those of women who came forward and in classification whether that information those experiences can be generalized as class certification under the commonality. that is the essential question in the case. when you put aside this other point about damages or effects of unitive damages and aggregation of the economic claim. so that is the issue that the court will really tackled at the argument and will be interesting to see how it plays out. one other point is this counterpoint to andrew, money driving the case. it is sort of a function of the size of the case in the and the size of the company. so again the tale of two cities.coming, you have individual class members who are

in relatively modest amounts of money. seven to 10 to $12 an hour. their individual claims have modest value. at the individual level it is a lot of money. that is simply the size of the company i don't think that in and of itself is going to be a fact this court will rely on were considered to be determinative. one other small.. in john three -- so the question is what happens if there is a finding of classification of liability? do individual class members get a check? perhaps. perhaps not. the reality each individual class members may or may not have, be entitled to an actual check to compensate them for potential claims of discrimination. again going back to the point the main point of the litigation is to eradicate just -- systemic

eradication. the secondary question is will any individual class member be entitled to a check at the end of the day? that is to be determined and not before the court right now. thank you. [applause] >> thank you very much. thank while the panels for an excellent presentation and also for staying on time which i want to also try to do. my role now is to ask questions of the panel. i think i will keep it to just two questions in and we will open it up to questions from yale. the first question i'm going to direct to marcia greenberger but everyone is free to chime in. this has to do with commonality. if you could say a little bit more about the common allegation of sex discrimination through the company and why that is appropriate for class treatment as opposed to doing individual

cases. what those allegations are. >> well, again, what is at issue in the walmart case is so important because the nature of the discrimination that is being complained of is something that is replicated in many companies across the country. what walmart is basically arguing is first of all that given the nature of this issue of commonality, there shouldn't be a class-action class-action and also i do want to get to your specific questions, but that is what is really going down to versus the second issue of well, should it need this b2 class that covers everybody or the b3 class where people can opt out? but the supreme court specifically's first question is a class-action aloud at all and

that does get to this commonality.. the nut of it basically is walmart's nationwide policy that manages -- managers all across the country can decide what they are going to pay their employees and how they are going to promote their employees based on their own discretion with virtually no real guidance, no kind of standards that would support nondiscriminatory and fair decision-making. it is contrasted in the walmart case to quite specific policies about temperature for example. managers are told they have to

keep the stores at a specific temperature. they are not told, find a comfortable temperature that seems to work for you and then set the thermometer in your store to fit what you think is right. but, when it comes to pay and promotion policy, even with you have to post the job openings, walmart says up to you. you do it how you want to do it. that nationwide conscious decision on walmart's part to leave such extraordinary discretion to its individual manager is what at the nub of the case is the policy being

complained of that affects the whole nationwide class of women. when that kind of discretion operates in a way that leads to fairness, employers can continue to follow that kind of policy. but as the experts say, that is not usually the case in today's society in today's world. and that is where all of the sworn these sworn declarations and the individual stories of the named plaintiffs become so critical. they are describing, in discriminatory practices all over the country of discounting why women are working to begin with, of discounting their commitment to the job, of assuming that they shouldn't be paid the same as men.

that they will not be as good managers as men, and being allowed to use those biases unchecked in a way that they make decisions, and that is the common policy that walmart has adopted to allow those kinds of biases to operate, and what plaintiffs are seeking, the opportunity to then establishing court as something that truly exists across the country affecting all of these women. so i do want to underscore, it is up to the plaintiffs to prove all this, but what is so critical is that they be allowed to shoulder that burden on behalf of all of the employees who are affected by this headquarters policy, that it is up to all the managers or all of

these employees to decide how they are going to make decisions on whatever grounds they choose. this morning, i happen to do a call-in radio show and a and the walmart case came up quite a bit in the context of women in the workplace now, the fact that still nationwide women are only earning about 77 cents on every dollar per men and the retail section of our country is in the 60-cent range, 64 cents i believe it is. so, and walmart, according to the evidence is actually even worse in its specifics than its largest competitors in the retail area itself. so, the common thread here is, is this kind of go do it your way coupled with the underlying

discrimination and stereotyping the plaintiffs have alleged, had demonstrated to some degree that would have to prove the common practice that has to change in walmart, and that is the nub of what is at issue and in a call-in show and number of males, managers at walmart called in. and i'm thinking of, are they going to say oh no it was fair? that is not what happened. they said that actually, it was and is as the case when maingot higher evaluations for the quality of their work even though they weren't getting the same pay and they weren't getting the same promotion rates and at least with respect to these male managers who were calling in, they were reaffirming the kind of, you know whatever your reasons if you see this is an old voice club and you want to promote

your pals, but that was okay and that they saw a lot of unfairness against very hard-working women at walmart. it is that discretion that is allowed when there is also as alleged by the plaintiff, so much stereotyping and discrimination that is the common practice that is at the heart of the case here. >> thank you. for providing us with the more background to the allegations. i want to ask more of -- one more question. i'm going to direct it to you and her and ask you a the question in terms of the class certification issues. and i think he presented a strong and argument for some of the difficulties in the case and but it also seems to me that those are arguments that apply to employment discrimination cases and generally as opposed to just the walmart case.

and so one of the issues that i think is present in this case is whether, if the supreme court holds the walmart case is not appropriate for class certification whether that would also mean that there cannot be any more employment discrimination class actions and with the possible rationale for that would be given that there is nothing in the rule that suggest they should be treated differently and is professor malveaux noted the class-action entity grew up around civil rights class-action, much like this one and so if you could just address that issue, whether about the ability to certify a class-action generally. >> sure and that is a great question in my first answer to it is i think the employment discrimination class-action will survive walmart regardless of what the court rules. here's the thing about class actions in general. they are a remarkable versatile device. they get used in environmental cases, and vicious cases,

employment discrimination cases, protect liability cases and that is all with the one rule 23 as i described it to a describe it to you up there so rule 23 can be modified to serve a lot of different subject areas and the law and here is the one really important thing professor salmi just brought up that is also really important. rule 23 was brought about really a lot of city roads out of a series of desegregation cases in the 60s and is professor malveaux described the 1960s its advisory committee which are basically the people helped draft the row were incredibly impressive how effective the class-action was at effecting desegregation overtime. it was a remarkably useful device particularly in injunctive relief. these court orders to force desegregation were involved. so it has a long and storied civil rights history and i don't think anyone on the court is unaware of that or wants to spit in the face of that history. i don't think that is part of the issue here at all. which really is at issue here is

the way the walmart class-action has been set up. if you allowed to be certify the way it is, is it an effective tool for an aggregate relief for the class members and that is the question in any given class-action. and i think the supreme court has before it the opportunity to clarify a few "and in a couple of different areas that but not in any way restore the employment discrimination class-action. would they be hard to bring that if they affirmed walmart versus dukes? of course. you are going to have a comparatively easy in the employment discrimination field and that is not necessarily a bad name. that is a policy question as to how easy you want to make it, but here's what happens i think if they wind up basically ruling in walmart's favor. first on this 23 b2 -- 23b2 issue the row question will become can you bring these large damage awards and call them backpay and certify them in the injunctive relief bucket? the supreme court says no to noted that doesn't mean that

walmart will be immune from class actions going forward. amita will likely face a lot more class actions in this b3 bucket where people are bringing bass action seeking monetary damages they will just have to prove the common issue predominates and they will also have to prove that the class-action is a superior way of bringing the case than any other way. there've been class-action certified under rule 23b2. it is not terribly hard to do. as far as the commonality question i don't think the supreme court will rule one way or the other that commonality is a specific bar to hold two. ..

>> now, you know, within that there's a number of different issues that probably arise, and the supreme court will be able to say, i think, that there isn't a common question among all of these women where if you broke it down into what are commonly referred to subclasses, smaller groups within a larger group, you could find uniting common issues. if you break it down like i did up there, there's 41 retail regions. let's assume the executive vice president in charge of each region, and they each have a vp, set a moll sigh, then there's a common question. was the policy that vice president set discriminatory?

that's a case you can still bring and an economically viable case to bring. what it comes down to is whether or not the supreme court will rule that you can have something this broad or rather a narrower class would have been appropriate. narrower classes don't mean class actions don't exist. they may be less probabilitible, but there's still economic incentive there to do it. the final issue we haven't talked about yet and i want to bring it up very briefly is that there's -- i'm sure you familiar with this in litigation in general, you know, there's no such thing as an independent expert in litigation. each side hires experts to make the point. we are talking about the experts on whatever side we happen to represent, you know, and, you know, what we pay them to say, and those experts tend to disagree in this case. we have statistical experts for the plaintiffs that say it's easy to show common effects in

this class. wal-mart has experts and they say something different. one of the things in front of the 9th circuit and likely to be an issue the supreme court has to decide is how much do you have to decide which expert is right before you certify a class in? do you have to stay at this stage when we dive into the methods, one side is reliable, one side doesn't seem to be, and that influences our decision. the reason the appellate courts are split, and that's been briefed in front of the supreme court is a fairly technical issue. it will be one the more important issues the tech decide. employment discrimination class actions will still exist. >> all right. thank you, anybody else? go ahead, susan. >> just a couple sort of comments in reaction. you mentioned this notion of back pay and that the plaintiffs here if you called them, you know, damages that somehow you

can scwee your way into the rule 23 # b3 class. i think there's a rule distinction between the monetary relief that you're seeking. there are compensatory damages and punitive damages. back pay is treated differently than damages. it's not as if you can conflate the terms and call back pay damages or there's some kind of ruse going on where the plaintiffs call back to pay damages. they are treated differently with a different history with the court's acceptance of them. it can be confusing rather than sort of clarifying for people the difference between those and why that difference matters. the other thing i would add about the b3 certification you mentioned that this was not that difficult to do. i was sort of begging to differ. i think getting a case certified under whether it's a rule 23 or b2 or b3 makes a big

difference. it is difficult. it is more difficult to get a case certified under this b3 bucket. that requires that you show that common questions dominate over individual ones. you have to show the class action is the most superior mechanism of resolving the dispute. it requires that you pay, you know, you have to put out individualized notice to class members. that can be extremely expensive, and that can bar plaintiff's counsel from being able, in fact, to bring the class action at all because that's can be a very absorb tonight cost. you mite not be able to pursue your claim as a class-action. i think it's cold con for fort in the notion if you don't get certified there's still the b3 bucket. those disadvantages can be so severe that you find people not able to bring civil rights cases at all. >> okay.

sorry, just as a follow-up, one thing not discussed is so what has the supreme court done in class action and employment discrimination cases? actually, the track work is good. there's two major decisions and both relate to desperate impact. the distinction here is critical. there's a claim and a claim that doesn't require evidence. i think what is critical here, and again, if i were -- so one of the questions that was presented to the panelist is can you predict what's going to happen? [laughter] so, here's the route of success to the plaintiffs. the routes of success, this is my thinking on it. if you look at their claims, they have desperate impact and desperate treatment claim. the desperate impact claim is there's a policy practice setting pain into motion for subjective decision making. there's some oversight, they

claim, that there's the selection criteria challenged, and the question becomes is there a prima facie violation? well, what's the evidence of that? statistically saying there's paying promotion. that's not terribly challenging. the court will not be concerned how persuasive the short falls are, just simply is there a prima facie violation in title vii by way of statistical short fall? if that's true, if the plaintiffs make out that claim, then they win on the merits. unless the deft shows the practice is job related and consistent with business netty. that is challenging for wal-mart. the business depends and the argument has to be our delegation of authority to individual managers in terms of setting paying promotions is appropriated, is a required business practice. well, we know that simply isn't true. it's just illogical, but putting

that aside, the merits aside, that all sounds like common issue of law of fact, doesn't it? if prototypical class action in the realm we've seen the supreme court approve in cases like louis of chicago which was 9-0 by the way, and then so the question is what happens to the case? well, what happens to the case is that you get the largely the same result. you get relief, a fights liability, a back pay award, no variant of compensatory damages. they already briefed it. no right to punitive damages, they didn't serve a claim, so they lose that. it's not there anyway. not terribly consequential. in my view, you know, the practice -- the secret hidden weapon is in that construct is to really focus on attacking the policies of practices under desperate impact theory and make the point that subjective decision making on pays

promotions is based on a neutral policy practice in the form of selection criteria challenged under title vii. i think that's a true statement. if that's true, that should be certifiable. >> well, thank you. just so andrew doesn't feel like the only contrarian up here. i'll say briefly, it's a mistake to treat this one not involving desperate impact. i think although it's present in the case, that is kind of a reduce i believe is a term used. this is a case about intentional discrimination. they intentionally discriminates, not by accident, which is what the desperate impact is. it might make sense to frame it, but they would run into trouble thereafter. i'm the monitor, so i get the last word on that. [laughter] let's open it up now for questions. with the questions, please identify yourself, and i understand that microphones will come to you as well. go ahead, here in the first row.

>> mark press associates news service. earlier panel this year mentioned that the one exception to the general view of the roberts court is that when it came to workers suing about discrimination, the court has come down on their side and the latest decision, third of three, was just tuesday. talk about that and the other case they decided tuesday which was certifying a class action case where a company lied in terms of what predictive effect those, if any, those two decisions could be on the wal-mart case. >> i think that i would probably narrow their record in having decided in favor of plaintiff's

in employment discrimination cases a bit more than you described. i think that where they have been willing to allow cases to go forward in particular is where retaliation is at stake, where someone has tried to vindicate their rights or get the antidiscrimination law enforced, and for the trying, they have been fired, they have been -- their pay is demoted or retaliated against in other ways. while retaliation can have some class impact, it is by and large a person-by-person manifestation of an employer's hostility to discrimination protections, and in that person-by-person context i think the court has been willing to recognize that the

very integrity of the civil rights laws would be undermind entirely if retaliation were allowed to go forward. i think that when we go much past that, we don't see as much of the concern for what is at risk and at stake even in an individual case, i think the lily case was a reflection of that where it was a paid discrimination case, and in that instance, it came up with a one woman in a class action, but the implications were very broad for people being able to bring pay discrimination cases over time. i want to go back to make two very quick points. first of all, that much of what

seems to take you aback when you hear about wal-mart, about how many women, how much money, how many regions is by how big wal-mart itself is. not because the legal issues raise the in the case are that different from employers of all different sizes, but just because they are magnified when you are as big as wal-mart is. one of the big concerns is if the supreme court lets wal-mart out of the class action responsibility, to be held accountable based on the claims, then are we in and now you're too big to be held accountable world, or are we in a situation where the principles that will be applied, wal-mart then get

applied and magnified to employers of all different stores of all different sizes? that is, i think, at the end of the day one of the greatest concerns with respect to wal-mart, and the second thing i want to say very quickly is as we're talking about the back pay, when you have so many women employed, even of their relatively small claims per woman, it adds up to a very staggering sum given wal-mart's size. as andrew said, we don't have to worry too much about wal-mart because it has an awfully deep pocket, and the amount at stake even though it's staggering to the likes of me is actually not very much money in the greater scheme of things for wal-mart.

the other major thing at issue in this case is will there ever be an incentive for employers to clean up their act before they are sued? to believe that they could be held responsible in a big lawsuit for the unequal pay that they had been benefiting from all these years because that is at the end of the day what pay discrimination means. if the plaintiffs can prove their case, wal-mart has been pocketing salary that they should have been paying to all these women all these years. should it simply be they should sit back and if a few women ever can get it together to sue them in some region, somewhere, in some store on some narrow issue

sometime, they'll pay up in the future then, but in the meantime, it's way more economically sensible to just keep saving that salary that if plaintiffs can prove should have been paid, that they really denied the women and the women's families all those years. >> i just like to hop in for one. i think ms. greenberger stated one part of the question very well. another case that involved a security's fraud class-action was not a certification decision. it was at the motion to dismiss stage. it was a slightly different set of rules, so there's not much of an effect going forward. >> thank you. yeah?

>> my question is addressed to adam. as she said, the merits are not for the supreme court in this case, but we know it's overclass certification, and this battle, in this case, has been going on for over ten years. if the court certify -- certifies the class in the way they are requesting, what happens now? does the company with a history of aggressive litigation like wal-mart send the next ten years fighting the merits, or does the fact it's just back wages and relief mean they hash out formulas to figure out the issues and look to settle the case relatively soon? >> that's an excellent question, hard to answer. you know, the history, if it's a guide at all, suggests they will continue to fight. this company feels strongly, for whatever reason, they have a

defense to the case and they're fighting a fight not just for their own benefit, but for other corporate employers as well. why think they to take that on i'm not sure, but i think that's an explanation from my vantage point any way, but my sense is that they have done a lot of efforts both strategically and tactically to undermind the case on the merits. it's interesting how litigation works out sometimes. the case that was certified was actually not the class presented by the plaintiff. they wanted to include former employees as part of the class and the promotion claims to be certified and they weren't. there are issues that the plaintiffs have already lost during litigation as well. the other reality is that there is such a substantial amount of money at stake that my sense is

that they will be concerned about that exposure and will think to continue to fight as a negotiating tactic as well. >> well, let's see here -- [inaudible] >> heidi hartman, research policy institute. i am a labor economist, so now i'm confused between what andrew and adam said, but in the presentation, andrew, you were implying the class is 1.6 million and half of them no longer work at wal-mart, and therefore they're only in it for the money. i took that as a delegitimizing comment because the class is just a bunch of grubby women in it for the money. the people who are past employees who are no longer at wal-mart, given how big an employer like wal-mart is and where they are located which is

often in rural areas where there's a monopoly position by driving out the smaller retail businesses, given that women who are low paid and in retail tend to have high turnover right and wal-mart is the big employer, they have already over the course of 15 years worked at wal-mart many times, so they are likely to be interested in the relief because should they work at wal-mart again, which most of them have already done, they want promotion and they want good policies there, so i wouldn't dismiss the half of the case that supposedly has no interest in the injunktive relief. given where they are located, they have an interest in that relief. >> just to answer that very briefly, this is a typical abstractionism problem that quotes engaged sometime where they want to consider the hyperthettic interest of the employee.

well, they can't interview the person or the group or whoever, and they have to guess what their interests are, and i think, you know, how you just said is exactly right that they have a continuing interest to see it's rad kateed within wal-mart and corporate america. that's the social policy point to be made and not abstract view of what a hypothetical absent class member would think. >> go ahead. >> i'm sorry. >> go ahead. we're just running -- >> two brief points because it was addressed primarily to me. [laughter] the first of which is -- [laughter] i apologize if it sounded delegitimizing. it was not the intent to say grubby women are in it for nickels and dimes. one is more money relief, and that includes back pay called compensatory damages and given these women don't have standing currently to seek relief, the

only relief available to them in this case right now is the monetary relief, and at that point, when half of your class rial is only in -- really is only in this particular case because the monetary relief, that predicts which way it depose whether it's primarily injunction or monetary. i think any human being wants corporations not to be discriminatory would be having an interest in the injunction relief, but in this case, those are only the current employees of wal-mart. >> that's off the function off the passage of time. >> it is. >> in the second row here, go ahead. >> thank you. nbc news, professor, can i ask you, you talked a little bit about how the court will look at fairness to the class members, adequate notice, have a chance to opt out. does the court look at the certification stage of fairness to the defendant whether it's impossible to defend against a class that gets too big?

>> absolutely. i mean, the court is going to look at fairness to everybody including the defendant, and i think one of the things when we talk about class actions sometimes we talk about this is seems like it's only to the benefit of the plaintiffs which is actually not true. it's really to the benefit of kind of many times the defendant. they may initially sort of push back as class certification stage, but ultimately if you have a class action, it works well for the plaintiffs because and the entire system. the plaintiffs are strength in numbers, and so they work collectively bringing claims if they have small claims, not a lot of resources, they can come together, but it's awful good for the civil justice system because you don't have the inefficiency of one case after the next case after the next. all these individual cases that share a common bond. they are all challenging the same alleged discriminatory policy. they all have the same collective goal. it makes sense to the judges

that are totally swamped, the federal judges in terms of their docket, and the parties not to litigate each individual case over and over again, but, in fact, to do this as one collective action, we resolve this once and for all to the extents we have these things in common. now, that's also good for the defendants. the defendant may choose to settle a class action or make it litigated, but often it will settle, and that's because they can within one case resolve all of these issues that are in common, so it's actually to the benefit of the defendant often to have this resolved as a class-action so they are not stacked with each individual 1.5 million women, you know, bringing up the same issue over and over again. so it's definitely, i think it's helpful actually to all the parties to keep the class-action mechanism alive and well, and i do think the court looks at, you know, is this fair to the

defendant? there are many -- i mean, there's components of the rules looking for the class members and also the defendant. that's why it's a difficult standard to meet and you have to meet all the criteria of rule 23a and one of rule 23b. the issue is let's not make it so hard that we now shut down the ability for people to collectively have their civil rights enforced and move forward. >> if i might just add another quick point that i think we haven't actually underscored so far is that much of this balancing and the weighing of the experts and whether at the end of the day there was a credible enough case made by the plaintiffs about the commonality of the issues in such a big employer was made by the district court, and district

courts are assigned to find the facts, and yet there is a question about what is the legal principle that ultimately those supreme court will decide? one concern is that the supreme court, it's not the role of the supreme court to be deciding at the district court already looked at the experts and already looked at wal-mart's experts and the plaintiffs' experts and chose to credit the plaintiffs' experts in this case about the common practices and the effect commonality that those factual findings were taken and given respect by the court of appeals and are supposed to form the underpinning for the supreme court as well, so the balancing of that how unfair this might be to the defendant versus how fair this might be to the plaintiffs, how much are these issues

ultimately common issues versus very discreet differences that are unrelated region to region, manager to manager, those are the kinds of things that we actually have a quite extensive factual record on, and that is a record that is supposed to be the basis upon which the ultimate applicability of those legal principles will apply, so the supreme court is not supposed to be trying to figure out the facts as if the district court hadn't already through a very extensive proceeding decided them having heard them, listened to the experts, and evaluated in a way and weighed them. >> if i might add my half cent on the question raised because it's an important one lost in the case. wal-mart makes it sound like they want to defend the cases individually, but they do not

prefer 500,000 individual cases to a class-action. there's been a lot of emphasis on the briefs on how class-actions settle. that's true, but most cases settle, but the other case not told is when class-actions are desert mid, they don't turn into individual cases, they go away. and that's what wal-mart is hoping for in that. >> hi, with acs. adam brought this up, and i'm not sure how relevant it is to the case by the supreme court, but -- and this relatings to what heidi said about the turnover at wal-mart. i think andrew said something about how the class itself is made up of current employees and former employees. i guess i suspect that composition of the class changed a lot and certainly to wal-mart's benefit to stretch the case out as long as it can so there's more and more in the former class. how relevant is that to the

discussion? will the court look at that? anyway, it seems to me to be an important point not brought up entirely, and i'm wondering if you could expand on it a little bit? >> yeah. i'm happy to. this is an interesting question. the courts, the circuit courts struggle on what is the essential interest in the case and what are they trying to achieve? oftentimes, the focus rather is what the plaintiffs actually say in their complaint which is to obtain equitable subjective relief. the second circuit, ninth circuit had the same con september. what is the main thrust of the case? when you have a very substantial number of former employees comprised of a class, that interests the roads, that argument is undermind. let's say there's a class of

former employees, to argue that the main octoberive is to fix practices that caused discrime in this case, that's a plausible argument. you know, i 2k30 back to the early -- i go back to the earlier appointment, a lot of what wal-mart has done is strategical in defending the litigation. that's one example they are argue now more forcefully the percentage of former employees has risen to a point where the primary objective is to e eradicate discrimination and ob sin liquidity and undermind. that's a talking point they can make. >> one other very, very quick point about that, and that is it's always an ax that the ultimate strategy is to string the case out as long as possible to make sure the plaintiffs run out of time, money, interest,

run out of connection to the ultimate matter, and the point of a class action is to be sure that when the plaintiffs are appropriately raising an issue that effects the broad class, that those class interests are actually taken into account and protected, so there may be a shift because of the passage of 10 years whereas when it started, the original plaintiffs were all at wal-mart, and over time, fewer and fewer of them are, but the class is ultimately going to be protected by those who remain, and that's why i want to go back to the injunktive relief and so important going forward and go back again to lily.

she brought the case on her own at the end of her employment history, and when she ultimately lost, she got nothing. had that been a class-action, maybe not only would she have gotten some of the back pay she was entitled to, but other women at goodyear whose interests were -- she was never certified to represent -- would have had their discrimination remedied too, and in her instance, the jury was so taken aback by the extremity of the discrimination that she described and that they found existed that they actually did impose punitive damages against goodyear. a class representative is certainly doing it on behalf of their own interests for sure, but the whole point of the

class-action is to protect the members of the class and those going forward who will be at wal-mart, and when you balance out the back pay, an issue in this case, as compared to what the ultimate value is for all those women going forward into the future at wal-mart, the class-action in future interests dwarfs the amount of back pay that's at issue in wal-mart right now even though it seems like such a big number to us. >> i think we have time for one more question. >> i'm plaintiff's attorney -- tried to certify a class action in the third circuit and it became multiplaintiff instead, but my question is obviously for any institutional change, this is the ideal mechanism because

for discovery purposes you get overbroad protections, and i'm wondering if there's a survey on how many motions to compel because the individual credibility battle happens within any one particular person never, ever allows you to get the evidence sufficient to form the argument to do the analysis to create the institutional progress, so if you're talking about, you know, addressing an institutional reform in, you know, corporate wide, obviously, the ideal mechanism, and you have to preserve it. my question is do you have an ability to have the various class members into different types of class sizes depending on whether they are suitable at this stage? can they preserve one side where the current employees for example over, you know, the people who don't work anymore there perhaps? not that you can see that

argument, but is that an option? >> on the supreme court, they can do almost anything. [laughter] rule 23 does not prohibit an appellate court to redirect a class. they do it all the time under rule 23f, but there's nothing prohibiting the supreme court saying as defined problem as this is and carve off of this bit and redefine this, there's a class that's certifiable, but we can send it down with certain instructions, i think that's well within the supreme court's power to do. adam may have a different take. >> no, i agree with that. it's the game of life. everybody winds up with a retirement slot. there's a lot of ways to get there, but certainly any number of manageability options and c4 which the ninth circuit did, but

not explicitly, but there's plenty of tools. remember too that rule 23 is a management tool to permit the court to efficiently hear a case. that's the construct. it isn't to give an advantage to one side or the other. there are plenty of management tools built into rule 23 and more broadly of course are allowed to, you know, hear cases and manage cases in a way they see fit. there are plenty of solutions to the problems that are presented in this case. >> and i think that goes to the question that's going to be before the court if terms of which test do they ultimately decide to use in figuring out the monetary damages predominate over the rest of the case or the declare declaratory relief that's it's important to keep the discretion, give the courts discretion to make the decisions that there are tons of options available and a number of courts have sort of crafted class-actions in different ways only because they have the

discretion to do so, and so you have to be careful some of the courts of appeals depending on the approach they used, how they decide to define predominance, some of them are more marrow than others, and if it's a narrow bright-lined test, it cuts off the ability for judges to exercise discretion and make sure they can, in fact, be responsive to each case that comes before it, so that's going to be an important thing to watch out for in this case. >> i do want to go back to a comment suzanne, that you made, that b2 classes were designed for civil right statutes very much in mind to deal with the broad, ultimately recognizable class nature of discrimination, and in the idea of courts can fashion a lot of things in order to make them practicable, the point of a class action in a civil rights case in particular and using the b2 class in

specific was to facilitate dealing with that sees timic -- systematic change. that's what was in mind and what rule 23b major purposes was to begin with. in deciding this case, it's not as if the supreme court is without obligation to look at what the intent was of rule 23b and rule 23b2 in particular and rule 23a because wal-mart said there shouldn't be able to be any class-action at al here, let's not forget, but in a civil rights case in particular when we are dealing with the nature of discrimination, if somebody is discriminated against on the basis of race or sex, for example, that's a characteristic that can go more, you know, broadly than just they

themselves obviously. it's all the more important to think about why the framers of b2 and its intersection with title vii would intend that this commonality and systemic approach was the point of the law being constructed in the way it was, and i think that is ultimately part of what makes this case so important whether that intent and purpose of the law is going to be realized by the supreme court and respected by the supreme court in its decision. >> with that, we will know soon enough. the case will be argued on tuesday. if you're planning to go and want to get there early, and i understand the weather for sleeping outside is going to be pretty good. [laughter] it's going to be a very -- this is incredibly important, and as you can tell, a very difficult case. there's a lot of routes the supreme court might take in that, but hopefully the panel today gave you more insight to

the complexities and importance of the case. i want to thank you for coming and the panelists as well. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> up next on c-span2, former

economy layian president talks about gender equalitity. then a look at how blogs are covering the u.s. court of appeals and other courts. later, a conversation on capitalism, politics, and the u.s. economy with economist brian wesbury. today, nato agreed to enforce the no fly zone over libya.

>> the united nations launched a new program for gender equality around the world. the former president of khile

started the organization. it was hosted at hunter college in new york. [inaudible conversations] [inaudible conversations] >> good evening, and welcome to this exciting and historic event. i'm jennifer labb, the president of this extraordinary institution, hunter college. it's an hoer nor have to -- honor to have the former president of khile to be here to strengthen the rights of women and girls around the globe of the i have a quick story of when we had bill clinton here a few months ago, and i was able to introduce him, and he said thank you, madam president, i still like the sound of that. [laughter] it is particularly fitting to have the undersecretary general

speak here at roosevelt house where elanor roosevelt had a career in women's rights. you may have read "new york times" piece when the president asked her to lead a status of women she accepted saying men have to be reminded that women exist. this past tells a story of strong women existing and striving side by side. fdr's mother, sarah, imagined a beautiful home for newlyweds, so in 1908, she built this house and loved it so much she kept half of it for herself. [laughter] talk about your new deal. now, technically, one side belongs to the newlyweds and the other half to sarah, but as you can guess from the single entrance you came in and with the convenient connection, sarah was not too fussy about the distinction. she said you were never sure when she would appear, day or

night. [laughter] you thought you had mother-in-law issues. [laughter] the unconventional arrangement was also an opportunity. sarah's handling of domestic manners gave her freedom. she would walk uptown to spend time with the hunter students we expect that that inspired her to become the advocate for women's rights. this was still a progressive idea and the all female hunt every college was filled with ambitious women. a long and rich relationship developed between the roosevelts and the hunter community and lasted even after they left 56th street for the white house. after sara dayed in 1941, they arranged for hunter to purchase this house for $50,000, still a great deal. franklin himself donated the first $1,000.

she was an active friend of hunters until her death. the house is a popular activity center. when i became president in 2001, i was dismayed to see the house closed and in need of repair. we wanted it restored and thrilled to have that dreesm -- dream be a reality. the house is rich in american history. this is where fdr came to recover in 1921 because there was an elevator which was unusual in those days. he turned from the builtmoor hotel. in 1962 broadcasting from the radio, he introduced the nation to its economic recovery plan, and this is where elenor led meetings on issues and set out to change the role of women in politics. women, she said, were of little importance. they stood outside the door of

all important meetings and waited. while she got women inside the door, she convinced fdr to ask francis perkins to be the first women cabinet member in history. she accepted in the library upstairs after franklin agreed to let her create a program called social security. the room you sit in now is one the few changes we made and we're talking is a bureaucracy in the u.n., well, imagine trying a new york city to turn the backyard, which was all dirt here, into this beautiful room, so you can't get a backhoe in the backyard, so this was shoveled by hand. it took time and permittings, but here we are. we reopened the house as the new public policy institute supporting faculty research and first and foremost serves as an inspiring center of student learning. we are so pleased michelle

bachelet is here to help celebrate the launch of women. ban ki-moon spoke proudly of women in last november. your presence today is further testament to the strong links between the u.n. and the roosevelts. the changing scene after world war i led to global relations. fdr foresaw the need for an international organization to preserve world peace. in 1923, in this house, fdr crafted a plan for a society of nations to help prevent future wars. shortly after parole harbor, he coined the term united neighs and sold it to winston churchill by charging in on him during his bath. he convinced the allies and

american people that this new organization was essential to maintaining peace in the future. though he died before the charter ratified rntion the organization continues to bear the stamp of his vision. it was his wife who turned that vision into a reality becoming a lifelong champion of the u.n. and serving to the general asemibly and on the bronx campus of hunter college, she drafted the declare ration of human rights. she embodies the body of frank and and elenor. they would be so proud to have this woman speak in their home about what are today's most vital issues. under secretary bachelet said nothing would prevent her success, even torture, imprisonment, and exhyl could not keep her from earning a medical degree and becoming a pediatrician.

as her interest in politics grew, dr. bachelet expanded studies and was a renowned expert in military strategy. she was minister of health and then defense before making history in 2006 when she was elected the first woman president of chile, and we believe the first woman president in latin america to get there on her own and not their marriage or otherwise. she was the most popular president and a role model for women everywhere. one the young women inspired to cast a vote from michelle bachelet is here today. she is studying political science and art history and earning a certificate of human rights here at roosevelt house. she interned at the mission of the un and hopes to follow in president bachelet's footstep as a leader in international poll

sicks and gender equality. it's a pleasure to sphwro deuce her. i'd like to recognize another special hunter student from a generation that paveed the way for today. phyllis loved hunter so much, she wanted her grandson named joshua hunter making it no surprise he graduated from hunter college this january. truly one of the most alum nee and friends. please stand as we thank you for the gift of this lecture and everything you do for hunter. [applause] it is a great honor for me to invite michelle bachelet to the podium, how proud we are to be joined in a conversation after her talk by one of hunter's

own. he is a lead author to the report of the u.n. security counsel instrumental in the creation of u.n. women. thank you for your important work. following their discussion professor jenkins will lead a question and answer session. please help me welcome a true national hero, undersecretary michelle bachelet. [applause] [applause] >> thank you, president raf -- rabb for such a warm welcome and remarks. it is a real honor to having been invited by hunter college to deliver this lecture for 2011 at the roosevelt house. it is a particular pleasure to address you here in the home of one of the 20th century great

obtainers of human rights and the leaders of human rights as was mentioned. let me especially focus today on elenor roosevelt's work because her work built a foundation of international human rights law grounded in the equality regardless of race, creed, or sex. i am going to address particularly one issue and maybe in the questions you can ask me about anything you want. women, war, and peace, that's the subject of my address this evening because it was so, in fact, the topic in which elenor roosevelt had strong convictions. during the first u.n. assembly in 1946, she insisted passionately that women should seek and be granted the opportunity to, and i will

quote, "share in the work of peace and reconstruction as they did in war and resistance." as you may guess, it was not taken up, but would take half a century for the counsel to translit her insight to into national law because in 2000, the security counsel unanimously passed resolution 1325, and this landmark decision recognized first that women's experience of war was different from men's, and second, that a nation of women were an untapped resource for building peace. resolution 1325 calls on all actors, national and international, to fully involve women in recovering from conflict and to ensure that all peace building efforts are

consistent with principles of gender equality. resolution 1325 thus aticklated in the -- articulated in the security field still, just two months old, two empower women and promote genter equality. this is refleblghted in our -- reflected in our official name that is long to remember, but i will remind you. it's called un women, but it's un -- united nations entity for gender equality and empowerment of women. it's real long, isn't it? it's reflective in u.n. women, and u.n. women as leader, i'm committed to reflected efforts of women's empowerment in transitions from war to peace. u.n. women will seek to influence decision making at the highest level of u.n. policymaking through an

organization whose sole mandate is to have women's realization of human rights and work with governments to make public institution more accessible, responsible, and accountable to women. we will work -- support women's economic engagement through initiatives that address formal and informal barriers to expand market access and market law consistent with international obligations relating to women's rights, and every day we see how important it is. i suppose that all of you heard, as we have today, that six women were shot dead peacefully demonstrating for democracy, and in every part of the world, we need to address or defend women's rights and nowhere more

than in conflict and crisis. ladies and gentlemen, tonight i would like to share with you how u.n. women will play this role working to the with all our peace building partners, national and international, public and private, women and men. my instinct is to look forward, but before doing so, we must see where we stand, and we must ask ourselves more than a decade last year we celebrated ten years of the 1325 resolution, so that i can say that more than a decade after the resolution 1325's passage. how has it called for women's engagement in the work of peace been answered? let me say that international communities response has been at best mixed. on one hand the part of the resolution that addressed women as victim of conflicts, particularly as victims of systematic and widespread sexual

violence has in recent years been collaborated. beginning in mid-2008, resolution 1820, 88 and 1960, broke new ground by first affirming that there can be no inpiewnty for those who command, condone, or commit such crimes, and second that international community to prevent and respond to sexual violence perpetrated during and after conflict. the u.n. began the long journey from exclusive focus on humanitarian action, women needs as victims, to a protective response. this means recognizing the need for customized security measures to prevent mass atrocity crimes against women, and on this agenda accelerated following the