>> paula pareto, workplace fairness. my question is addressed to adam. as you said the mayors are not before the supreme court in this case, but we all know the battle is typically over class certification and the battle in this case have been going on for over 10 years. if the court certifies the class

in a way that the plaintiff are requesting, what happens now? is a company with a history of aggressive litigation like wal-mart spent the next 10 years fighting the merits? or does the fact it is just back wages and injunctive relief mean they start hashing out formulas to figure out all of these issues and look to settle the case relatively soon? >> it's an excellent question. it's hard to answer. the history if it's a guide at all suggest they will continue to fight. i think the company for whatever reason feel strongly they have a defense of the case, they are basically fighting a fight not just for their own benefit over other corporate employers as well. why they think to take that on i'm not sure but i think that an explanation from my vantage point anyway, not that are privy to any inside information but my sense is that they have done a lot, taken a lot of efforts both

strategically ends tactically to undermine this case. it's interesting to litigation works out sometimes. the case that was certified was not the class that was presented by the plaintiff. they wanted to include former employees as part of the class. there are issues that the plaintiffs have already lost during litigation. and the other reality is there such a substantial amount of money at stake that my sense is that they will be very concerned about the disclosure. will they continue to fight as negotiators as well. >> i'm heidi hartman, institute for policy's women's.

i am a labor economist so now i'm a little confused about what andrew and adam said. in your presentation andrew you're implying that the class is 1.8 million, or 1.6 million, and half of them no longer work at wal-mart. and, therefore, their only in it for the money. i took that to be a somewhat delegitimizing type of comment, therefore this class is kind of a bunch of grumpy women in it for the money. i would like to suggest that people who are past employees, no longer at wal-mart, given how big an employer wal-mart is, and where they're located which is often rural areas, would have a monopoly position, they have already driven out all the small retail businesses, given that women who are low-paid and in retail tenant of high turnover rates and given that wal-mart is the biggest employer, they are very likely have over the course of 10 or 15 years worked at wal-mart many times. so they are likely to be

interested in the injunctive relief because should the work at wal-mart again, which most of them probably have already done, you know, they want promotion and they want the policies there. so i wouldn't dismiss the half of the case that is supposedly has no interest in the injunctive relief. given where wal-mart is located, they very much of interest in that. >> just to answer that very briefly, this is a typical sort of abstraction is a problem the courts engage sometimes with the want to consider the hypothetical interest of hypothetical former wal-mart employee. well, they can interview the person or the group, whoever. so they have to kind of guess what their interests are. and i think what heidi just said is exactly right, that they do have a continuing interest in that. and within corporate america. i think that sort of social policy point that has to be made and not the abstract you avoid

hypothetical absent class member would think. >> go ahead, sorry. we're just running -- >> two very brief points. >> the first of which is -- [laughter] >> i apologize if this had delegitimizing. my point was simply we got to bucket for class actions and one for injunctive relief and one is for money really. that often includes backpay. given that these women don't have standing currently, to seek injunctive relief, the only relief available to them in this case right now is the monetary relief. at that point when half of your class is really only in this particular case because of the monetary relief, that's going to affect which way i think predominate analysis goes whether its primary injunctive or primary monetary.

i would think that any human being who wants corporations not to be discriminatory would have an interest in the injunctive relief. but the law recognizes the ones, in this case those were the current employees of wal-mart. >> the passage of time. that's also the function of it. >> it is. >> professor, you talked about how the court will look at fairness to the class members, due to get adequate notice, did have a chance to opt out. does accord also look at certification stage of fairness to the defendant about whether it's just impossible to defend against a class that gets too big? >> absolutely. i mean, the court will look at fairness to anybody including the defendant. i think one of the things we talk about class actions, sometimes we talk about this seems like a toy to the benefit of the plant which is not true. if you want to the benefit of kind of many times the defendant.

they may initially sort of push back at class certification stage, but ultimately if you're a class-action it works well for the plaintiffs because come and the entire system, the plaintiffs our strength in numbers. they were collectively. they are able to bring claims if they have small claims or they don't have a lot of resources, they can come together. but it's also good for the justice system because night of heavy inefficiency of one case after the next case after the next case that all these individual cases that really share a common bond. they are all challenging the same alleged discriminatory policy. they all have the same collective goal. it makes sense to 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 extent we have these things are. that's also good for the defendant. the defendant may choose to

settle a class action or may get litigated more often if people settle. 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 that they are not stuck with each of these individual 1.5 million women bringing at the same issue over and over again. so it's definitely, i think it's helpful to all the parties to keep the class-action mechanism alive and well. and i do think the court looks at, is this fair to the defendant. there are lots of components to the rules they're looking out not underclassman was but for the defendant. that's why it's a difficult standard to me. that's what you have to beat all other criteria, and one of them, i think the issue here is let's not make it so hard that we now

shut down the ability for people to collectively have their civil rights in force and move forward. >> finally i might add one 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 a sign to find the facts. and yes, there is a question about what's the legal principle that ultimately the supreme court will decide. but one concern is that the supreme court, it's not the role of the supreme court to be

deciding after 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 actresses and the affect commonality. that those comments actualities 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 fear this might be to the point of, how much are these issues ultimately common issues versus very discreet differences which are unrelated, region to region, manager to manager, those are the kinds of things that we actually have 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 court hadn't already, three very extensive proceeding, decided them having heard them, listen to the experts, and evaluated and weighed them. >> if i might just add my have said on the question you raise because i think it's an important one that's gotten lost a bid in the case. wal-mart often makes it sound like they want to get all these cases individually but they do not prefer 500,000 individual cases. there's also been emphasis in the briefs on how class action is so. that's true although most cases are not. the other part that has not been told is that when class actions are decertified they don't turn into individual cases. they go away. that's what wal-mart is open

for. >> adam for brought this up and i'm not sure how relevant this is, but the choice to heidi had to say about the turnover at wal-mart. i think try to have said something about the way to class itself is made up of current employees and past employers, former employees. i would suspect the composition of the classes change a lot and change a lot and it is surely to wal-mart sprinted to stretch this case out as long as it can so there are more and more informal class and the issues of common our become harder to make it a morning irrelevant that discussion with the court look at that? anyway come it seems to me to be an important point that has been brought out entirely, and i'm wondering if you could expand on that a little bit? >> yeah, i'm happy to. this is an interesting question. the circuit courts have struggled with, what is the

central interest in the case. what is it the players are trying to achieve? oftentimes in the second ninth circuit the focus is rather plaintiffs actually said in a complaint which is to primarily obtain equitable and injunctive relief so the object of interest of the plaintiffs in the second circuit, the ninth circuit came in with a slightly different, the same basic concept. when you have a very substantial number of former employees comprised a class, that interest the road. that argument is undermined. let's hypothetically say, that's entire case. for them to argue the main objective is to eradicate the policies and practices that cause discrimination. i think that is still a plausible argument. you can understand that it would be undermined. i go back to your earlier point. a lot of what wal-mart has done is both strategic and tactical in defending this case in litigation, that's one example

where they can out argue more forceful that the percentage of former employees has risen to a point where plaintiffs a statement that the primary objective of the litigation is to eradicate discrimination, and it becomes understand -- it becomes -- >> is one very quick point about that, and that is it's always, it's an axiom that the ultimate strategy of the defendant is to just string the case out as long as possible hoping the plaintiffs will run out of money, one at a time, run out of interest, rhinitis 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 affects 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. where as when it started the original plaintiffs were all at wal-mart, and overtime fewer and fewer of them are. but the class is ultimately going to be protected by those who remain. and that's where i want to go back to the injunctive relief and being so important going forward. and go back again to lilly ledbetter your she brought the case on her own new the very end of her employment history. and when she ultimately lost, she got nothing. had that many class-action, maybe -- not only would she have gotten some of the back bay that she was entitled to, but other women at goodyear whose interests were -- she was never

certified to represent, would have had their discrimination remedy, also. and in her instance, the jury was so taken aback by the extremity of the discrimination, that she described in that they found existed, that they actually did impose punitive damages against goodyear. so, 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 backpay, 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 the future interest dwarfs the amount of back bay that is at issue in wal-mart right now even though it seemed like such a big number to ask. >> i think we're time for one more question. >> i am cynthia boehler. i made plain his attorney. i try to certified a class-action that went to the third circuit. my question is, obviously for any institutional change this is the ideal mechanism because for discovery purposes you get my with all kind of overwrought objections and i'm wondering if anybody has ever done sort of a survey about how many motions to compel, because the individual credibility battle that happens in any one particular person never, ever even allows you to gather the evidence to form the argument to do the statistical

analysis to create the institutional progress. so if you're talking about addressing and institutional reform, corporate wide, is the ideal mechanism. you have to preserve it. my question is, do you have an ability to bifurcate the various class members into different types of class sizes depending on whether they are more suitable to do chores are at this stage? can the supreme court bifurcate and preserve one side, the current employees for example, where the institutional issues do predominate over the people who don't work there anymore perhaps? i'm just one is a bifurcation is an option. >> it's a supreme court, they can do almost anything. [laughter] >> but rule 23 does not prohibit an appellate court from redefining a classy more certifiable class. appellate courts do it all the time and there are appeals. there's nothing i think that

would prohibit the supreme court if of saints you know, as defined, this is a problem but if we carve out this every defined as slightly you have a class that is certifiable. or to just decertify this particular class but said that with certain instructions. i think that's what within the spring courts power to do. adam may have a different -- >> no, i agree with it. it reminds me of the game of life. everyone winds up in every time slot. there's lots of them pass to get there but there's certainly any number of manageability options including issues class under secor which the ninth circuit did but it did lay out specifically. there are plenty of tools. remember that rule 23 is a management tool to permit the court lee fisher link here? that's the construct. it isn't even an affinity to one side or another. there are plenty of management tools that are built into rule 23 and more broadly, courts are

allowed to hear cases and manage cases in the way they see fit. there are plenty of solutions to the problems that are presented. >> i think that goes to the question is going to be before the court in terms of which tested the ultimate decide to use when they are figure out the monetary damages predominate over the rest of the case, or the injunctive declaratory relief that it's important to keep that discretion that gives courts discretion to to make those decisions, that there are tons of options available and a number of courts have sort of crafted class-action in different ways. only because they have the discretion to do so. so you have to be careful, some of the court of appeal depending on the approach that they have used, how they decide to define predominance, some of them are more narrow than others. if they do with a narrow bright line test than it really cuts on the ability for judges to exercise discretion and make sure that they in fact can be

responded 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 about the fact that these classes were designed for civil rights statutes, very much in mind, to deal with the broad ultimately recognizable class nature of discrimination. and any idea of courts can fashion a lot of things in order to make impractical, the point of a class-action in a civil rights case in particular, and using the b2 class specific, was to facilitate dealing with that systemic change. that is what title vii framers and congress had in mind, and that is what the rule 23 b., one of its major purposes was to begin with. so in deciding this case, it's

not as if the supreme court is without obligation to look at what the intent was. of rule 23 b. and rule 23 b. two in particular and rule 23 a. because wal-mart says they should be able to any class action at all. let's not forget. but in a civil rights case in particular, when we're dealing with the nature of discrimination, if someone is being discriminated against on the basis of race or for example, that's a characteristic that can go more broadly than just they themselves obviously. it's all the more important to think about why the framers of 20 b2 and its intersection with title vii would intend that this commonality and systemic approach of the point of why the law was structured the way it was. and that i think is ultimately

part of what makes this case so important, whether that intent and purpose of the law will be realized by the supreme court and respected by the supreme court in its decision. >> and that we will know soon enough, the case will be argued on tuesday if you are planning to get there early. i understand the weather for slipping outside will be pretty good. [laughter] >> this will be a very -- this is very important and difficult case. there's a lot of different routes the supreme court might take in net, but hopefully the panel today has provided you with more insight to all the complexities and the importance of the case. i want to thank you all for coming, and thank the panelists as well. [applause] [applause]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

we are very strong in terms of oil. we support with the oil. and also it's an islamic country where islam is a homeland of this one. >> watch this summer from new york city tonight at 8 p.m. eastern on c-span. former housing secretary henry cisneros spoke at homeownership conference yesterday. his remarks are next on c-span2.

>> now former hud secretary henry cisneros talks about the u.s. housing market and the clinton administration efforts to increase homeownership to 66%. his remarks at a conference hosted by "the atlantic" council and the "national journal" our 35 minutes. >> all right. we hope we have saved the besthy for less.mer henry cisneros, former mayor ofn san antonio, former secretary or

housing and urban development under president clinton. former president and ceo ofivist univision. and today chairman of cityview d companies which work withcrosshe developers to build affordable housing across the country.on mt as dean acheson might have said n of the really two administration long push to expand home ownership, and to really kind of force this into debate as not only an economic, but a social goal. what was the thinking at the beginning of this effort? what were the benefits that you saw from increasing home ownership rates? and then we'll talk about the lessons you take from this experience. >> ron, thank you for the question because i think it gives me an opportunity to really kind of frame the moment where some of this began. before i do that, let me just thank the national journal and the atlantic company for this effort. i have participated in a session last night and was present all this morning, and it struck me that this is the first of many,

many, many postmortems on the economic issues and the housing issues that really focuses seriously and hones in on the efficacy of home ownership. because it's right at the heart of what we need to decide for the future. what do we really believe as a country about home ownership? so this is a very important conference, and thank you for your role in moderating as much of it as you have. i remember the moment in 1994 when the head of fha and who now runs the harvard joint center for housing studies came in and said we're looking at economic data that suggests a very strong and potential long expansion. and the opportunity to harness that expansion and make it work for average families through home ownership exists. in retrospect, we know that that

expansion was the longest expansion in american history, that it produced levels of employment, reduced unemployment, resulted in the formation of new businesses, reduced poverty to the lowest numbers that had been on record since poverty statistics were kept through that period. and i remember a moment later in the rose garden talking to president clinton the morning that some new numbers came out on a very obscure statistic which is the distribution of income, and we actually had moved the distribution of income in a positive way. >> you had a good coefficient? >> exactly. you know the ratio. >> yeah. >> but the long and short was that the argument was being made that one way to have the benefits of this reach people -- aside from jobs and incomes -- was to create the conditions in which home ownership might be expanded.

the previous high in home ownership had been 66%, and that was achieved in the about 1966. at that -- in the early '90s we were about 64% or so. >> when you came in, right. >> when we came in. and can we didn't do a -- and we didn't do a lot. but what we did do, for example, was we pulled together a coalition of 45 organizations, a home ownership coalition that included the community bankers, the american bankers' association, the mortgage banisters' -- bankers' association, many, many other advocates like shanna's group, for example, on fair housing, many groups, and said tell us what needs to be done and what we can do to advance the home ownership rate. the goal was, basically, to create opportunity, and the thought was that we might get to the 66% which had been the all-time high. but at that time there was no thought that we would, you know, move into is stratospheric levels that we saw later.

and, frankly, i think looking back at it it was completely the right thing to do. and as we get through the questioning, i can talk about what happened later after 2000 when a lot of other folks discovered -- >> well, let's talk about that first period. what were the principle levers that you used? there was tough, there was renewed attention to the community reinvestment act, there were some changes in the rules for fannie and freddie in terms of what kind of mortgages they purchased. what were the levers that you used? and, perhaps, how did it change after 2000? >> >> well, the levers -- the two that you mentioned are real, but they've been exaggerated since by critics who say somehow that cra only -- obligations prompted the banks to do things they shouldn't have done. the cra obligations weren't changed, just stressed, just enforced. and the other dynamic that was at play here was previous to 1992 and the start of the clinton administration there'd been no oversight of the gses.

but legislation in about 1992 created what then was called, odd name, the office of federal enterprise, housing enterprise oversight, ofeo. a woman named alvarez came in from first boston to head that, and she did a fabulous job of oversight. but you can imagine a small hud office, an assistant secretary level person, she later became head of the sba, overseeing the massiveness of the gses with their lobbying power and their, you know, strength. >> they didn't like being overseen. >> they didn't like being overseen, but she did a good job. we were in constant fights with them about the oversight. and they had strong congressional voices, and it was a very tough environment. but one of the things that she was required by law to do, the same law that created the oversight, was to stipulate moderate and low income housing goals for them. and that was always an annual

exercise when her office came to the hud secretary and suggested what the numbers ought to be for that year. i was very cautious, it's just my nature having been a mayor, that you work with the private sector and you try to strike kind of a middle ground and never push the recommendations to the max. so i don't think we overstressed the gses, but we did for the first time impose some goals on them that required them to be active. so those were two of the levers. the principle lever, however -- not really a lever -- was kind of job owning. we had home ownership summits all over the country with these same 45 partners and their local counterparts, the american bankers' association, home builders and others. basically arguing for regional and local analogs to our national effort to encourage opportunity in home ownership. one of the principle dynamics here was the recognition that while the home ownership rate in the united states was 64%, the

african-american and latino home ownership rates were 42% at that time. fully 22% below the national average. later, as both rose and the minority home ownership rose faster, that is to say it closed more points in gap, the home ownership rate for the country got up to 69, the white home ownership rate got up to 74, but the minority home ownership rate got up to 49. never got to 50, but that seven-point gap from 42 to 49 was faster than the -- was greater than the 64 to 69 for the average. and white homeownership rates got up to 74. but that was a 26 point gap or 25-point gap from the white home ownership rate to the minorities even at the highest point. >> let me ask you about the overall that correct ri. a couple years ago you said to "the new york times" noting the 69% level; you think you have a

finely-tuned instrument you can use to say, stop. we're at 69% homeownership, we should not go further. there are people who should remain renters. but you really are just given a sledge hammer and an axe. blunt tools. >> that's been a theme of what i've known about government for a long time. when i was mayor of san antonio, i thought i had a fine scalpel to do sort of surgical public policy or a rheostat where you can turn up the lights in the room to exactly where you want them when all you really have is, you know, a sledge hammer, this very blunt instrument. and some have criticized and in some self-interested ways the governmental initiative in the home ownership as having created this. but i would argue that there's a dramatic difference between the measures that we took and the levels that we achieved and then what happened later. >> all right. talk about the difference in your mind. >> well, i have to talk about what happened later to do that. >> right. >> but i think what happened was the momentum was recognized and

then hijacked. and several of the presenters this morning have talked about the elements of it. but there came into existence really abusive retail interests, companies like aher quest, for example, that no longer exists and others, highly publicized in all the books that have been written about it. they came into existence for no purpose other than subprime lending and even predatory lending. you had people who came from other businesses to do this at the retail level. they did this in part because there was demand from wall street that had discovered this and was beginning to package in the form of special investment vehicles cdos and other devices that they created, the intricate tranches they would split out of risk to sell into the international market. so you had all kinds of wall street companies making obscene amounts of money, as we know, with compensation systems that

encouraged people for how much they could package irrespective of the quality of it. there was almost no concern for the quality as it moved into international markets. we know there was a kind of a glut of money in world markets. chinese money, petroleum money, european money and countries like iceland and germany and others bought this. we had the rating agencies rating it the way that they did, aaa ratings for even the most dangerous tranches. we had the federal reserve continuing to express concern about the earlier dot.com bust and keeping interest rates low so there was a world awash in capital. and i think the fed has not ever been sort of held to account for the dimensions of their complicity in this. we had chairman greenspan, for whom i have great respect and worked very closely with. i was once a vice chairman of the federal reserve bank of dallas.

but who was advocating a deregulatory mindset that didn't recognize the immensity of what was building all this time. >> you were on the board of countrywide -- >> later. >> later. >> and i'm happy to talk about it. >> and they, obviously, became enmeshed in much of this. i'm interested in what you're kind of suggesting. the mindset was, obviously, there wasn't a lot of attention to the quality, the loans are being sold off as securities, it would be securitized, no t a lot of attention to the quality. did that ultimately, basically, when you talked about kind of moving beyond the boundary, you know, in your observation, is that essentially what happened? basically, you had to go to people who were more and more credit risks and, ultimately -- >> i think what happened -- >> not in a position for home ownership? >> i think the government, and i'll go back to your point about blunt instruments. we started a process, and you never -- one of the things i regret about this period is not knowing what form it would take, where it would go, who would, who would abscond it, you know?

so there's that. you tried to do the right thing, you neverñí

>> i mean, local officials as a mayor, cabinet officer, board of countrywide -- you've been a

developer now for the last few years. and some of those projects have had difficulty in -- >> the "new york times" put me on a cover of a piece about two years ago as the face of the crisis. that's not a pleasant -- [laughter] >> the full sunday picture. [laughter] >> and one other dimension that you informed us of last night that you live in a very working class immigrant neighborhood in the home of your parents or grandparents. >> grandparents. >> i mean, you've seen this from many different angles. let me ask you -- >> let me go to the countrywide angle for a bit because there's an intersection that's kind of interesting. first of all, before i go to countrywide let me say about fannie and freddie. first of all, let me tell you the business i'm in. today what i do is assemble constitutional capital and invest it in middle incomed housing and i've done that since the year 2000. we built about 7,000 homes across the country in 12 states, about $2 billion worth of housing value.

very focused on the middle man in the city. so it's a little bit exempt from the crisis because that tends to be suburban large track homes. i say that because auas i -- as i return to the housing field, in 2000 and started this company, which is what i want to do the rest of my life, i was asked to go on fannie's advisory board, which is not the governing body and which is not compensated. but it gives you a kind of insight into the way fannie and freddie operate which i'd known from a distance being the head of the oversight body, but not as a filter. so i'm at a meeting about 2002 and frank rains is making a presentation on the efficacy of subprime. in effect, he had a white paper done by, you know, ph.d. rocket scientists who said that

subprime is not a bad thing. subprime is just a way to price risk. so if you extend to people who are -- in categories that would not have been qualified before, you simply price it higher. and you can be fiduciariarily responsible to your company and not create potentials for huge default and get more people involved. so he was making kind of a politically idealistic and socially relevant case for subprime being a viable instrument if you think about it as a mathematical device to price risk. and expand -- and expand homeownership. so that was clearly a kind of decisive moment in the thinking of fannie and freddie. and they were motivated not only to expand homeownership but because they saw others going there and felt the need to -- to be relevant in the market.

>> were you convinced at the time? >> well, i was skeptical but there was -- there was -- i'm not in that business, so i was -- so it didn't strike me as completely right. it struck me as something to watch and be careful of. but you may remember there was a group called fm watch that came into existence which was the private providers of mortgages, and they were pressing fannie and freddie on the market side and i think fannie and freddie at that moment felt like they needed to get into this business or they were going to lose market share. so that kind of tells you kind of a little bit about fannie and freddie's entrance into spheres where they had not been before. and it's not the government that forced them there. despite the critique that's the case. it was market factors. and then they took it to the extreme and they had their own expense issues and accounting issues and mismanagement issues that created the crisis. >> before we bring in the audience, the question i want to ask you, though, is as i said having seen it from all these

perspectives, do you think the gap between the minority level of homeownership and the white level of homeownership can be significantly reduced? and if so, what is a more sustainable way of doing it? because obviously the method that we tried over the last two decades ultimately ended in tears, however, it started. >> wrong it's not what we tracked it's what happened. as certain elements decided it was a pertinence on the ground force. >> how do we get back -- >> we avoid that for sure. i mean, we deal with credit standards that are more responsible. we encourage people to become homeowners but on a steady basis recognizing that not everybody can at any moment. i've never indulged in the game of what the homeownership rate ought to be. but sort of the facts on the ground tell us it's probably around that 66% hike that we have been before and about where we are now. i mean, the interesting thing

is, we're at 66% now after this crisis and 66% was the all-time high in the history of the country before this. >> uh-huh. >> so we're -- we're still at a very high level compared to our historical norm. and we're at a point where -- you know, it seems sort of reasonable, a clearing point where homeownership rate ought to be. clearly, it takes a while for immigrants to become homeowners. maybe an entire generation. maybe the first generation can't be homeowners. but their children can. but the kind of effort we have made in the past where communities are involved and churches are involved, minority organizations are involved -- in order to get people prepared through homeownership counseling, intensely working on the ground in ways that are fair and responsible -- i think those are the kinds of mechanisms that have to go forward. >> i want to bring in the audience in a moment.

>> i was just going to say we clearly don't want to unleash those forces that were unleashed before without supervision. and that tell us that the derivatives market needs to be overseen. that tell us that you can't have this kind of on the ground retail operation without some sense of professionalism of what people are maybe even licensing or certification for mortgage brokers. it tell us that the rating agencies have to operate according to better standards and we know that's sort of en route to happening. and a lot of other elements of this that just got out of way because the way our system works. >> two policy areas and maybe a couple of questions. some of the panelists on the previous panel argued and there was a debate about this. would retrenching the role of the gse's reduce access to homeownership for moderate-incomed families? >> well, it depends on how far you retrench. if we eliminate the role of the gse's i think the comments made

by shanna and sarah and jerry howard are correct. we would have trouble sustaining the 30-year fixed rate mortgage. we would have trouble in times of economic retrenchment offering and continuing the strength of the housing sector which is so important to the economy. so the answer is, yes, if we eliminated them. i think what's going to occur is that we're going to keep some of the essential function. they won't be known as fannie and freddie and i don't know what happened to the buildings on wisconsin and out in mclean and all the people who were in them but some kind of different structure will exist because the function of securitization of collecting mortgages at the -- that's what happens when you talk about fannie and freddie. [laughter] >> yeah, yeah. [laughter] >> i think that the function of assembling mortgages, securitizing them and creating liquidity so that money could come back into the housing mortgage system is absolutely

critical. other countries that don't have it seek it. and if we didn't -- if it didn't exist, we'd have to invent it because it's been so powerful. and we have to separate the good things that that system produced from the abuses that followed. one of the critical things we have to do in this episode is disaggregate the lesson and make sure we're not reacting to the wrong set of facts, the wrong lesson. i think what caused this problem is not the fact that we had securitization of mortgages for the last 30-plus years. >> i want to save one policy question for the end and see if there's any questions from the audience. you've been very patient. anybody -- yes. just identify yourself real quick, please. >> i'm ron clark. and i want to get back to the question that was asked of jared bernstein when he was asked what the connection between education policy and housing policy is. he answered primarily through an education policy, i think, but i was wondering if you could

explain how you see the secondary market working to provide affordable rental housing opportunities in areas that do have higher opportunities in the terms of jobs or schools or anything along those lines? >> well, it's an interesting fact, not discussed much today but fannie and freddie have been absolutely essential to the provision of rental housing over the last five years or so. through the buildup of this crisis and during this period, you really could not build a partner in the united states without fannie and freddie. we just wouldn't have had construction lending and support for the multifamily sector without fannie and freddie's presence. i think that's another element of what we need as a function of the government of the gse's going forward. and that's -- and that's critical because we need more balanced housing policy, and we need more apartments. yes, homeownership is important but for the first time in many, many years, over the last

several years, there has been very little production of apartment. a company like tramaco residential that has built hundreds of thousands of apartment units across the country, last year, in 2010, for the first time in its history, started zero, not one new apartment in the united states. so we're going to have a problem on the apartment side. apartment, multifamily people are happy that prices are going to rise but already we know that there isn't a single market in the united states where a family earning the minimum wage can afford the rent -- fair market rent on a two-bedroom apartment. it doesn't exist. families are both overcrowded. they are finding, you know, unsafe -- finding themselves in unsafe substandard apartments. we need the gse's involved in that as well. >> you spoke about education on the outset --

>> well, i guess -- my question was kind of a question of geography and opportunity and making sure that you're getting the right kinds of rental options in places -- >> okay. >> i guess the lights go out when you talk about frannie and freddie, the sign fell down. and just making sure there's an appropriate distribution of rental housing opportunities so you're not having reconcentration of poverty. >> right. >> you're not having concentration of affordable housing in areas that have a high concentration of people with color. that type of thing. >> it's a very hard problem and you talk about your situation in san antonio in a historically depressed part of the city. that was homeownership. >> home development. >> but the issue you raise of building apartments at moderate prices and affordable prices is a very tough one in most places because of opposition on the part of communities. but we've seen some progress in recent years, frankly, the

progress we've made in eliminating the worse of public housing through the hope 6 program has allowed mixed income multifamily in central city neighborhoods across the country that's generally regarded as very, very positive. places like atlanta where they have now -- the only housing authority in the country that has eliminated every single one of its old-styled deteriorated public housing projects and replaced them with mixed use multifamily apartments. >> let's go over here for a question. >> if homeownership and house prices are tied to the unemployment rate and we have a high unemployment rate right now, i think you have to ask the question, is the employment rate sustainable? because if you look at our unemployment rate right now, we say it's high but on a historical basis, based on the percentage of a sort of adult-age working -- people that could be working, our employment rate is actually higher than, you know, if you look at the

1960s or so with more women entering the workplace. so, you know, i really have to wonder, are there going to be jobs that will continue to support sort of two-incomed families, you know, jeremy rifkin wrote a book "end of", you know, are we getting to that point? >> you're right the unemployment crisis is more severe than the statistics indicate because in addition to the fact as you mentioned are people who have fallen out of the labor force. that is to say, they've been in it -- unemployed so long that they fall out of the labor force and they're not even counted as unemployed. so some suggest the unemployment rate is really probably 11-plus right now. it's a very serious problem. and clearly, it is a problem for the -- the housing industry. but there's a kind of symbiosis there because not only is unemployment keeping people from

having the confidence to buy and be able to rent, but the failure of the industry to restart is hundreds of thousands of jobs. in ordinary times, the housing industry and all its elements, construction, finance, transportation, materials is up to something like 17, 18% of gdp. so it's very, very important. we have not had an economic recovery since the end of world war ii that wasn't led in a significant way by the restarting of the housing industry. we're not getting that in this economy. so there's a real connection there. and, you know, i remember as mayor talking to a builder of a major developer in my city, the one statistic i have to have to know how much i will build, whether i will build this year is the employment numbers, the employment growth numbers. so that's -- you know, unless we

suspend sort of commonsense economics, we've got to get the jobs machinery started again if we're going to get the housing sector. and the housing sector has to restart in order to get the jobs machine regoing. so it just points out how important it is to this administration to focus on things like eliminating the foreclosure overhang and other things that was talked about this morning and others in order to get this jobs/housing relationships right. the other element is the other one the gentleman spoke to which is, of course, education and we now know education is so critical to the nature of the new jobs that must grow in our society. there's kind of a new iron rule i have heard described as high skills equal high wages, low skills equals low wages. and to prepare our people for international trade professional services, health care

biosciences, new media, all of the elements of the new american economy, education is clearly important. >> let me close by asking about one other hot button policy area. and we heard on the panel that the mortgage interest deduction should not be revisited now today or changed today while the housing market is so depressed. but you were on a panel, a bipartisan debt reduction panel, sponsored by pete dominici, that reform with a refundable 15% credit. talk about why you were able to endorse that proposal and what effect you think it would have on housing going forward? >> well, i think the principal motivation for my signing on to the whole report we have a massive problem in the country with respect to debt. it struck me in the very first night of deliberations of this commission that we were told this cannot be solved through the normal mechanisms. it can't be solved by cutting

programs. it cannot be solved by raising taxes. it cannot be solved through growth. in fact, we have to have all of the above, on a major scale. big time cuts, substantial increases in revenues. and stimulate the growth that will grow our way through this. and failure to do that is -- let me see if i can get the numbers correctly. we have presently a ratio of debt to gdp in about the 60s. where the traditional norm has been about 35, 36% since the end of world war ii with one blip in there which was world war ii itself, right? we're now on a path whereby 2020 we'll be at a 100% of gdp and by 2030, 200% of gdp. we've never been there before. no successful industrial modern economy has ever been there before. so even as a democrat, as a progressive, as a mayor working

at the local level, i understand the immensity of this challenge and what needs to be done to get it under control. so that commission in the final analysis recommended a lot of things that are very difficult. like a value added tax. like cuts in defense and tweaking of entitlement programs. we didn't get into the social security age. we did it in some other ways. but one of the things you have to acknowledge is that the home interest -- the home mortgage interest deduction is a huge tax expenditure. it's a massive number. and while i don't advocate fiddling with the fundamental mechanism, it's certainly viable to me to think in terms of second homes, vacation homes and boats and all the other things that are covered. so that's kind of where i was coming from. in the final analysis, we opted for a credit as opposed to the present structure and many

advocates think that's a superior way to do this because one of the things we did to make the tax increases palatable in this report was to simplify the tax code. we got tax reform and elimination of a whole lot of special interest credits, corporate credits and so forth, for a simpler tax structure, and this fell in that. >> we're going to go -- we're going to let everybody get out, jerry, on the previous panel was pretty confident that the mortgage deduction would remain as it is, even as the deficit conversation grows louder. are you confident? >> i think how serious the congress ends up being about the debt and deficit overall. if they're really serious and they put something on the table that hurts a lot of interests in order to get the, quote, big deal that's been described, then i think there will be changes to the home interest deduction. but it will not be eliminated. it will be things like second homes, vacations homes, boats

and other things that would probably be taken out but as jerry howard said in a private conversation earlier, all of those are there for a reason. there are interests and powerful interests that protect each one of those so it's not an easy fight. am i confident that we're going to have a big deal? no. do i think we're going to somehow muddle through this? i hope so. muddling through would be a victory in this case. [laughter] >> well, we have hopefully more than muddled through three hours of pretty stimulating conversation. we appreciate all of you staying with us. i don't know if john has any final words. i hope that you will join us in the future for further discussions in the heartland monitor series. every quarter we try to explore how average americans are navigating the economy in both the poll and a supplement which you have with you and thanks again for joining us and we'll see you in a future media atlantic event down the

now a discussion on the role of community organization on profits and other civil society groups in egypt. this panel at the brookings institution includes representatives of the youth movement and the egyptian business community. parliamentary elections are scheduled for june. [inaudible conversations] >> all right. good afternoon, ladies and

gentlemen. welcome to the brookings institution. my name is john page. i am in the global development program for the blocking the institution. is my privilege to be the moderator of this panel this afternoon and. the topic is the role of civil society in a new egypt which is a topic that is both timely and important. i was in oxford over the weekend and speaking with a friend and he said to me you know, i think the jasmine revolution and the changes in egypt really boiled down to two things, jobs and justice. and of course it is clever alliteration. it is also quite a penetrating thought and today as we discussed among ourselves and with you the issue of civil society in egypt we have

representatives from civil society organizations and the youth movement in egypt we need to keep in mind the issues of jobs and justice and panelists will speak to the role of civil society and deliver both. without further reduce let me introduce the panelists, their biographies are in your hand out so i won't try to summarize their academic or professional histories but they are a very distinguished group and i will begin at my far right with shadi hamid, director of research for the brookings doha center. he is visiting us from catarrh and we're lucky to have him here. to my immediate right is an old friend, hisham fahmy. a distinguished egyptian diplomat actually. who has had a long career with

the american egyptian chamber of commerce in egypt which is the business association. to my immediate left is kackie kameel, managing director of the nahdet el mahrousa foundation, leading civil society organization in egypt. her left is awais sufi, vice president of the international youth foundation. another of the co-sponsors of this event and finally at the far end of the table is awais sufi -- sorry. is amira maaty, program officer for the middle east and north africa and the national endowment for democracy. quite a range of expertise and interest on the panel. we begin with asking each of the panelists to make five minutes of remarks according to their own interests and themes.

let me begin with kackie kameel to my immediate left. >> i will speak about the expectations of civil society underneath. actually help us to a better job in egypt. basically the role of the civil society for me is identifying issues in the system and try to come with solutions to help throw these. for example in the area of job creation and employment we would do two things. one is creating an entrepreneur real ecosystem to support the creation of new jobs and also help fill jobs in the market. and filling jobs in the market of two types. whether you link those jobs or the vocational tracks of

education because there is this problem of people not wanting to have these jobs will work with employers to try to secure good quality and better terms. to do such the job freebase a clean need key areas of support. with regards to government would basically needed regulatory environment and but this we mean when regulation for transparency rather than control. we have been talking in the morning about how much nora roberts has been handling the progress of the work of the civil society. we want to oversee what we're doing in a way that making sure that rather than checking each and every step we make. and then putting this lot in enforcement. the law might not be as strict

in hell is being implemented. so it poses more restrictions on the law that is available. there are some guys with banjos do they can't get because they are enforcing more restrictions on banjos. we also care to have a space to operate and openness to partial between government and public institutions and a civil society. we want to be perceived -- rather than a competitor or a challenge to the government we are still pointing and mistakes are issues we're trying to help this government do better job. and there have been these issues in the hosni mubarak area that would never was doing a good job so that you can actually inspect

a large number of people. governments want to take that work that is being done and we have seen many civil society organizations being eaten up by the government institutions. we want to see more support to development. we want to see supporting locally created and designed programs to force the issues to the condition of these issues to create solutions for them because we take so many things into consideration, designing solutions to take these things into consideration. also with regard to supporting -- as we were mentioning in the morning we wanted to see support going through the creation of institutions and other than programs that would do the

intervention and after those five years and the funding is done everything will not go back to how it was or worse than how actually creative and imbalance to continue supporting the service but not the balance they were. and the effectiveness of donor dollars. we see a huge number -- not toy huge amount of money at each level especially with international organizations, 10% to 30% with real beneficiaries so we need to work and new mechanisms to make sure we maximize the benefits of the real beneficiaries rather than having all of these. specifically for the youth led indias we need to move -- change

the concern that was preventing civil society is to be dominated other people buy a certain profile of people and this is changing and we want to see more space given to use a vacant due the chan we have the events, egyptian american community event for where we try to engage to actually have the responsibility shaping the new egypt. in egypt, we were -- one of the

leaders in creating the egyptian youth -- the egyptian youth fled ngo and try to create a coalition of youth fled ngos making sure there's always -- they talk to each other and assemble what they're doing and the impact of what they're doing. >> very good. now to hisham fahmy who will talk about the business perspective. >> good afternoon. this is a new egypt and getting an egyptian to talk five minutes is a challenge. i was asked to talk about business associations and what they're doing well and how they should be looking at egypt in

long run. a represent -- since 1982 we have 1800 members and we serve our members in the business community. on the short-term obviously as an association personalization is for the dominant way forward in egypt or anywhere but there are so many challenges and the moment in egypt on the economic front and the business front the there are common issues to all of them and we have identified that we need to support our members in different sectors. we have been talking about civil society but there are issues at the present time in egypt that have a tremendous effect on whether this revolution succeeds

or not. it is critical that we do everything that makes it succeed. i want to give some examples of what they're doing. there was a cute problem in the financial sector. banks were closed for a long time. the stock market opened only yesterday. our members have issues opening lcs because western banks of looking at egypt as a risk so they were not confirming letters of credits that would transfer issues. central bank was making sure there were no huge transfers out of egypt especially for those under investigation so it was hard to transfer any funds out of the country even for business issues. foreign-exchange has crept out in the first couple days that

banks opened. $2 billion to $3 billion left the country and there were speculators on the foreign-exchange with central banks stepped in. we and our to 595. the expectation will go to 6 pounds or something. we are talking to our members in the tourism sector. tourism as you know has suffered tremendously and that has an effect on so many people. they worked in the tourism sector. their salaries are very low and they get all their income from 12% service charge that tourists they. so you have thousands of people who suddenly without and come

and also the indirect effect of restaurants and so on and so forth. working with our tourism sector and the government on tourism companies can be relieved of some of the burden. issues on logistic support had huge problems. there was a curfew for a long time. there's still a curfew from midnight until 6:00 a.m. and that sort of put a spanner in the works when you're trying to shift from alexandria to cairo to the south and so on. so working with the higher council of the military to get special permission is for trucks to go through during the night and so on. we have been working strongly just to get involved in politics but it involved in the awareness. huge discussions of the

constitution or the referendums. what happens after yes or no. parliamentary presidential first and so on and we invite a lot of people. there were many strikes by workers. this was a revolution of people wanting better pay, better justice, better treatment and we have been working with our members to look at human rights of the employees really. there are disgraceful companies paying a very low wages to people and we have been working with them how to increase or treat their employees properly but also remain competitive in the workplace. on the long term there is a huge skills gap between what companies want and what the

education system is putting out and business associations have refuge educational program and we embed a lot of u.s. associations curriculum in some of our education and so on trying to get matchmaking between u.s. companies and egyptian companies. all those for implement. in any business in need the private sector to the point work to get people employed. we have been promoting work ethic and culture and engaging decisionmaking. capacitybuilding of business association is something that is so essential. so many business associations have follow-through with a charismatic leader when that believes the association collapses so you really need the building of professional staff

and to the research to it to be events and membership and so on. getting business associations, to do membership development, advocacy and coalition building. this has to be done by the business associations and it can be. just needs the encouragement of private sector members and the whole world quite honestly. we had a huge part in the square and the bigger the party of the bigger the handover. we are now suffering a hangover but hopefully we will come out of it quickly. thank you. >> thank you. nexus is awais sufi who from his perspective will talk to about the external ngo community and

what they're trying to do in coming months and years. >> thank you very much and thank you to the brookings institution for hosting us today. the international youth foundation is a global ngo. we work in 70 countries around the world that we have been very pleased to have been working in egypt the last six seven years alongside our partner nahdet el mahrousa and host of other partners. multinational companies and local companies and civil society organizations and one possible government. we have watched what has unfolded in egypt in the last few months. we have been like everyone else very excited about the possibilities. we have seen a youth would revolution. our approach is an asset based approach meaning how can you use youth as assets to confront, address and so societal challenges and youth of egypt have been instrumental in changing the game in each and now the real key will be how can the international organizations

such as ourselves and many of is represented in washington and globally support youth as well as all of egyptian society in terms of moving forward. in that respect i want to talk about two or three or four things particularly relevant from our perspective in terms of what the international community can do. the first time would like to mention is beginning in new consensus based approaches to public-private partnership approaches to push forward egyptian development. as you have seen in the last few months there is an enormous number of voices through institutions and individuals that are out there that are -- have been silenced for a long time. or if they have been speaking they haven't been speaking for the clearly or as loudly as they would like. the key will be to create a framework for that type of

dialogue to go forward. there are some internationally tested models that many civil society organizations have adopted that we should be looking at to integrate e egyptian context so we can have a consensus based discussion of what people doing and do they continue to perceived gaps and how is it they can work together to address those gaps? these dialogues will be challenging. there are a lot of forces but they need to be opportunistic. how can we build some momentum around some concrete avenues for change and stimulus of the economy of civil society particularly now that the hangover is in effect. let's see what aspirin or medication we can put in for immediate relief? second of all i would say another place we need to be focusing heavily on his capacity building for civil society.

the hosni mubarak regime had comprehensively decimated the ngos sector. was the way of insuring adherence to the old order. at this point we have an opening but however those organizations are going to need the core institutional capacity building support that civil societies are able to benefit from. things that are simple and practical. budgeting, financial management, human-resources, operational strategy. the basics about how you build and grow and sustain an organization to create a long term enabling environment for the development of the country. alongside the institutions we need to focus on specific technical and programmatic areas those institutions should be focused on. i am interested in employment and entrepreneurship. there's business interest in stimulus and international donor relations in stimulus. how can we equipped society

organizations with capacities to support those things along the way. on the same token the other side of the calling we need to be looking at creating an enabling environment for the creation of programs particularly around employment and on fbn orship. at can the international community work in close partnership with organizations and help them build their capacity and their leadership capability to take forward in concrete ways of ensuring quality outcomes in terms of employment so how you conduct concrete and effective labour market assessments, how is it you develop and design modules suitable to the business community. house even to great job placement strategies that ensure long-term success in the marketplace for young person entering into a new job and on the other side in terms of entrepreneurship how do you create access to financing

alongside of strong business to the ottoman, support services were a young person or anybody can receive good, candid quality advice on how they can build and grow and enterprise to create the kinds of jobs they need for a country of eighty-five million people in dire need of economic activity. these at the types of things that are out there that need to be pushed forward. lasting i will mention is one real opportunity now and this will take some creative thinking from the international community with strong partnership and leadership from local civil society in egypt is this idea of leveraging the enormous energy and excitement around the rebuilding of egypt. egypt is a country i have worked with for many years and this is amazing. this is a place among the oldest civilizations in human history, may be the oldest and they have such an enormous cultural and historical foundation to be built upon. i was amazed in cairo few weeks ago to see how clean the streets

were for the first time. the fact that individuals took up the responsibility in the absence of other formal authority to keep up community and protect their communities. this is an energy that can be built upon and is something we need to look at models of service learning. how can we use this framework where people are excited and interested in building their communities and using that as a means of building skills, developing opportunities for employment for entrepreneurship for bigger and broader development in the tourism sector or other regional and initiatives. it is and managing that needs to be honest and the international community can help push it in the right direction so hopefully that will start as out but look forward to any comments from you as well. >> one of the deeply held values of egypt and and arabic culture is hospitality. there are people standing in the back of the room who could be

sitting up here. if any of the would like to come forward and have a c we will go on for another hour and when you are back with me on c-span for a moment he would feel better and i would feel better and any other members of the panel would feel more comfortable if you were actually seated. turn to amira maaty of national endowment for democracy. long history of involvement in the region and in egypt and going to offer some thoughts on where we go from here in terms of building democracy. >> i will focus my comments on civil society organization, political reform and human rights. some comments, point mentioned about what other panelists talked about in terms of

capacity building. pre january 25th revolution environment civil society was restricted by the regulatory climate and security climate that affected their ability to live and operate. they were also affected by a population largely seen as apathetic. this has changed in the cultural revolution environment and now there is a huge opportunity for organizations to serve as the link between state and society at large. a couple of key opportunities that exist now for civil society organizations in egypt. the first is setting the agenda during the transition process and that includes consensus building, recommendations, targeted and effective advocacy. a second point is keeping the momentum changed going and monitoring the transition process and that includes activities like monitoring information on the transition process. grassroots campaign, essentially to keep the pressure going for

effective democratic reform. another area that is pushing open space and sectors that have previously been closed or restricted including a wide range of legislative reform concerning opening up the regulatory environment that restricts political parties, professional associations, labor unions and other institutions in egypt and also engaging with sectors that have largely been closed off to civil society including universities, student clubs and the media and especially broadcast media which is very much restricted. and another point i would add is insuring greater transparency and accountability on the part of decision makers at the local levels rather are elements from the former regime and i would add to the accountability and transparency that there's a need to go beyond monitoring policy and look at fiscal policy in expenditures which is an area that needs to be developed in a

civil society. finally i would add there is one sector that is largely absent from the larger political reform and that is the small and medium enterprises which will play an important role in linking the economic reality with political reform and have been some inklings of associations that have developed in that sector but you could play a more active role in the policy-setting. in terms of the challenges facing these groups that need to be addressed in this period, there were three categories of priorities we identified for supporting civil society efforts. one is supporting coordination efforts. the second is scaling up successful models and the third is sustainability. in terms of supporting coordination efforts it is important to note that there are already coalitions forming within egyptian civil society. there have been some good

examples such as the front to defend protestors with established a year ago that legal assistance, medical assistance, follow-up and report each detention of political activists and protesters. there's another coalition of 200 organizations forming to promote active and informed engagement in civic education. there's also a coalition of 16 human rights organizations that within two days of hosni mubarak's resignation issue roadmap with concrete recommendations sector by sector on the reforms that need to take place in the transition process and subsequently created an action plan to correspond with the road map. there's also a coordination committee that unites between different coalitions. there are some organic coalitions forming.

still some division within civil society that these are issues that need to be supported and the caution against supporting them financially. they have been working on a voluntary basis. the greater need to support your technical assistance. in terms of strengthening linkages between different society actors is another important point forward nation efforts. over recent years there has been a blurring of lines between different forms of civic institutions. a blurring of the line between political parties, union associations, media. barista be better definition of these entities and a better understanding how they work as part of a public reach collective objective. hopefully with the regulatory environment there are opportunities to open that up. there may be a morphing of the stiff and organizations and groups who found it ineffective to work as political parties or

civic unions instead of registering as unofficial ngos who could open and registers different institutions. in terms of scaling up, most of the civic and political organizations have been consolidated in the greater cairo region. there are some groups who emerged over recent years especially that link between local governments and constituent needs so there is going to be a need to expand beyond the capital area and to support civic and political initiatives. i would also caution against scaling up by overfunding organizations as we mentioned before. many institutions are quite weak so we have to be cognizant of the ability of these organizations to absorber additional funding. finally in terms of policy impact, instead of working in silence it is important for these groups to be felt on a

larger basis. much money has been spent on civic education programs in egypt but they have been limited to a certain group of beneficiaries because there has to be the ability to institutionalize them for them to be adopted in policy and implemented on a larger scale. ngos have to push on that level as well. as far as sustainability my colleagues touched on the need for capacity building. there are incredible groups of activists and greater innovation and creativity among civil society leaders in egypt but there are institutions where there is the huge need for building democratic, sustainable institutions and part of that will include the legislative reform we talk about opening up with restrictions that sustained these instructions from operating in the past. thank you. >> thank you very much. last but certainly not least, kackie kameel has been commenting on egypt for some

time and will give us some thoughts on civil society and political evolution. >> here is the thing. in the best of circumstances democratic transitions are notoriously messy and unpredictable. we have to be aware of that from the get go. looking at past transitions the role of civil society is extremely important in ensuring that transition process moves forward and the demand of the transition or the revolution are actually fulfilled not just in the short term but over a long tower. this is where civil society organizations face major challenge because they have been oriented around opposition. they never had a stake in policymaking and that is different from the role of civil society in the u.s. where civil society is a partner with the

government sometimes in terms of packing policy makers and so on. we are talking about a shift in the model. we're talking about 60 years in a position, we are asking groups to provide a transition to a new scenario. there is going to be a learning curve. maybe word about youth coalition they are at the forefront of these revolutions and a lot of people are watching what they're up to in coming face. this is where we see major challenges. if we look at the eastern european colored revolutions, the major youth movement in serbia, and after slobodan milosevic was overthrown, had to think about what we are going to do in the new serbia.

whether we stay outside the government watchdogs to actually take part in the political process and maybe even in government they formed a political party but only won 1.6% of the vote in the subsequent election. groups in egypt are thinking about that and there's a discussion about whether or not to take part in political parties. that is an important lesson to remember. if these groups want to become political forces that are effective, not only what they are against but provide positive construction for egypt's future and get into details and vision and that is one area we have been lacking. it is very early on. it has been slightly over a month since the revolution happened.

as amira maaty said civil society can play an important role in setting the agenda. up until now i think one problem we have seen is civil society organizations have gotten sucked into this debate about the referendum and now is the number one focus and because of that, the more medium and long-term issues in my view might be more crucial and now that the referendum actually passed there in a difficult position of parliamentary elections within six months. as of 0 -- a major role in electoral design and this is something i have been harping on a lot about. what electoral system, currently egypt has a winner takes all majority system consistent with

what we have in the u.s.. it is almost impossible for small parties to win. it benefits the larger well-organized party is like the muslim brotherhood, with the national democratic party. we want smaller political parties to make sure in the political system how do you do that? you have a proportional representation system. they will not be locked out. we haven't had this conversation, the kind of thing that society takes a lead on. this is not easy because in some cases egypt hasn't had to have that discussion for 60 years.

that is it. [microphone noises] [laughter] >> this is -- [inaudible] >> that is obviously one area --

just one last point on this. in terms of learning from past transitions this isn't the first time a country has gone through a transition where there are other emerging democracies that went through this like indonesia or latin american countries that had to deal with a lot of the same issues and this is where civil society in egypt can learn from past mistakes and lessons and we have to think of ways to get those groups together. e egyptian counterparts should be meeting with eastern european counterparts and indonesian counterparts and having a discussion about how they can play a more constructive role and close with one last related fraud. it is important for discussion, we talk about civil society a lot here. we talk about civil society lot

here in washington but there's always an elephant in the room because what is the biggest ngo in egypt? the biggest ngo is the muslim brotherhood and the conversation has become so focused around secular and liberal ngos that we're losing sight that many ngos if not most are faith based similar to the u.s.. the role that churches play in social service charity and other things of benefit to the community. we have a discussion about secular indias with the islamic counterparts and also u.s. standpoint how does the u.s. government engage with islamic oriented in ceos and providing assistance with funding is unrealistic. there has to be some interface and we haven't had that

discussion either. >> thank you for handling the microphone trauma so well. one of the fun things is i get to ask the first couple questions and i will but let me assure you that we will move to the audience. just ask two or one depending on how long the panel is. as one watched the coverage unfolds of the events in tunisia and egypt one couldn't escape a sense that part of the issue of justice was linked to the question of the economic model in both countries. both countries have gone for economic reform and an opening

to the private sector. unless one gets the economy going again the issue of jobs which was very much at the center of this will not be solved. but for longtime sympathetic viewer of the region there has been a lingering sense in many parts of these societies that the kind of economic system that came out of liberalization efforts wasn't an open system or a fair system. at this moment there is a real risk that there could be a backlash against the very engine that will create jobs which is the private-sector. i was wondering if the panelist had views on how we could help balance the need for a vibrant, active, job-creating private sector with what i still think is a deep-seated sense that there has to be a certain sense of social justice in the system as well.

let me just turn to which ever panelist would like to respond. i hope all five will. this balance between we desperately need jobs and business and business people but we need an open system in which the aspirations of people become business men and the way in which business men operate themselves to create a sense of justice and fairness for all. >> let me try. this is a great question and a very tough one. i wish you wouldn't have taken the moderator's prerogative to go first. in any event let me start the dialogue because this is an answer to your question. it is clear that the liberalization that has gone forward in the last many years has resulted in substantial disparity in terms of the

economic classes that benefited substantially in the vast majority of egyptians that did not and that could be looked upon as a fundamental deficiency in the system of economic liberalization or from my perspective, i am not an economist but i am sure there are good educated opinions out there that you can validate this or the contrary. in many respects it seems that liberalization was another tool used by the government to essentially extract wealth and take from the common person. that is not to say liberalization wouldn't have potentially had challenging implications in terms of disparity in the united states and other places. we are seeing increasing divide socio-economic lead but nonetheless when you have a system that enables monopolists

to force privatization of major government functions and welfare and benefit greatly from wealth perspective is going to cause substantial disparities and also a great deal of antagonism toward the private sector which is the source of your question. in terms of where a civil society can help i am not sure there's a perfect answer here but we need to be focusing on encouraging open transparent approaches to leveling the playing field. as we look at the creation of new systems of promoting economic growth, trade liberalization we need to be looking at industries and rules of the road applied fairly to all and we need to do that in a way that is consensus based and transparent but at the same time do it fairly quickly which is

the big challenge here because we can't be twiddling our thumbs over new regulatory regimes for years and years. things have got to get moving so we have to create a framework in which the rules of the road are made clear. they are open to all and they are creating an enabling environment for the types of industries that want to move forward to create jobs. last thing i would say, one of the things we have observed in our own work in egypt is so much of the economic growth was with and the real-estate sector and non job-creating sectors and it is a big challenge with respect -- large investments being made which inflate grow from several sectors. and other types of industries that are more labor-intensive

and can feel comfortable that there is a vibrant private sector a round. >> thanks for being first to volunteer. i have heard a little grumbling so i will turn to him and asked if he wants to respond. he had a number of suggestions in his opening remarks that speak to the question i just asked. >> i always grumble. let's look at 2010. egypt for the third year, best performing emerging market. best finance minister in the world. how much the best to hold up the best exchange rate.

what went wrong? we have three years on the economic growth of 7% to 8%. i go back to what sushi was saying. it was not a level playing field because of the huge bureaucracy in the egyptian system.

should be done quickly. until we get through this time. you mentioned tourism. our hope the u.s. removes the ban on travel to egypt. other countries still have this ban and affects not just the tourists but the x factor working with companies in egypt and so on and so forth. many things can be done. >> i will talk about what we do in the area of job creation and we basically have different things. one is trying to improve the quality of education.

we hope entrepreneurs. development is an important thing we try to support. we don't have to keep doing what we are doing and have the same industries that we have but we want to create new sectors and support young people with their own businesses. the country of entrepreneurship with offices inside public universities and work with students on understanding you don't have to graduate for a job immediately with you getting a job you want to create a couple more jobs once you graduate. support for those entrepreneurs who survived the first few years and the need for incubators is a

huge need in egypt. not that it isn't an incubator but we need to seek more for business enterprises. and the organization of resources whether it is knowledge or financial resources or technical support. they create an ecosystem to support the creation of more jobs. especially among youth. >> anyone else want to stay on this one? net >> now it is your turn. what we are going to do, what we will try to do is take three or four questions. if you keep them short and we take more of them. can i ask you to identify yourself, wait until one of our people comes with a microphone so you can be heard outside the room and we will let the panel

respond to questions as appropriate. let me start with professor lays who wanted to start before my question. >> georgetown university, way back. i am married now. i think that the title for this very important session ought to have focused on something other than the roads. the reason for this is ngos in egypt had been established a long time ago but they have been weakened because of the application of a term that we

know in economics, during the gold standard was observed that the coins were less contend that gold and circulated and the coins with more points, were melting and sold in the market and therefore it was a very important law that came which said that the bad currency drives good currency out of circulation. i may modify this egypt and i said bad people drove good people out of circulation. so there are many organizations. they know exactly what they are

doing. they were established for a specific role but they had been handcuffed by the system. a prominent sociologist, professor was thrown into jail along with other -- 20 other advocates, simply because they monitored the election and challenged what mrs. mubarak had said one time, her statement about the transparency of the election. they showed without any doubt that the elections were not clear, were not transparent and therefore he was thrown into

jail. if they do a good job in egypt, i did not hear anything about the role of the very prominent institutions in egypt such as the syndicate that played an important role, very important, the judge's club that started the revolution in 1952. this is beside the point. so the share reinstitution used to come up with an extremely

important article. in 1929, very important paper that had been published in which he was able to show for the first time ever the elasticity of demand for e egyptian cotton. i had the honor myself of addressing the institution in egypt several times but they have been weakened because of the -- pollinization of the system. and the national democratic policy of imposing this in duquette -- the syndicate of

journalists that was weakened by the corrupt regime that imposed its own people and therefore they left the bad people driving good people out of circulation. this is only a comment. >> can you go back to the future? it is useful for the panel to try to answer that. to what extent can these institutions be revitalized and part of the transition process. let's move to the lady in green who had her hand up and waited patiently. >> i work for the institute for inclusive security and i have two questions. the first one. in the last couple weeks, the word about the referendum has shown the intellectuals. what do you think