just don't see it. and if that doesn't work it's got regulatory policies. you can imagine working with danny and friday may in a countercyclical wave. you could even imagine that the reserve requirements to sort out if one asset class looks inflated start mending institutions have reserve requirements based on not. not all of these are necessarily great ideas, but there's a rich set of tools out there to hit the various income targets. i think we need a higher -- we need to be less inflation focused. i mean, i know that we do higher inflation target. how do i know that? well, you know, i know it's too low. we are missing 2% by a mile. core inflation over the past year has been under 1%. someone mentioned in a previous panel that higher inflation would really help us dig out of

this overhang of debt they are operating under. one of my theories and it's not original. i heard it from someone else. one reason people buy buy housing is never a bad investment was all those people who bought houses in the 60s and 70s and had the value of their mortgage rates reduced by inflation. it was a great investment for generation of people come up with an housing was elation that eroded the value of their debt. i think that could be something the economy needs. i will say, you know, the debt overhang is really dangerous strain of going forward in the economy. we have a savings rate of under 6%. there's a reason why can't jump to 12% over the next couple years. we've had 12% in the past me of home prices falling again so wouldn't the a shock of people started saving and i'll put a serious drag on growth going forward. and i would just wrap a good point about fiscal policy. i would say that the fed does

have -- should be allowed to have an opinion on the side of the federal budget deficit. if you have huge increase in the deaths they will the private sector is taking on debt, that's probably about them. the fed should say that's a bad thing. similarly, if you got 9% unemployment and they are closing the deficit quickly the fed should say not good for growth. it's clear to me they should not have an opinion on the composition of fiscal policy. alan greenspan putting his stamp of approval on tax cuts in 2001 bad idea. and fed chairman did a lot as backing to people who are always trying to cut the insurance programs. ..

and i think joshed a great job of bringing that up in his talk. there's the actual act of safety and soundness provincial regulation. you know, how do you regulate so they're less likely to collapse in a very spectacular manner and john the great job explaining how the fed needs to change, the model didn't really have an active role for the financial sector, and part of this is a cultural bias and part is an academic and partisan composition by es. but a lot of work needs to be done and then a third, we need to have a means to clean up messes and i think that dennis talk of the resolution in a very powerful way. trying to figure not what the exact opposite of too big to fail is isn't a trivial task because it means we have to come up with ideas of what it means

for something to feel and how businesses fail as much as legal and values this question as anything else. even if you think the government should do nothing we still right bankruptcy law in this country and that has important implications for financial firms. a couple of the comments, i'm glad josh approached this topic in the way he did. in 2,093 seats sat open on the fomc and we worked with a couple outside groups to discuss should we put pressure or create a campaign getting certain people nominated to these spots and this even went into 2010. and various groups were like what would a good member of the federal reserve look like? we have an idea, we have theories of what strong liberals look like, supreme court, what do strong liberals look like in the treasury and anywhere, but when people asked us

specifically about the federal reserve, we didn't have an answer and, you know, like well, they care about unemployment. what does that mean? especially when it had to be as concrete as it is right now, is it qe four, five and six, so what do these look like in practice. and i think we are closer now to some answers for that. one question going to ask before it about the panelists is barney frank last week put out an amendment suggesting that the regional bank chiefs should not be allowed to vote and the fomc, that the stricter -- he didn't phrase it this way but i would argue the structure is a relic of the railroad period of banking in the late 19th century in so much as, you know, it was very important for someone from kansas city to tell people in d.c. with the economic conditions were in kansas city because there was barely kind of

information technology that we have now. now they are all looking at the same reports. the fomc would still be available to talk about their economic conditions. and when you approach it and say why do we have this probing comply is on an institution that is only about financial regulation would be like if we had labor unions on fomc which seems as relevant given the dual mandate. so if the panelists have comments about the composition of the federal reserve board? >> the good news is we are going to get a report on that because dodd-frank and one of the ways the alliance between ron paul and bernie sanders at all got killed in conference was to take many of the provisions they were pushing for and turn them into a couple studies and there were other things i don't want to denigrate too much of the one thing is they were required to

release information on the emergency lending program and the two other pieces have to happen before july 21st of 2011. one is an audit of the emergency lending programs in detail and i think that's going to get a lot of attention and it's going to be interesting who got what and how much of the other report coming out is going to be as important and hits this issue which is the gao is required to report on the government structure of the fed with particular emphasis and analysis on the real perceived potential conflicts of interest and this is exactly the issue which we have the fed and its evolved over time and we have not been actually very reflective about this over time because it seems to have served interests very well and the financial the institutions in this country have done an extremely good job of protecting the monopolization of the fed saw one of the reasons things don't come to mind is because the ultimate

pressure point or support for the alternate types of the fed has never gained traction and those that are promoted the most actually have extremely effective and intensely focused efforts to make sure nothing happens that the fed so when the reports come out and i fear they will come out the same time and the press is free to pay attention to the emergency landing and no attention to governance everybody here, anybody that cares about these issues read the report on the governments, no idea what it's going to say that's what we need to focus on. >> i don't have a specific recommendation but i definitely think that it's very timely to think about the government structure of the fed to address the regulatory and risk assessment issued. it's a pretty big board. they have long term and not much has been done to think about how to align that talent with the mandate and i think it is

appropriate to start over and think about what is the modern origins. >> i would be totally in favor of not allowing the regional bank presidents to be voting members and the question of replacing them that is a tougher one. for somebody that thinks the but too much inflation on little on unemployment it's hard to imagine what could be that much worse but it's also hard to imagine exactly a politically acceptable way to depict the members. and i want to say one other thing quickly, you know, this is we actually shouldn't let the obama administration off the hook too easily by acting like there's a structural problem. they look the vacancies sit for long time and i do not since a massive amount of urgency to fill them. so step one is filled the vacancies you have available and step two is worry about the long run issues. >> there's still a vacancy. >> locking the nobel prize winner has been unqualified.

analyst thomas p. lee took it in new york in the age of the mass austerity of budget cuts and budget freezes a great place to start a budget cut would be on the board which was too big and massive and long-term so let's get some questions from the audience and start with the front. wait for the microphone. >> i did some things intentionally inflammatory to joe. [laughter] >> i was on the first panel for the international economics and my question is for you, dennis. it's a comment and question. just what you, mike and josh just said, i totally think the key thing here is what do progressives want for the policy? and how can we make our voice heard point? because i can assure you there is a conservative and upholstery to view but what they want for the monetary policy, if they are the only one speaking they are the only ones being hurt and we

cannot overestimate the importance of that. my question is to joann. my first job was a with cra officer of the federal reserve bank of boston back in 1981. so my question to you, at that time it seems like the only leverage the community groups had to get all enforced is when one bank wanted to buy another mergers and acquisitions and actually saw -- was involved in a pretty impressive bank i can't say, i don't want to talk about which one from ancient history but was forced to make a commitment into supporting the local community that they wouldn't have done if not for the fact they were applying to buy another bank and you could deny the merger if you found that they weren't, you know, living up to the law. but it seems like that's gone away and no mergers are denied any way.

what is the build for leverage? do you see any scope that will return? what plans leverage are available? >> that's a great question. we've been talking to dave cra inflation but some of you know there's been quite a bit of deflationary recently. very recently the ratings are all going down and there is a lot of convergence of cra with fair lending issues and i am seeing cases where there is a combination of a community group protesting the cra performance and bringing the fair housing act compliant about redlining. i think the mix of tools is very powerful just as it has a bunch of cases at hand to look at those issues. so they are different because cra is without income and the others are about race and

ethnicity. but i think the agencies are planning to redouble their efforts. cra is very old and its logic and structure and it's done a terrible job of dealing with predatory lending and it ought to be resolved today. >> if you questions here to wait for the microphone. >> i'm with the naval postgraduate school and i'm not an economist, so why didn't understand a lot of the code words you were using. but it seems to me if you want to have people on the other side of the fed, people like me have to be educated and you have to figure out how to tell the narrative modeling and long sentences with code words, but visually because it is so complex in terms of the interconnectedness and the interdependence ease of this to

be quite honest if you can't do that, i don't see much change happening. and my specialty is basically behavioral change and i have been doing that with the defense department for 33 years and it takes a long time. but if you don't know the story, you don't know what to do. >> we can take one more question. >> matt to benjamin. this is for josh bivens. you and your colleague, dean baker, seemed to imply if they understood right making the fed less dependent and accountable to congress would make it stress employment more. couldn't the opposite who just as likely be the case? we just had an election where voters voted overwhelmingly for republicans. use a republicans have drafted bills in the senate and the house to change the mandate to subordinate employment to price stability.

so i'm wondering how you can make that assumption. >> one more question and then we will do a series. >> thanks everyone. to follow up on what would a progressive fomc member or monetary policy maker look like and i know or believe and i know like to talk about this on your blog i want to ask what are your thoughts and to some of uav george and might or all of you what are your thoughts on as a potential progress of monetary policy, and i apologize i wasn't here in the morning in the new york session, but there was an interesting idea that was thrown out by one of the financial blogs of a potential synthesis between the quote on quote left wing on stream and austrian school it could be a monetary policy synthesis as we saw with of the neoclassical in the 20th century and they have a lot more

in common with each other than it is commonly thought. and i was a little surprised i didn't hear anything about qe2 and i apologize if was brought up in the morning but it is very interesting and i don't know if it has been noticed and if i'm being redundant. if you look among progressives with joe stieglitz who was cenacle of qe2 as i saw in the video in the new york show you had a few weeks ago paul krugman on the other day to leave kuwait thinks that it's blase because it was only 600 assets and should be two or 3 trillion according to the tayler modeling analysis. so again even among progressive you see sestak lets patrons saying progress of economist, completely different. so one seems to flirt with them and one who does not. so, what are your thoughts on that? i would appreciate it. >> first point is we spend a lot of time writing about financial reform, and the complexity hides the problems and also creates an insight class of people who are

only qualified to talk about it in a conversational way, to be about express and it was a big problem for financial reforms and a will be a big problem here and we would love to talk to you about the ways we can change that. as for on unconventional monetary theory it certainly strikes me that we conventional theory has the tools we need to understand what's going on. there's a lot of stuff about the way the leverage works in an asset bubble. there is a lot of serious about the way deleveraging works, various models about the balance sheets and how me taking a write-down was selling to a fire sale in all this other stuff that you saw and you arguably see in the home foreclosure models there's nothing that the situation that makes me think that it's not been explained by the fact we're at a zero balance and the criticisms are all credibility criticisms that the fed is not actually able to

seriously commit to future inflation. you can think that's right or wrong, but there may be dangerous to bring outside the mainstream theory, but i certainly think the mainstream theory is not exhaust at this point. it has problems understanding how finance works of business cycle but that's not necessarily the problem we are at right now. the of >> i don't dillinger egoi with the question your first point was important which is with the progressives want for monetary policy. too often what we all think about is how we get the fed and others to pay more attention and you're exactly right. people understand how to focus but they may not understand how to get the fed the second thing

i want to respond to is the point about the code words, you know, part of the plum is that the high priest of finance essential uses latin as a defensive and offensive mechanism and it is meant to disempower and paralyzed those outside of the priesthood and it's one of the most important things anybody who cares about our economic system and finance system not to mention the taxpayer's wallet we have to address its one of the things the markets is working on and there's other groups working on. the problem in this forum is is essential the short period of time to talk about a bunch of subjects and it's difficult to do that the your 100% right people need to talk and planning which. we need to introduce the english-language to the finance industry and deal with pictures in ways people can understand including smart sophisticated people who feel like delivering

idiots when they start talking about the finance system and it's not that complex. it serves their interests and it serves everybody else. so it is a point we need to focus on tall times so thank you for bringing it up. >> can i just reinforce the point was made about the potential that when the political winds shift people might not be happy with a reconfiguration of the fed? i think it is well taken. it's in the category of the careful when you wish for because the fed has been designed to be insulated from politics and that's been partially successful and there is something to be set for maintaining a certain amount of that going forward. >> just quickly the point about being able to tell the narrative is incredibly important. i will make the excuse of part

of why i think it is a problem the progressive community can tell lots of the narrative is very well, like what do we do improve children's school performance and here are the things we must do. we don't have that at all for this issue and we better start having it and hopefully this is step one. if of a your right that is an excuse not an answer. for the fed will we be sorry if we give away, i'm going to say no, not really. i don't think they are well insulated from politics. i think they are locked in the room with inflation and they discuss among themselves there's politics and already that closed room and can only be good for unemployment if that's broken open and the current moment people talk about this i mean we have 9% unemployment, no inflation at all and all of the loud public voices are telling the fed to choke off the recovery and they are going to it. that's the reason they aren't being more aggressive because there's no push back from the

left and right think the waking up progressives to fear is a fight going on and it's time for you to join because it is happening right now and that outweighs any particular downside. i don't think they've been well insulated from politics i think they've just been at bearing the brunt of the one cited criticism. what a progressive molitor it was a member look like? there's a bunch of questions to to ask them to read the funniest when there's absolutely never allowed to ask any member of your estimated and you are never allowed to ask that, but it's the important question and then related to that how well can unemployment go if someone says its 8% them they aren't going to be a progressive member of the fomc. >> careful about that last -- >> that's why i tried to switch. [laughter] >> yes, just straightforward questions like how low can unemployment go and how do you test that? do you assume you know it and say we can never approached that

low level of unemployment or do we start probing and say no inflation right now, unemployment is some say 5% no inflation, let's see if we can go lower, with actually tested, let's not be sure we can go below its probing to see if we can get without setting off inflation so the full range of what is the estimate for what unemployment can go and how would you test the proposition i think are good things to do. the point about progressives not agreeing on qe2 i have nothing smart to add to that except i think it's a real problem. there's one thing in the short term we probably perhaps could have gotten progressives invested in it's really tough to do when a lot of your leading are not agreeing and they are smarter people than me in the debate so how to get everyone -- >> in addition to talking in plain english we have to talk about how we frame the debate and dreams of a better. josh referred to the voices from the left or silent. nine per cent unemployment equals how many? tens of millions of people in unemployment and out of the

workforce this isn't a left and right issue. this is about as mainstream middle-of-the-road as it gets. a financial crisis that by one study costs every single american roughly $100,000 over their lifetime and that is a conservative study. that isn't a left or a right issue and we shouldn't be pigeonholing those who care about these things as left. the left should care about it. i'm with them but mainstream should care about it and the left which is why there was when you saw some very odd alliances rot dodd-frank it wasn't just ron paul and dirty sanders. bernie sanders and and to control the fed essentially choked the fed might be six votes, 96 for 0. there was strategic voting and other reasons for that but that is a pretty broad swath of people when you have every single republican senator in the united states senate voting for the amendment, and i think there was probably the only time in his entire life that would have been. but many of these issues are core mainstream frankly many of

them right of center issues coming and we need to talk in english and broaden the base. we shouldn't pigeonhole ourselves or these issues and things we care about. we should take and go right at them at mainstream issues we should talk in english and defend and promote. >> taking the topic may be slightly further than the narrative point which is a great point. but the other thing we need to be doing is educating the public on financial literacy. and it's not just the fed. people the won't even understand their credit card and the mortgage, and we do nothing about that. the only financial literacy we have offered is easier for people who were already in trouble and have to go through it or for the few small group of people interested which most people are not, and one of my arguments has been the customer centric in the approach you're taking and include as one of the

customer segments to think about young people. if we start educating a generation of young people as a technology told today, 20 years from now we would be having a whole different kind of conversation about these topics. >> thank you very much everyone for making it and again to the new america and the institute for sponsoring this. have a good afternoon. [applause] [inaudible conversations]

federal communications chairman newton minow says he has a ipad and smart phone and is optimistic. speaking to the national press club in washington, d.c., the former chairman was joined by kind chairman julius genachowski in honor of the 50th anniversary of the historic addressed the national association of broadcasters where he declared television a vast wasteland. the chairman talked about the impact of the speech -- >> welcome to the national press club. estimate this is an hour and 20 minutes. >> the bureau chief of the houston chronicle and in my extracurricular life president of the national press club's educational charitable new york national journalism library of

the national press club, and our role of the library is to provide the cutting edge journalism training to discuss the most important issues facing our business today, and there are a lot of them, and to teach and promote a fixed and journalism and we are very pleased to be george washington university's partner tonight in this outstanding program. i'd like to thank chairman genachowski and norton minow for taking part and for one of the most loyal users of the facility of the press club and the work space for all that she has gone to make this program possible and i'd like to acknowledge the president -- this is the first time the three sisters have been together to celebrate mother's day since 1970. i'd also like to acknowledge press club president of the associated press who is here and

who has been doing an outstanding job this year in his work on behalf the free press and journalistic excellence. and now finally i would like to turn the microphone over to a friend of mine and a great friend of the american journalism, michael freedman, professor and director of the george washington university global media institute. mike? [applause] em >> good evening. thank you. our gw media institute affiliated with our george washington university school of media and public affairs explores the evolving roles and responsibilities of the media in our society. what better way to engage in that mission than with tonight's program which actually began to take for exactly 50 years ago.

in 1961, what a year. on january 20, john f. kennedy sworn in as president and delivers a memorable inaugural address highlighted by the call to service. ask not what your country can do for you, ask what you can do for your country. on may 5th, alan shepard becomes the first american in space. roger maris of the new york yankees ranks of a brute's, a record with ricky mandel behind. on august 4, 1961, 18-year-old anne dunham this birth to her first child and december of obama. pledge your lies to the comprises a warning to leave for to kill a mockingbird and in 1961 the tony award for best actor in a musical was won by richard burton for his portrayal of king arthur in the musical camelot. for many of us in this room, that play and its title song

stirred memories of a magical time in america come a time when the torch was passed to a new generation, when all idealism became reality. as the wonderful place closes a sad but why is king arthur unites a young boy and tells him to pass on the story of camelot to future generations. these words, we are told, were president kennedy's favorite lines of the play. don't let it be forgotten, that once there was a spot for one brief shining moment that was known as camelot. this evening we have the rare opportunity to welcome one of the minds of the borut table newton minow and pass on the story of the generations of one shining moment in the history of american media. a moment that occurred 50 years ago today when a young chairman of the federal communications commission spoke of the potential of television and the

responsibility of broadcasters to serve in the public interest. tonight the torture is symbolically passed from the legendary newton minow to the chairman julius genachowski and to all of us lucky enough to be in this room as well as those watching live on c-span and listening not only on television but computer and mobile devices. it's going to be a night to remember. to introduce the moderator for the evening, one of the truly gifted journalists of his generation, the former vice president and washington bureau chief of cnn, now a professor and director of the school of media and public affairs at the george washington university, my friend and colleague, frank sesno. [applause] >> thank you very much, mike and is ready for being here. i am still looking forward to this conversation, because it is what we think and talk and

research and teach and preach about every day at the george washington university school of media public affairs with our students who are going to be planning and conducting their careers that they are here 50 years from now. that is a thought. [laughter] what is the public interest? how are we serving it? how will be connecting them with the world and information are around them? where does entertainment leave off and titillation and pick up? what is the role of the ratings and circulation in the bottom line in the great equation of the media and communications? what have our digital smart phones and other devices done to our attention span, to the information we are consuming and the way we can act with one another to the revolutions that take place around the world? what is the great responsibility of the government and those who organize it in making this information make sense and be

responsible? , it is my pleasure to introduce someone who will introduce someone. i introduced a man with a great deal of influence and a 24/7 visual headache. the chairman of the fcc. but first a word from our sponsor, the fcc. the federal communications commission was established by the communications act of 1934 as a successor to the federal radio commission if. its job is to regulate all lawn federal government use of the spectrum which includes, by the way, riegle and television broadcasting and all interstate telecommunications, warrior, satellite, cable, i got this about right. as well as international communications that originate or terminate in the united states. literally this fcc touches on every aspect of our communications life. so, the next time you see

someone crossing the street textiles and or driving a car talking or lost on their smart phone surfing or glued to their ipad watching, to let to the fcc and to the chairman, julius genachowski. [applause] >> frank, thank you. and thank you to the host, the national press club national journalism library, george washington universal global institute, thank you all for coming. we have many distinguished guests here today, none more so than newton minow's remarkable family. the minow's for a file on national resources they usually not allowed in the same place at the same time. [laughter] but for this we have made an

exception. his incredible wife, joan, is here, and we are joined by newt's brilliant and a dynamic daughters, mary, a leading expert in library law, mill, a leader in corporate governance, and the movie mom, and martha, the dean of harvard law school, my professor, mentor and friend. the minow and daughters are like the charlie's angels of u.s. jurisprudence and i hope i'm not struck by lightning for invoking an aaron spelling production to describe the minow's. the truth is for newt minow i'm sure he would save raising his three daughters with the show is his greatest accomplishment. this is a special day. and i am truly honored to introduce newt minow on this historic occasion. newt minow set a standard for excellence that in spite years and guides us at the fcc a half

century later. newt minnow was 34 in 1961 when president kennedy appointed him as the fcc's 14th chairman of the youngest, in the agency history. there had been 27 total fcc chairs much more successful than newt minnow. as the chairman shifted and improved the communications landscape in so many important ways bringing uhf reception to all tvs, recognizing the opportunities of the paid tv promoting and of the development of public broadcasting, and as virginia sit in "the new york times" this morning, newt minnow provoked so much of the television that emerged in the television after the sesame street to 60 minutes. less well-known, but powerfully important, newt minnow also paved the way for communications satellite. on this, too, we had a

conviction the was visionary. true story. i'm going to tell this one so you can't. [laughter] newt minnow once told president kennedy that putting communications satellite in space was more important than putting a man on the moon. he told president kennedy that was more important than putting a man on the moon because, quote, satellites allows ideas to be sent into space and ideas last longer than that. his time was just one chapter in a remarkable american light. born in milwaukee, newt minnow enlisted to fight in world war ii when he was 17. his mother pleaded for him to wait until he was drafted. he replied what will i tell my grandchildren. after the fcc service he moved to chicago and became a leader in the community with a particularly knack for spotting

talent and so of course he introduced the future president and future first lady. it was one of his many post fcc accomplishments as the chairman of the board of pbs, he held to grow public broadcasting into a service that exemplified tv potential. as president of the carnegie corporation who helped get the original funding for sesame street. as chairman of the commission on presidential debates he is recognized as the father of those debates first opposing the a media in 1955 and helping keep them alive to this day. and the mysterious title and i welcome the investor from singapore here tonight. thank you for coming. the amazing things he's done and the time that has elapsed since he was at the fcc, newt minnow still can't escape the speech and there is no need to because newt minnow's speech on may 9,

1961 is as relevant today as it was 50 years ago despite the revolutions and technology that have occurred since 1961, and despite the dramatic shift in the way that we receive in exchange content and information , the principles and values and newt minnow's famous speech in door. keep in mind 1961 assault was a period a tremendous change. ninth, 1961 as we heard a couple of months after john f. kennedy was inaugurated america's new president propelled into office by the power of a new technology called television. only four days before the speech, alan shepard had become the first american in space and to the scene stood to 35-year-old chairman barely on the job and the speech was his first public speech as chairman. of course the speech began one of the most important speeches in the history of communications is not beyond with the most

memorable description of tv as a vast wasteland. resonated across the country not just because the catchy phrase but he articulated what a lot of people were thinking and offered the promise of a better future. his challenge to broadcasters to do better and his optimism and division for harnessing the power of television technology inspired people throughout the nation. also you don't have to take my word for this, we dug into the archives of the fcc to get a sense of what people thought of the speech he delivered it. with help from the volunteers of the national archives, we learned more than 4,000 people wrote to the chairman in the months following the speech with the overwhelming majority writing to see the chairman's leadership was refreshing and gave them hope and an episcopal

minister wrote your superb speech yesterday is in many ways the most encouraging note yet sounded even in the new administration full of encouragement. an executive wrote i haven't felt so encouraged about the country since the days when fdr was making speeches. a woman from westwood new jersey wrote where have you been all these years? together with the national archives we have created the compilation of these letters and after my remarks i would like to present his collection to you as a gift from the fcc on this note the location. i have the right here. now, no question, the speech was a big deal. but we don't celebrate the speech today just because it got a lot of attention. we celebrate the speech because of its enduring message. newt minnow's speech was that just a speech about a point in time to read it was a speech for

all of time. it wasn't just about a particular communication technology it was a speech about all communication technology. the speech recognizes throughout the power of communications technology in the speech spoke of the technological knowledge and i'm quoting that makes it possible as president kennedy said not only to destroy the world but to destroy property around the world. the speech expressly imagines the future were broadcasting and communications technology will tie together in vienna and india, chicago and the congo. cnn hadn't been invented but between the lines in this feature can see a vision of broadcast and cable networks providing programming and the connections, education and information of all the world. you can see the vision between the lines of the speech of the services like twitter and

facebook and search engines and mobile phones helping connect and empower people and helping open closed societies. what newt minnow said in 1961 applies to all of those involved in today's communications technologies. you must, quote, serve the people and the cause of freedom. he must help prepare a generation per great decisions. you must help a great nation wolfowitz future. i see the strictest of lines between newt minnow's 1961 speech and his recent article in the land in which he wrote the next 50 years will see even more technological miracles including the marriage of computers, televisions, telephone the end of the internet but we need to accompany the changes are critical traces of the value we want to build into our 21st century communications system and the public policy to support

them. he said 50 years ago, he said last month and it bares repeating. we need to harness the power of technology for the benefit of all people to advance the cause of freedom at home and around the world to help our children fulfill their future and help our great nation fulfill its future. we need to harness communication to provide a burton v, grow the economy, improve education, health care, public safety, promote civic engagement and strengthen our democracy. what better agenda could there be for the fcc today and who better to articulate them newt minnow. you continue to inspire us every day, and we know you're just getting started. if i can refer to a more of the letters sent to you at the fcc in 1961 and i quote, good luck, godspeed and go get them.

please join me in honoring newt minnow. [applause] [applause] >> thank you. i remember one letter myself what time does the vast graceland guilaume? [laughter] -- vast wasteland go on? >> i'm touched by what you said. the work country is blessed with

having you get that job. and much, much tougher job than i had because now you have so many new with the internet and with everything that is happening in this exploding. but i know no job in the government that has a more intimate connection everyday, every hour with every person in america. whether you are making a phone call, listening to the radio, whether you are watching television, accessing your computer to the internet, what ever. it is the fcc that is dealing there to protect the public interest. we have a fortune of a point and having julius now. i thought i would tell you a moment or two what happened the day before that speech.

najaf, 1961, not long after the disappointment at the the of pigs, but a few days earlier, alan shepard had been sent into space to we were behind the russians, there was a great pressure for us to do something in space and we succeeded. and alan shepard arrived at the 04 law office at the president may eighth and president kennedy invited me to meet him that morning to accompany him when he gave a speech at the national association of broadcasters. i was waiting outside the oval office when the president cannot and said what about taking the shepherds with us? i'm going to take them to congress and he took them to the convention. i said there would be wonderful he said let me arrange it. he went in the office, came out

and said okay it's arranged no come with me i want to change my shirt. he took me upstairs to the living quarters of the white house, proceeded to change his shirt and even though i knew the president before i was intimidated and he said what do you think i should say to the broadcasters and i mumbled kind of scared by said mr. president, you ought to compare the way we do space shots and the way the russians to. the russians do it in secret. you never know whether it was a success or villere. we invite radio and television to cover our spaceshot not knowing what will happen. we want the press there and every body to share that experience. the president didn't say that's good, that's bad, anything.

finished changing his shirt, we went downstairs, and at this point i was introduced and the vice president johnson was in the oval office and we all walked out to get in the car and i thought to myself i better get in the second part because we've but the president commander shipper, mrs. shepherd, vice president, he says no, no, you take one of the seats and we will take the other jump seat. so we are driving through the park to what was then chariton and the president was in a very a brilliant move because this had been such a success, he slapped linden, back and said you are the chairman of the national space council but nobody knows it.

he said if this had been a failure if i would have seen to it that everybody would know. [laughter] so a kind of laughed and i couldn't help myself. i should have shut up but i didn't. i turned and i said mr. president of the space shot had been a failure, but vice president would have been the next best cannot. [laughter] the vice president didn't think that was very funny. [laughter] we got to the hotel, the president walked up to the podium, a very graceful, thoughtful, witty charming talk about the difference between the way we handled space shots and the way the russians and let. it's a perfect talk and the

audience was extremely pleased with it and gave him a standing ovation. the president left with the shepherds to go to congress. the next day i returned to give my speech and i can only say the broadcasters wished i had changed my shirt. when the speech ended, i was standing at the podium. the president of the national association former governor of florida a man came up and said mr. minow, i didn't like your speech very much. i said thank you. five minutes later he came back and he said the more i thought about it, i think i was a pretty poor and lousy speech. [laughter] five minutes later he came back and the third time he said

thinking it over that is probably the worst speech i heard in my life. and he put his arm around me and said don't pay any attention to him. he just repeats everything that he hears. [laughter] [applause] >> we are just getting warmed up. >> well, we're going to do is talk a little bit about the speech. the impact that it had, the connections of the day. take us for a minute back to that 35 year old guide, what was so pressing, was so motivating

he would stand up and give this well-received speech 50 years ago today. >> the context of the time was pretty much forgotten. there had been some serious scandals in the radio, serious scandals with television, serious scandals with the fcc where president eisenhower had been forced to fire the fcc chairman. so the place was regarded very poorly and i also felt we needed to impress on broadcasters this a great gift, this precious gift to use the public airwaves in exclusive license given to them with no charge for nothing that

in exchange for that the public service we provide as well, and i thought that message needed to be made loud and clear and that's why i did it. >> welcome a loud and clear it was and it is. so you went there to advise the broadcasters to serve the public interest. we have a clip of that speech that i would like to play. i would like you all to close your eyes and imagine that you, are there 50 years ago today the national association of broadcasters and these network presidents were a power source to be reckoned with. they had this exploding new technology, this incredible reach, and this 35-year-old chairman of the fcc gets up and says this, you have the clip? >> when a television is a good nothing, not the theater, not the magazines or newspapers, nothing is better.

but when the television as bad, nothing is worse. i initch tdown in front of your own television set when your station goes on the air and stay there for a day. without a book, without a magazine, without a news paper, keep your eyes glued to the sec until the station signs off. i can assure you what you will observe is a vast wasteland. >> now undergoing to say initially in the first draft it said a vast wasteland of junk. [laughter] why the other? >> well, it seemed to me an improvement had been made of jongh and ip very little attention to those words. our general counsel who was

there tonight kept telling me to take those two words out. >> junk or vast wasteland? >> vast wasteland. i thought to have little class. [laughter] but the two words i wanted to be remembered or not vast wasteland, the words i wanted to be remembered were public interest. islamic and was the vast wasteland sound bites, which it wasn't called a sound bite at that time with those two words, were those the words that built the way? >> i think the press learned later the press likes to fasten on to something controversial. >> what ever gives you that idea? [laughter] >> they saw this as a

controversial thing. what i wanted was a debate and certainly the started. >> would you do a similar thing today? >> the world has changed. i wouldn't say that the fcc has been staying out of fights, and you know what i think what newt minnow did as an inspiration. the issues are different but they are important, and it's our job that the agency to shape a public debate and make sure the policies are the right ones. in many ways what newt minnow did is the single most successful use in the bully pulpit and certainly the history of communications and maybe the country. ..

and regret very much was to enforce a limit on commercials. the broadcasters themselves had a code of ethics, which included a limit on commercial time. it was not enforced fully and i tried to get -- i said to the broadcasters -- broadcasters we'll we will take your own

code. issuers. we will enforce it. i couldn't get that through and i regret it. it seems to me that other countries have very sharp limits on the amount of commercials. angwin for example in commercial television, commercials are never allowed to interrupt the continuity of the program. we should've done the same thing in this country. >> what do you think of television today? >> well, i happen to be a television junkie. i am watching television all the time. >> what do you watch? >> i am a big fan of cnn. i am a news junkie so at the time i gave a speech network news on television was 15 minutes, 15 minutes. it wasn't even on seven days a week. >> the "cbs evening news" with douglas edwards. >> that's right and so what i wanted to do was to expand

choice for the viewer. we did that i opening up uhf television. i did it here in this room and incidentally speaking of this room, my wife's dearest friend from childhood and college was "the new york times" correspondent and was forced as a woman to stand in the balcony, not even a chair, because women were relegated to the balcony. >> can i tell you something? we have more women than men today in our journalism program. [applause] >> things that change. nan wrote a book called the girls in the balcony, which exposed that. but everything has changed today and what i like about today is that if you are a sports junkie, you have got plenty of sports and you have channels for sports. if you are an old movie junkie, you have channels for old

movies. if you are a news junkie you have got news programs and if you like -- no matter what your interest is, today you can find a channel to deal with a. >> so you don't think it is a vast wasteland? been no, i think today what i like about today is the range of choice. what julius has to deal with as much tougher, much tougher and that is what do you do with the internet? which is now, most kids are spending more time with the computer than they are with television. >> many are watching television over the internet not even aware that they are watching that work television show because they are seeing it over the top. >> the world has changed but the core issues are really the same. i was rereading the speech and it was interesting the way that you spoke about broadcast tv in 1961 having gone greatly from

being born to the teenage years that have grown so much and it was behaving a little bit like a teenager. and, you spoke in this speech about the opportunities, all the good that new technology can bring in also what we have to worry about and that it seems to me has been true as every advance in communications technology sense, first cable and satellite tv and now the internet and mobile phones, extraordinary opportunities to bring benefits to the public, to serve the public interest, economic opportunities, education, improving health care, reviving a library of information for people across the country and across the world. you mentioned distracted drivin, privacy etc. and what inspires

me when i think back in 1961 was to focus on the opportunities of new communications technology and also to be realistic about the downsides and the dangers and do everything possible in this job to help steer the country toward seizing and maximizing the opportunities and also addressing the dangers. >> let me take you back again to the speech and ask you this. edward r. moreau, the famous edward r. morrow just a few years before your speech lost his job over a speech he gave and in that, he talked about the great power that television should have, the great power it could have be said to teach that can illuminate and yes he said it can even inspire you can only do so to the extent that humans are determined to use it to those ends. otherwise it is merely wires and lights in a box.

he said this weapon of television because it could be a weapon in the battle to be flawed against ignorance and intolerance. this weapon could be used. did that speech influence you in your speech and your thoughts? >> that night that i gave this speech edward r. morrow called me at home. edward r. murrow at that time was head of the united states information agency appointed by president kennedy including the voice of america and everything we were doing. he called me at home and he said newt, you stole my speech. [laughter] and i said what do you mean? and he said, don't you remember the speech i gave he said in your hometown in chicano two years ago? i have to confess i was ignorant. i didn't know about his speech. he gave a speech to the radio television news directors at

their annual convention meeting in chicago and he gave that marvelous "back, i read the speech and i said to myself and i called edward r. murrell back and i said if i had thought about that speech i would have quoted it and it fact line that frank just read would have been the end of the speech about lights and wires in a box. edward r. murrow gave that speech an58and 58 and as a resut destroyed his relationship really with the brass at cbs. >> what happened after you gave your speech? what was the reaction how did the world change? >> for a while, there was an improvement in one area i was particularly interested in and that was programs for children. all the networks really set about doing that. the other thing, and i said in the speech that there was not we

called it educational television at that time, not public television. i said if there's not an educational television system in the country it will not be the fall of the fcc and we really set to work on that. at that time there was not an educational station in new york or washington or los angeles. think of that. i went to the fcc from chicago where we had such a station. president kennedy went to the white house from boston where there was such a station. it was astonishing to me to find that the major cities in our country didn't have a station that we succeeded in getting that done. washington, chicago and los angeles and that builds what is now pbs. i think that it's been a very important change. >> so let me ask you then because you also headed pbs, we are having a roaring debate now

about the role of public broadcasting in this country, but whether taxpayers should fund it, but whether public webcasting is too biased, too liberal, whether it is necessary given this rate, vast land of television stations. [laughter] what is your position on that today? >> my position is very clear that they should never be a partisan issue. the people who really supported public broadcasting in the beginning were republicans. i have to tell you a story about senator goldwater if i can. dean burch who later became chairman of the fcc, was a very active republican. he was chairman of senator goldwater's campaign in 1964. he was chairman of the republican national committee and he and i became friends and we served on a the bipartisan commission together.

when president nixon was elected, dean called me. he was then a lawyer in tucson. he said, i need some advice and i think that just made a mistake. i said, what? he said president-elect nixon called me and asked me to be chairman of the fcc and i said no. i say, why did you say no? he said i had a successful law practice and the kids are in school in tucson. i said you are making a terrible error. i said this is an extraordinary opportunity for public service. call them back and tell them immediately able to it before you get somebody else. so he took the job. he was there a few months and he called me and he said okay bigshot, you talked me into this. i need some ideas. the next time you are in washington stop by and see me, which i did and i was in new

york for the meeting of what was then called nat, now pbs. the women presented what would become sesame street. i was not put out by it so i told the nevada. he said what did she look like? aconda described her and he said ganz, does the name ganz mean anything to you? i said ian she was introduced joan ganz cooley it. ganz must have been her maiden name and kuni was her married name. he said he won't believe this, i asked her to marry me. [laughter] when we went to the university of arizona together, where she? so i put him in touch and he said how can i help you? she said well i'm having trouble she said i've got foundation funny -- money from the carnegie foundation and dr. hamburg is here tonight but i don't have enough money to take it national and i applied to h. a gw, now

hhs and the secretary bair, caspar weinberger, turned me down. he said well i think i can help you with that, because senator goldwater has weinberger's budget. [laughter] he says you come down to washington and i will take you to see senator goldwater. he took her to see senator goldwater and goldwater looked at her and said, ganz cooney. are you from arizona? she said, yes. are you related to harry ganz? she said he is my uncle. he threw his arms around her and he said, harry ganz gave me my first contribution when i first ran for office. what can i do for you? [laughter] >> it is just amazing how much washington has change. [laughter] >> senator goldwater picked up the phone and said to joan finney, we have got your money.

that is how sesame street when national. that was senator goldwater. why are the republicans today, it baffles me, because public broadcasting should be totally nonpolitical. >> berra bozen julius i want you to jump into this too because if we are going to have a fire we might as well all go into it but there are those today who say precisely because there are so many channels, there is even more need for public funding and public broadcasting. other say no way. you have got a "national geographic." you have got number, you have got a cartoon channel. you don't need it. make the case and news, go first for if you think where public right cast belongs today? >> when commercial television does a good series like sesame street emma commercial television does anything like the later our -- blair news our

i will listen to that argument but before that happens i don't think it is about that. [applause] what i would answer that with if educational content and pro-cramming for where kids are, for where the audience is today and there is a lot of interesting work going on with pbs to think about on a mobile device. what is the content, what is the programming that will educate, motivate kids on that. sesame street workshop is doing really interesting work. the same question if they were doing it who else would he doing at? >> so you joined nuke minow and saying there should be continued and i would ask expanded funding

for public broadcasting? >> i hear similar points when i travel around the country. local communities around the country where public broadcasting is making a positive difference, what you hear from people in the community on a bipartisan basis is this is adding value. >> why do we have public libraries? we have got bookstores. [applause] why do we have public parks? we have got country clubs. i don't understand the argument that other countries, every other civilized country has a public broadcasting system. >> why is it so hard to make his case to the american public? it seems to resonate at the national press club but in terms of getting that through, many would say this is not someplace america should be spending time.

>> i've given a lot of time to data and i think i have figured out the answer. public broadcasting began in england before commercial broadcasting. public broadcasting began in japan before commercial broadcasting. public broadcasting began across europe before commercial broadcasting. we did it as an afterthought. we didn't think about it at the beginning. in fact, when you think about it, the word television, the word television did not appear in the statute until years after television began. there was no big debate. there was very little attention paid to it. >> said in your speech clearly at the heart of the fcc's authority lies its power to license, to renew or fail to renew or to revoke the license. how much power, how much of that power did you use as fcc chairman?

>> we used it in the most interesting story. a station in jackson, mississippi witch, and this is eleanor roosevelt who called me and said why haven't you answered reverend smith's complaint with the fcc? and i said i am sorry don't know anything about it. tell me about it. she said reverend smith is a black minister in jackson, mississippi, running in the democratic primary for congress and he can't get on television. >> he can't get on television. >> goes to the television station with a check to buy time and they said come back next week and they said come back next week and come back next week and the election is now next week. i checked with the fcc and sure enough down somewhere in the

agency is the letter from reverend smith, from a man named aaron henry, aaron henry and he was telling a story, so we -- in those days we sent telegrams. this was before e-mails, and said explains why it is in the public interest to have no time for candidates, and they came back and they said well, the incumbent, john bell williams, is not buying any time. and therefore, we are treating him equally. and i thought to myself, this is an outrage. so, i called the station and their lawyer came into see me that afternoon. i said, what are you going to do about this? they said we are going to put him on the air. i said when? he will be on tomorrow. he was on tomorrow and lost the

election but it was the first time a black man had been on television as a candidate. i left the fcc and the station persisted in that kind of stuff, and finally the fcc took away the license. i had forget and -- forgot all this time and at the democratic convention in, let see, it was in the late '90s, i was invited to a brick list with the mississippi delegation and a man came up to me and he said minow, men now are you the one that was chairman of the fcc? i said yes. he said you know who i am? i am aaron henry and i said i am terribly sorry mr. henry i don't know who you are. he said you don't remember the letters i was sending you when i was referenced in this campaign manager? i said, i'm sorry. he said i'm the guy that called

mrs. roosevelt. i said what do you do now? he said what do i do now? you don't know what i do now? i said, no. what do you do now? he said i'm the chairman of the station. [laughter] [applause] they challenge the license and the fcc took the license away from the people who had it and gave it to the black group. they have got it today. >> that is an amazing and great story, and i want to ask the current chair, chairman of the fcc, do you have that kind of power? and do you have that kind of power to regulate and to oversee and to monitor the principle means of communication that our children are on all the time, the internet, that seems like a vast scary land? too many parents who faces with

their kids. >> let me say something about the internet and let me say something about spectrum. the internet is just a set of issues. it is not a scarce asset that is being divided among a small group of people where licenses are being distributed for free in exchange for some commitment. it is a vast -- i'm not going to try to do what 12 other fcc people i've done that the issues are different. i believe the most important issues on the internet are keeping it free and open for speakers, for innovators and that is something we have been focused on and that we have made real progress on. i want to say something about spectrum.

the word has come to recognize what was spoken about in 1961 which was the incredible value of the scarce resource. and we talked about this before. you remember the speech obviously from broadcasting and minow's time at the fcc for what he said and did around broadcasting but in some ways, the legacy around satellite and exploring other uses of the spectrum, we experience every day in our mobile phones, mobile internet access, ipad. we have a set of challenges today around making sure that this public resource is being used in the way that maximizes the public interest. and, in particular making sure that spectrum for wireless

broadband is available broadly or the demand from all of our devices is outstripping supply so that is another issue that we are spending considerable time on today that is incredible. >> take away spectrum three voluntary auction through the broadcaster's. >> it is ironic in some respects. what made minow did and and and getting uhf going, creating more choice, was visionary. overtime as cable technology hit the market and satellite that landscape has changed and as i said before one of the things that gets less attention is that newt was one of the first people to say we need to nurture other uses of technologies like pay tv, to expand choice. eventually that worked. it change the landscape. we only watching over the air

broadcast television. my kids don't know the difference between broadcast and cable in effect are most people, the tv that is watched is cable and satellite, not over the air. so you end up in a situation like we have in new york where there are 20 powered tv stations some providing incredible important service, local views, local information but it is a small fraction that are doing it in new york and we need to find a way to reallocate spectrum to the areas where we are seeing incredible demand. >> , it do we need a fairness doctrine today? >> this is what i was saying. julius has got, pardon the word vastly, more complicated job than i had. when i was at the fcc, phonecalls went via wire.

broadcasting went through the air. today, most people are making their telephone calls through the air and most people are receiving their television via wire. it is a total technological switch in 50 years. and, with that comes terribly complex problems. the biggest issue and julius and his colleagues have managed, is to keep the internet open so that everybody has access to it. and that is, that is what really is important and is working. >> i started to ask a moment ago about the fairness doctrine and i will come back to that but i want to to follow this for a minute. if you were at the fcc today and you are asked to give this great visionary speech today, clearly you would talk about the internet. what would your warning be?

>> it is a very dangerous thing for government to be in at all in content. if you believe in the first amendment which is really the guts of our country, if you believe in that he don't want the government in any way interfering in what people can see and what people can hear and what people can read. so, this is the one medium of expression where the government, unlike newspapers where the government has a role. so i think the answer to that is to expand the number of people presenting choices. i think that is the answer. >> what do you mean? more channels? on line? >> that's right and i gave a speech here in this room in 1962 this speech is not remembered at all. in many ways it was a more

important speech then the speech in 61. which i had a big map and i showed what would happen if we had more channels. and, my feeling was that the more channels there were, the more choices there were. that would be the best thing the government could do. >> let me challenge you with little bit on that in pushback, k.? so we have all these channels now and what you have is a lot of folks out there saying we don't take -- news for example. you have more cable noise than cable news. you have more opinion than you have reporting. you have more talk than you have actual newsgathering's. it is all very nice to say we have got all these channels but when you get right down to it in terms of the ability of the public to access information, there is a lot less there than meets the eye. a do you agree with it and b do you agree with it if you do? >> i do agree with that because unfortunately news loves

controversy. the first thing i will do is find an argument and we will all be there. i remember i was appointed by the first president bush to a commission right after the first iraq war about whether women should serve in military combat. our meetings were open to the press. as soon as there was a break, the television guys were rushed to the extremist. the people in the middle who were looking for some kind of a consensus were never even asked the question. they weren't interested in that. that was not news. that it is what i really object to. i think unfortunately today, the one thing that was good about having few channels was it was a common shared experience for the

whole country. >> we don't have much of a common experience. >> we don't have it. once in a while we have in the super bowl and we have it in the presidential debates. we have and and a think with the news right now about what happened with osama bin laden but very seldom. most of the time there used to be one television set in the house and the whole family was watching the same program at the same time. >> but usc fcc chairman could essentially threaten these executives. >> i would say in courage. [laughter] >> the i am a media guide. [laughter] but you could encourage or whatever you want to call it and it did provoke action. it is fascinating but after your speech was really the great explosion of network documentary's. >> that is true. >> there was an incredible number of shows and network white papers. none of those networks have the documentary unit today. >> they are all gone.

but that is true. >> so what can be done if anything today or is it just a quaint notion that the fcc or anybody has any influence in this field now? >> we are in a time of real transition when it comes to news reporting. newspapers have literally gone out of his this in the last few years. the pressure on some local broadcasters particularly in the economy are real and a world of more fragmentation and downward pressure on advertising. at the same time the internet is offering a huge new set of opportunities. new innovators including in the news space. better business models. when you look at the space and we have been looking at the space at the fcc. the area of greatest concern that we hear is local news reporting.

national news, a lot of reporters, international probably but local news reporting information, there are real challenges. their innovators in a lot of local communities trying to build news organizations on the internet. some of the questions are what are the ways that that can be supported? what are the barriers? >> so what can you do? what can the fcc do to support, in courage, threaten? >> i don't know. i'm not sure this is an occasion for threatening. >> i am sure. >> encouraging is probably more the word, but there are-somethings we are doing that will create new opportunities for local reporting. for example, accelerating government data going on line

locally. accelerating more transparency, more on line video, more local government in the public would create new opportunities for local information, local news, local content in a different way in a different cost model. these are the kinds of things that we are exploring. we all share an interest in seeing this succeed because informed citizenry and this is what minow taught us, is essential for democracy. local information, national information, a big broad debate based on choice, central critical for our democracy and we need to find a way to make sure those opportunities exist in a future. >> sew, knit, do you have a smartphone? >> yes. >> do you have a tablet? >> guest.

>> do you live on line? do you tweet? >> no. >> do you have a facebook page? >> no. >> my children and my grandchildren are teaching me how to use my phone, how to use my ipac. i'm learning more all the time and i am a slow lerner, but i recognize the extraordinary importance of this. i know there is a revolution. >> it is a revolution. >> it is a revolution and i think a very good one and i think that as technology continues to advance, we will have a better informed community. >> can you see a day when there is no network news, nightly news? can you see a day when the television, everything just merges onto the tablet and it is just all a transmedia experience as we call it, one thing leading into the next?

>> i think what is going to happen is that the interest -- i would be interested in julia' view on this. i think what is going to happen are the computer in the television are going to get married. they are in the process of doing that now. >> e.u. no, i think i agree with that. if newspapers think they are in the paper business, distributing their content only on something that is delivered to your home every morning it is not a model that is going to succeed. >> nobody really thinks that. >> so i think that news providers, whether it is newspapers, local broadcast stations think of themselves as multiplatform providers, reaching people where they are, experimenting with business models that support a vibrant

newsroom. that is the future that i think is possible that we have to strive for and identify the best ways to get there. so our kids are going to be consuming news in very different ways than we did, and very different business models, very different technologies, multiple screens and multiple platforms. at the end of the day there have to be interest models that support the basic really important work that reporters d, gathering information. i am a cautious optimist about where this will go. looking at smartphones, looking at tablets, looking at computers and all the different screens from the living room to what you have in your pocket. we are not there yet and we are in a difficult transition. >> i'm afraid to my wife's chagrin i am learning too. , the last question, sort of a personal question.

sort of an office politics question. you seem to have a knack not only of making predictive speeches but of having predictive relationships. you knew barack obama when he was a young man and if i'm not mistaken michelle and barack met at your law firm. >> whenever i see the president, he says thank you for introducing me to michelle. and i say, i did not introduce you to michelle. he says the i that if i hadn't been a tier firm i would not have met her. that part of it is true. my daughter martha was julius' and barack's professor at havard law school, and she has only called me up out one student and 31 years and that was barack at the end. [laughter] >> that was the wind up in the pitch. we were waiting. >> what did she say about barack?

>> she said i've got one student -- i know you aren't hiring first-year students but i have one who wants to go chicago [laughter] who is so extraordinary that you should make an exception. >> gave this speech we work quoting 50 years ago and you got this thing once. anybody else who wants to watch here? [laughter] i think this has been an extraordinary conversation with a prescient, articulate, eloquent -- [laughter] you are the kind of public servant that we should all celebrate and we do, so we are going to go to audience questions now but before we do, nudes i want to thank you again and julius thank you oath. [applause] now, if you have got a question that you would like to direct to

newton or julius genachowski we have microphones set up and i would invite you to head to a microphone if you have a question. what it should head over to the mic there if you wouldn't mind, and i'm going to ask you to a judicious self briefly and to ask her question briefly and we will have a few minutes of u.n. day and then we will wrap up this extraordinary panel. >> my name is clarke wardlow and i'm a former partner and it is great to see you. why the question, what was the reaction among your fellow commissioners to the speech? >> clarke, it is good to see you. at that time the fcc had seven members. by law, the party can have -- we can't all be in one party. i had a very cordial relationship with all my commissioners. we never once, never once while

i was there, had a partisan difference, but we did have a philosophical difference. most of them did not think that the fcc should be as active as i wanted it to be. when i wanted to intervene on getting the station in new york, it was a noncommercial station, i had some trouble with my colleagues. the first day i was there, the congress asked us for our position on public funding for educational television. six commissioners said it was none of our business. i said, it is their business. we are here to serve the public interest. this is our business. so there was different philosophical views but in terms of a personal relationship, they were always very very good. >> yes, sir l..

>> my name is larry grossman. i am a chairman with mr. minow on the digital promise project project which has a promise of starting a new research center that will help transform education and lifelong learning and skills training. newt has been its co-chairman of that pushing it for 12 years. i think it is worth hearing about his interest even in this period period in the future in addition to the past. >> i should add buries the former president of pbs and the former president of nbc news. and a great public servant. larry and i and and murphy have been working for years on this project. we finally got through congress on a bipartisan basis, and the idea was to create an entity at the department of education, to

provide technological advances to the classroom and for lifelong learning and we are very optimistic that this may greatly improve education. our original idea was to use the money from the auctions of the spectrum for this purpose. just as the land grant colleges were established in the civil war was similar. i later learned that i knew senator stevens from alaska. i knew him from having worked with him on a legal case before he went into government and i went to see him. he was chairman of the senate appropriations committee. he said newt that money is often scored. i said what discord in? he said scored means it is already been spent. it is already been signed. i said you did that in private

business you would all go to jail. gibney the money yet. it has been spent before you got it. he said that is the way we do things here. so we didn't succeed in getting that funding, but congress did create it. with larry's guidance and we are very optimistic that digital promise we'll will have a major impact in the future on education. >> if i could just add one thing to that. the opportunities around technology and education are an area where newt has been a visionary. when you think about it, kids are carrying around today 50 pounds of out of date oaks in their backpacks. when we know that for essentially the same cost or less they can have a portable learning device, a tablet, with minimum of two date textbooks

but unleashing the power of education innovators to work on individualized learning for students to extend opportunity all over the country to be first multipliers for teachers everywhere. is a really important area, and i am glad about this and we have a lot we are working on in this area as well. >> newt i want to take you back for a minute for the two words you want to be remembered public interest. public broadcasters put out a glossy brochure that says they do tend to $12 billion worth of efforts in the public interest which one you examine more closely his public public service announcements at 3:00 a.m., a declining amount of news, very little that would be children's programming that anybody would want as educational programming. what do you think should be done now, given that the weapons

really aren't available to take away licenses in any significant way to actually enable broadcasters to operate in the public interest convenience and necessity or is it time to turn to something your general counsel has promoted for a long time which is to say nevermind those obligations, they are done anyhow, just pay his rent for the spectrum that the public owns? >> well, some people, very thoughtful people believe that what there should be of some a some kind of a revenue stream from the commercial broadcasters who are earning income that would go to supporting noncommercial system. originally the carnegie foundation proposal in the 60s when it proposed the concept of public television, for every television sets sold there would be a 5-dollar tax or a 5-dollar excise fee that could go into a

trust fund to support what is now pbs and npr and the stations. that was during the vietnam war and president johnson didn't want to have any more attention to any increase in taxes so it didn't happen. public broadcasting today is poor. it has to plead on radio and on television pledge nights for money which is disgraceful in this country. so one way or another to get a funding mechanism is is there by a transfer fee on broadcast licenses or a regular set percentage, something like that. one of my best students is here from canada. canada has a system like this and great britain has a system like this. japan has a system like this. it seems to me that we in america have got to find some

better way to finance public broadcasting. >> a better way to finance public broadcasting and a better way to encourage the public interest. i am afraid we are out of time and the fcc chairman is to get to the airport to attend to important business. >> tell them what mary goldberg has got you doing. [laughter] >> well, we are going to be making an announcement tomorrow morning around improving emergency alerts and times of disaster and thinking creatively about mobile phones, and how they can be part of the 21st century early warning alerting system and more to come tomorrow. >> okay, this is an initiative of national significance for new

york only. >> ultimately national. >> ultimately national. we will stay tuned as they say. julius genachowski, thank you very much. minow, unbelievable. thank you very much. [applause] [applause] [inaudible conversations] >> coming up on c-span2, next several highlights from the senate floor today including the swearing in of nevada republican dean heller. and a portion of the debate on the nomination of james kohl to be deputy attorney general.

the other discussion on the future of the federal reserve and what role it should play in shaping the u.s. economy. a advocates are the gas on tomorrow's "washington journal."

>> earlier today republican dean heller was sworn in on the florida senate, taking the place of former senator john ensign who resigned last week. mr. heller who served in the house of representatives since 2007 was appointed by nevada's governor brian sandoval to fill the vacancy.

>> will you please raise your right hand? do you solemnly swear you will support and defend the constitution of the united states? domestic, that he will bear true faith allegiance to the same, that you take this oath, you take this obligation freely without any mental reservation or purpose of evasion and youcht well and freely and faithfullyre discharge the duties of thego office on what you are about to enter, so help you god? >> i i do. >> congratulations senator.s, >> thank you very much. mh. [applause]

later in the afternoon, the senate debated the nomination of james cole for deputy attorney general, the number two position in the justice department. mr. kohl who has served under a recess appointment said since december has worked in the justice department in the 80's before shifting to private practice. the senate ended up blocking mr. kohl's nomination 50-40. 60 votes were needed to move his nomination forward. here is a 30 minute portion from that debate. >> mr. president, i want to speak in opposition to the nomination of james cole forey deputy attorney general of theth united states,e who we will bea voting on a little later this afternoon. despite president obama's recess appointment of mr. kohl we have had a number of opposition

statements in the committee and was not looking at smoothh sailing. i do confirmation and his permanent appointment based on concerns i have with his record and his criminal justice view on the war on terror, which iieve believe is utterly wrong and his questionable decisions with an outside consultant for aig big insurance company that had to be bailed out to the tune of i think $170 billion in this last bailout manner. he was anla independent consultt supposed to be monitoring that company for other errors they had made previously. and, that is a concern to me. ys

i serve 15 years in the department o ifde justice as yof a attorney for almost 12, and aa an assistant united statesis attorney. i respect thee department. department. i love the department of justice but i am getting concerned about it.bo and i'm notut happy with some of the decisions and philosophies that are emanating from the department. i believe they do not reflect the highest standards and quality that we expect from that great department and this nominee has a lot of good aoo qualities. i believe he has a number of strengths that as management and some experience in his department that i would give hir credit for, but at this point in history, i believe that his approach particularly to the war on terror, along with the

attorney general's approach to the war on terror, are not good. ius have just about had enough d it and i'm just going to say t this. i am not voting for another nominee and i'm not going to vote for this one who spent their time defending terroristsi before they go to the department it is all right to -- a person t by 13 to 15 members of the p department of justice political parties by this administration have added their backgrounds defending terrorists including the solicitor general who is going to be coming up i guess in committee this week, and also, aclu. so you get this much of a tilt in the leadership in the department gives me great

concern that the great department i love and respect is getting off base.hi so i think it is important tote note that we are hearing warnings right now that's one o the top priorities at the department of justice must j be the recent warnings we have received that the terrorist groups quote almost g certainlya will try to avenge the death of osama bin laden and the continuing economic crisis that faces our country. so i believe that the president should be nominating proven prosecutors, prosecutors of terrorist frankly for top positions in in the lawnf enforcement agency, unitedordepa states department of justice. i don't think we need anrty more terrorist defense attorneys. when i was the united states attorney i hired a lot of assistant united states attorneys. i looked for proven prosecutorsi where were i could find them. i didn't go-round to l look are

people who had spent her spare time volunteering to defend spa terrorist or writing papers defending criminals. that is just the way i see it frankly and i have to be honest about it.t. we have had this one and had that one h and another one andnd another and another and now 13-16 have been appointed to the department of justice we have had thisee background. unpul defending it is notg. disqualifying and i voted for a number of people in the department who have beenn involved in these kinds of defense efforts will file bush.ts against president they really thought they were doing something great.ometng i guess they didn't turn down the evidence if it helped in any way lead to the location of osama bin laden, but we do have standards about how we should gather evidence and lines should

not be crossed. that doesn't mean we are not in a war. w. it doesn't mean that the people who are attacking us are commons criminals that need to be tried in civilian courts. they are at war with us.n said bin laden said he is at war with us. he declared war on us. you don't treat prisoners of war captured enemy combatants like you treat common criminals. this is fundamental. ire served in the army reserve were for a number of years and o some of that as a j.a.g. officer. i taught courses on prisoners of war and how to treat prisoners and what the standards of theat field manual are. w don't claim to be a great expert at it but i did it, had some experience in the. mr. cole consistently, and some

of these nominees to the department, take the view that terrorists are criminals and not unlawful combatants. let me just say briefly if you catch a person, a murderer, a rapistra or any kind of criminar virtually of any kind, when they are taken into custody as the presiding officer noted as a good prosecutor himself, they have to g be, before you can interview them, once they are ie custody you have to give them around the warnings and that authorizes and tells them, basically tells them you don't have to make any statements at y all. you are entitled to a lawyer and

if you don't have any lawyer or. they will point you in our. you have to a go before thecoveo magistrate within a number ofou hours. you are entitled to ace eddie trial. .. inquirying in world war ii where german saboteurs were dropped off on our coast from a submarine and they were going to sabotage the united states of america. they were apprehended, taken to military tribunal, tried and executed in a matter of months, and the case went to the supreme court ex parte querin and was affirmed. there has never been any doubt that unlawful combatants can be

tried for their crimes in military courts. it's done all over the world. it's an established principle. now, let's get one thing straight. if you're a lawful combatant and you are captured on the battlefield, whether you're a ortlefield, whether you're a japanese soldier or germanoldir to comply with of the law andifa where your uniform and you don't attack deliberately men and women children civilians and try to kill them and comply with othe or rules of the war you cat tried, be tried, until the war is over you don't give lawyers with thaf but conducting your militaryiole campaign you violate thews of w internationally respected fully of the war and can be held as a, prisoner of war iraq but then th

nationol its holding you can try you for violation of the law of the war. so that's how these 9/11 attacks who attacked civilians are perft perfectly fits to be tried as wr war criminals, unlawful warriors. at war they have announced their intention to destroy the unitede states to attack the unitedck states at war with us. they have unlawful way and they can bee tried in the militaryommissions commissions and this allows the military to conduct interrogations' according to the law of the war at and over a period of months even, years afr even, sometimes after months of prisoner will start talking.

you never know why they start talking.g. but they deny ourselves the thet right to allow this kind ofhings things to happen to say that we have to try the individuals like khalid sheikh mohammed in civil court is clearly an error. in but i see the attorney generalla when hne talked about it beforey the judiciary committee.k he indicated, not indicated, he- said it remains the policy ofrep the part of the justice that persons who are arrested as a terrorists are presumed to be as tried in civilian courts. although congress passed a lawoo prohibiting the money to be extended on the 9/11 attackersuf

and the attorney general's have to say that khalid sheikh mohammed will be tried in guantanamo under the militaryres .rocedures s and unlawful ctant combatant. he doesn't like it in the looksy like a free but he wants to hire to be in the department of that justice agrees with that not erroneous view.lose it's not a close question. this is not a close question. a they have no reason a terrorist apprehended in the united states ought to be provided by lawyers and grander warnings. they are they are combatants, they are not common criminals, and itngerous confusion. as our troops and intelligence community continue to work nigho and day to keep the country sayt it is imperative that we view the war on terror as a real war and if not a criminal matter.

and regard those who wish to rpetrate perpetrate t terror on this ene country as enemy combatants, noi playing criminals.inistrat like many in the administration, mr. cool disagrees. in 2002, after 9/11, not long,e, he wrote an op-ed, publisher, criticizing the then attorney general john ashcroft decision to try the 9/11 terrorists and military commissions. they researched law.ener attorney-galeneral ashcroft knew what he wwas doing. they decided they were going toy try these individuals in the military commissions.earing -- but he had written an op-edattol attacking the attorney general for it. so now we got nominee for the attorney deputy general of the t united states. at his hearing last congress,epe mr. kohl repeated thatan prevailing in the confusing

justice department provisions that the decisions regarding where the captured terrorist should be tried in civilian srrists courts or before militarycilianc commissions, quote, should be made on a case by case basis o based on all the relevant facts and circumstances available aten the time of a suspect's capture. it's going to happen in yemen?hr afghanistan, pakistan, wherever else it may be in the unitedit'n states. it's not a practical policy because you have to tell the individuals who are making the e ttprehension with the rules area and as the attorney general's, they still adhere to the view that the presumption is that the individual will be tried in pres civilian court therefore the

short time being taken into custody they should be given, oa miranda warnings, offered a crt lawyer and set for the preliminary court appearance, rl which could reveal to all the other terrorists exactly that eme partner in war has beenand h captured, and allow them to escape.and why it's just a wrong view and whyby they persist this is beyond my understanding. congress understands it, the american people do also.tration the set fenestration has policht established a policy that declares there is a presumption of civilian trial, and it's failed to articulate a clear cae policy of this it meeting captured terrorists as enemy combatants or criminals. i so, i remain very unconvinced nt that the next captured terroren fuspect will not be given the o

rights of a common criminal the until he has been told he has cl the right to remain silent.11 the 9/11 commission and one of the most significant findings ie was that intelligence gathering, intelligence possession about the enemy is doing is the best way to protect the country. not prosecuting them after the e fact.ght so telling someone they have the right to remain silent and theyt have a lawyer that is going to insist they not make any gathe statements, does that help us gather intelligence? c we will plaine do it regardless but it's not required by law,lah history or the constitution. saw, the history and the cbatant constitution allows the enemy in combatants to be tried in the military commissions and they don't have to be given miranda

created rule a number of years ago but never was understood ceacti before and is not practiced to e my knowledge in any other nation in the whole world. of and of course all of this provides g poor guidance for the law enforcement, military and about their efforts and it is ao grievous dangerous mistake toeee continue this policy. it seems to me that the attorney general holder are cut from the same cloth on this issue. these i am uneasy about these the individuals holding the top two positions in the department ofde justice and now the solicitor general seems to be a third oneg coming along for the highest ranking people in the department their policy views appear too

control the department ofnse. defense. in other words if they say thisf is the defense has to give the miranda warnings and so forth if they a are involved in the capture andr it directly controls the fbi der which is part of the department of justice. the acting second command mr. kohl would play a lead rolek ining decision making in the te. prosecution's throughout the country. the justice department continuel insistence on the resumption oft civilian trials for terrorists confirms my concern mr. kohl has 9/11 law enforcement approach to terrorism, an approach the 9/11e commission and the nation as a ihole recognized was an error and should be changed. w

i thought we clearly made thataw eove. apparently we haven't. also of concern, from 2003 to si 2007 mr. colcord presented a saudi prince against insuranceth carriers and september 11th allt victims who alleged that the saudi prince helped financerted, terrorists. cole's reportedly mr. kohl was linkeddt through treasuryme department through the financial support ot extremist groups through the condition a saudi charity that has diverted funds to al qaeda before and after 9/11. while the attorneys are free to and should be free to representf of the political appointees of the department of justice who seemed to me to make questionable choices.

seemed to be questionablethat'sd charged with defending our national security, given their d previous efforts to defend those involved in the united states or killing americans. a on the press reported least 13 to 16 current obamare administration politicaleedz, appointees including the currene solicitor general nominee who represented the eshoo bomber previously provided legallla, te counsel to suspected or convicted terrorists and enemy combatants then held in detention for the left-wing organizations that act to reverse the bush administration anti-terrorist detainee policies policies thati might add wererio contributing factors t to theinn elimination of bin laden and

many other interests through this past decade. know i'm curious to know if they havt appointed anyone in the's department of justice who's ever prosecuted a terrorist. t i'd like to know that, maybesury they have, surely somebody has,d but it looks odd to me that so many of those who have been on n the other side and have been given top appointments. and i'm very disappointed on another subject with this toefed administration education of the duty to defend the congressional the inactive law specifically the defense of marriage act. the attorney general has stated that the president decided, attorney general holder that- obama decided he wouldolder --t

after reviewing the attorney general's recommendations that n falls under the exception which posted the part of justice cannot offer a reasonable argument in the defense of the statute's constitutionality, end of quote.d and it's been defended by a numberai of courts how do we just waltzo in and decide we are not going to defend a congressionally enacted statute signed into law by president clinton becauseike they don't like it? that's what appears to me.n aftr the administration can to this - conclusion after unilaterally " deciding that,cl quote, classifications based on the t heightened scrutiny. in the face from 11th circuit aa courlst of appeals holding that

such classifications should be reviewed under the much lower normal rational basis standard. there is a difference between refusing to defend the law that the administration in regards ol unconstitutional and refusing to defend the law that the administration opposes on policy grounds.ional - mr. president, i would ask for one c additional. >> without objection. >> mr. president, the department of justice is a great department and they have some very fine mrs people. i know mr. kohl has great qualities and for the attorney general i am very uneasy about department is taking on a large number of issues, and i believeo one of the reasons this is surud

happening is because they surrounded themselves with a group of leftist lawyers,lawy activist lawyers who don'tnal operate according to the more traditional views of of the law. justice in america. that is my view. as much as i disagree that is my blt a view. and i would just say i'm not able to support mr. kohl for that in the reasons i stated ant we're hoping in the future that the administration will appointf more nominees that have provensa records of independence, effective prosecution and commitment thao the law. i thank the cherry and i would yield the floor. >> mr. president? >> the senator from maryland. >> mr. president, i greatly respect my friend from alabama, senator sessions. i've come to a differentri conclusions in regards to jim cole.iffere life worked ntwith jim kolbe. i wasim part of a legislative a

committee in the house ofin theo representatives that had to do some veryso difficult work on af ethics issue involving a former house of tough representatives. it was a tough decision to brinr together six membersee of theeps house, three democrats, three i republicans, and to do it in a way that would maintain the nonpartisan requirement of the ethics investigation.er the atmosphere was very partisan around the work we were doing. n i know this sounds familiar because people in connecticut there and around thy nation understand we are workinr in a very partisan environment here. and athey expect people that ae charged with the department of justice to work in a non-partisan manner isn't a partisan position the deputy attorney general. this is a person who is working with the attorney generalwe wany

nation's lawyer and we want somebody who has the experienc , someone who has the character and the commitment to carry out this very important position. j as i said, i've known jim cole.f he has 13 years of experienceuse within the department of justice as a public-interest attorney. that's been the largest part ofp his professional career has beet the service of public interest and has always followed policy, not politics.care he is a very distinguished career in the law and it is the type of person we would like to see in the department of justicr the investigation involving the former speaker of the house of o representatives at that time wae the speaker.

th cha a drinking a republican, the chairman ofir the committee wasa tionblican from florida.bserva the observation of jim call was used italy and prosecutor. he he fought our committee to a bipartisan cooperation was desperately needed to completeof that matter. at the end of the day the six of us came together in a unanimousn recommendation. that is the type of person that he is. his professional and put policy ahead of politics. emm coles's confirmationormer rm hearing, former republicanenate member of the united states senate. he called jim cole a lawyer'sdes

lawyer. he has support for the democrats and republicans, former high officials within the departmentl of justice have all recommended we and former deputy generals gl appointed by both republicans and democrats supporting the nomination for the deputy attorney general.spected onoth s and would be greatly respect on both sides of the all and that l is craig fielding the white house counsel for former president george w. bush.he he said he combines all the qualities you want in a citizent public service. he understands both sides of the street and a smart and tenacious and a person of unquestioned honor and integrity, that is to what fred fielding the former white house council president st bush said about jim call.

he supported by the formeroffici officials and the dnc officialss but he's notan a partisan.n he's a non-partisan person who's put public interest law as theak top. he said the political debate in taking place in this country over the best way to bring terrorist to justice. mr. kohl however will put principal over politics and is ea case a committed to evaluating each case and matter that comes the s before him based on the facts and the law.partment department of justice. in the value and the character that we want in our nation's department of justice and jim cole will bring that to theady o department of justice and already brought to the lin department of justice. the bottom line of that approach is fighting terrorists is one and i believe we ought to believe in. all belie

we are a nation at war mackey wh with al qaeda and taliban and their seceded forces. aggressiv we need a tough, aggressive and inexible policy to recognize thd paramount importance of abily to providing the president with the ability to use all of unlawful tools koln all lawful tools of t our national power to protect t. american people and bring terrorists to justice.ji col he believes in that. working and he's committed to working with congress so that we use all available tools.ase we make the judge in each casere as to where it is to affect theo way to bring a terrorist or criminal to justice. he has had very importantitionsn positions in the department ofce justice supervising the criminal precution prosecution of white collarstane

crime to a. he said valuable player makingyr sure the department of justicee follows in the fine tradition o. that agency. my i just urge my colleagues to vote to move forward, at least vote to allow that this nomination gets an up or down vy vote. this critically important job, and i don't a think that he is t of a partisan person and would be a career high individual interested in doing the rightt t policy, but this is not a nominee where you should be using a filibuster to prevent an

up or down vote. importa this is a very important position for the country the dignity of the senate and thetid part of justice and the decency, of jim cole. cagues i urge my colleagues to allow uo to go forward with an up or down on his vote on the c confirmation, andi myolleag would urge my colleagues to support the confirmation to theo deputy attorney general of the united states.th that, with that mr. president, i would suggest the absence of a quorum and yield the floor.

in

the federal reserve role in promoting u.s. economic growth and jobs was the focus of the panel discussion today at the new america foundation. panelists included a former assistant director in the federal reserve monetary affairs division who worked on the fed's bond purchasing program. the new america foundation and the roosevelt institute co posted this conference on the

future of the federal reserve. >> to help explore these issues we will have the peterson institute for international economics, dean baker of the center for economic policy research and tim chapman -- tim canova. we will begin with joe and then i will introduce the other panelists after the presentation joe gagnon is a former visiting associate director of the division of monetary affairs at u.s. federal reserve board. prior to that he was associate director of the international command and senior economist and has taught at the university high school business. joe if you can start the discussion off. [applause]

>> is there a quicker than i can -- is somebody going to turn the page? >> thanks for having me here, michael. i would like to talk about what the federal reserve can and should be doing to help restore full employment. let me just start by saying it's true the federal reserve said the policy rate to zero, the lowest it's ever been and that is bound for the reasons i won't go into. but it doesn't mean that it's all the federal reserve can do. the federal reserve monetary policy works in general by tilting the balance between savers and spenders so in the monetary policy wants to

increase spending to get the economy going, they look for the return return that makes it more attractive to borrow and spend. when they want to slow the economy down they raise it which makes it more attractive to save and not spend and that's how they get the economy moving the way they want. normally, the u.s. short-term interest rates to do this which they have under their control. but as we have learned, in the past couple of years the federal reserve and federal banks do have an important influence on longer-term interest rates and that is what quantitative easing was all about. in particular you can lower the long-term rate which is to raise the bond rate of that asset, and that should come as far as that stimulates spending and discourages saving in a normal way. but there is actually other

channels the monetary policy can work through in principle there's nothing a central bank can't do to raise the prices and lower the rates of return and encourage spending if it needs to. in the united states there are the laws that prevent the reserve by buying equities but the bank of japan can and has bought equity. now you will notice i haven't mentioned the service standard textbook bank lending channel. when we did the first qe quantitative easing we knew that the bank was broken and we didn't expect -- it wasn't the federal reserve then -- we didn't expect it to work through the system, we expected it to work through the other channels. i'm not saying the bank system is in the channel also but it wasn't this time. so the way to think about the monetary policy is that there is really no limit to how much

private spending and central bank can create if it wants to under any circumstances. now it can't just stop and start on a dime it's like stealing a supertanker. so there is a essentially no limit to how much people can encourage its spending. but you don't want to overdo this ability because if you do, try to push the economy too hard and too fast you will get inflation instead of employment and we sort of lose that channel, it will be inflationary rather than unemployment but right now there is not much concerned about inflation in the u.s.. there is outside the u.s. because commodity prices there is an inflationary risk outside

the u.s. because fast growth in the rest of the world but most about 80 to 90% at july 90% of costs in the u.s. are not from commodities they're mostly labor in the u.s. so that's not a concern right now. of course this would last forever. now, just briefly, normally central banks prefer and the gift and very reluctant to do anything else besides short-term interest rates because that is what they are used to. it's their bread-and-butter. it's kind of very threatening and scary to face a new world in which you have to use a different power than you normally did and that is why they haven't done much and i don't have time to go into this but some of these other things the fed could do are a bit riskier for the balance sheet also in the scheme of things not really. but they are a bit riskier so they prefer to stick to what is safe and simple.

but, the actions the fed took in late 2008 and in 2009i think we're pretty aggressive. i do believe chairman bernanke is right when he says that the fed avoided a second great depression i think this almost any measure of a financial market shot that hit us in 2008 was bigger than the one in 1929 the policy responses better and i think the chairman is right he was aggressive and rightly so. but i think the circumstances demanded even more aggressive action. to say that you were aggressive and saved us from the second greatest depression, fine, kudos. we probably don't acknowledge that enough but it doesn't mean the fed delivered the right amount. this is an uncertain area and i

think they were still a bit cautious relative to what was needed. so, near the end of the first round of quantitative easing and 11 months later and about a quarter of the. during this process the fed was fees' in lots of oppositions and people in the markets who didn't want this, people were afraid of inflation which has been nonexistent i might remind people two years ago people were screaming that the fed policies were going to cause runaway inflation by now and it hasn't happened even with the oil prices over two per cent and the future markets are surely going

to fall from here on out. there is little support for the quality defeasing. my sense is that this committee has cost of these 100 million jobs or we could have been by now where lipitor we are now which is most unfortunate but somewhat understandable. and i think we need more voices on both sides. all the figures is what they're doing is dangerous, they're doing is inflationary, how they are out of control and in the public mind to think of what the fed has done confused with bailouts and i'm not talking about the bailout part of the fed policy i'm talking about just ordinary bread-and-butter monetary policy. what we probably need right now is not an end to the qe to put some continuation and what we

had in the past six months. as the economy recovers the scope for doing qe as reducing overtime. we have to look forward, and it looks like there is scope for monetary policy that if you look two years before custis unemployment is still going to be of their estimate where it should be and inflation of the estimate where they want it for the next two years throughout going into three years from now. seems to me that that is not acceptable and probably the weakest part of chairman bernanke's press conference when he was asked about this. if you're under shooting on unemployment throughout your forecast for three years ahead,

why aren't doing more and that is the customer need to ask more and more of them and i think the only answer he got was some people are worried about inflation in the future. the same people have been proven wrong continuously the past two years. they are not expected to continue to rise the future markets have energy prices falling the next two years. bygones are bygones, you shouldn't fight inflation when it is actually expected to be negative in the future. and they are the lowest level in the history. this to me is the weakest part of that stand policy right now. it is diminishing because as the economy recovers the gap needs to be filled is less.

if there is an agreement to drastically rain in the budget deficit in the near term then i think we really will need more qe than i recommend it. my final thought, the lesson i would say is the fed needs to hear voices on both sides, would feel much more comfortable going where i think it actually wants to go and actually has some support, i think as i said, its own forecast meant it's not having good policy. i think the chairman worries about inflation expectations but i would note that said mandate is not to address the inflation inflation concern when as we have seen it is unwarranted. the fed mandate is to deliver lower actual inflation where we are talking about something in the range of one, two, 3%. and even with oil prices we haven't even exceeded that range

from and the best forecast is we are going to be below it again at the low end of that range going forward. thank you. >> if i can ask another panelist to join us. >> thank you for setting up our conversation this morning. he will be joined by dean baker who is at the center for economic and policy research. author of taking economics seriously, he's worked as a consultant for the bank, the joint economic committee of the u.s. congress and the speed. we will also be joined by tim canova, who is of the betty hutton williams professor economic lot chapman university law school and the co-director of the center will wall and development his research crosses the disciplines of the law, public finance, economics and

history. if we could begin. >> thanks a lot, like. i appreciate the chance to talk about this. we have the adult table and the kids table and i think as much a policy debate in washington as being the kids table. you could argue over i was reading in the times this big thing about the oil tax breaks which i take them back to the reality is nothing. it's not really any money. what really matters is the fed and we are not invited to the table for the most part it's over here, don't talk about that, that's not the realm of congress, not really the realm of popular discussion. what policies are in terms of employment issues and he talked about the dual mandate which is

exactly right we are looking at least in principle we have a dual mandate unlike the european central bank which has a focus on inflation and the of this focus on inflation i worry that we are leaning towards that the facto even if not all. i would say about that at the budget people don't appreciate how important the fed is for the budget and it's enormously important in a couple of ways of large year. we've avoided the second great depression, but i would argue again with him the fed could be more aggressive and i actually to read that further than joe would. you have this mandate here that the fed is obligated to pursue high levels of unemployment which are defined in the law as of 4% unemployment and price stability and you are hard pressed to argue the fed follows those with people's vigor and i have a sort of like opening to

me to the couple of the members of the governors that in the 90's and i will see what was, there were more liberal members and we can get the lower rates to unemployment i think at that time it was 6% which was generally believed to be the lowest you could get and i would argue what is wrong with, you know, trying to see what happens if we have low rates of inflation. the risk of unemployment we will see inflation accelerate. it's very gradual. there is no model that shows if you get half a percentage point or a percentage point below the that person goes through the route to the car roof. there is no model the will show you that, no evidence. [inaudible] it isn't a big problem of higher inflation at that time to plant five or three, suppose it went to 3.5 or four and said well, the fed is committed to the price stability. the fed also made the 4%

unemployment so no one takes that seriously. yes, i do. which i think speaks volumes and the point is we have a long, we have a congressional mandate. they are symmetric, supposed to get unemployment and inflation. they obviously do not look at those symmetrically and that is a function of who follows the fed, who has input with the fed. they are constantly engaging members of the financial community. the idea is the congress is supposed to be hands off. let me point out you can sort of say it's okay if you've been doing a great job. you're a little hard pressed to say that. we can talk of the current and we should talk of the current collapse but let's go back on the absolute conventional wisdom i was being laughed at because i felt the unemployment rate can be below 6% and i will refer to someone i have great respect for all the time these days, paul krugman, a great piece called

speed to the second half of 1995 and major will call it the international economist and said the only people who question the existence of the neighborhood in this range are politically motivated attacks. the unemployment got down to 4% and we have little evidence of inflation. how did that happen? alan greenspan of an idiosyncratic character said i don't see any inflation and he allowed the unemployment rate to continue to go down. he didn't raise rates even when other members including liberal members said you have to raise rates or we will have inflation. so, it says that there is a claim of expertise trust the experts, trust us, we know what we are doing. no, you don't know what you're doing. the evidence is you mess up again and again and again, you absolutely need public oversight. okay, so just say that has historically would argue again if you're talking about the

other banks who would say this times ten but certainly with the fed. the budget, i get a big kick out of this budget stuff and everyone is saying they want to pat themselves on the back. we got the balanced budget back in the 90's, we could argue whether or not clinton did things right but what some interesting reading go back to january, 1996 and look at the congressional budget office projections for the deficit in the year 2000. the projected about 250 billion current 2% of gdp. all you remember back in 2000 we had a huge surplus, about a 5% switch. okay, why did i say jim orie, 1996? because at that point they were in place. all of the spending cuts were in place and in fact we actually looked through the cbo tracks say that when there's a change in the projections, you know, every six months or whatever they say how much of that was due to the legislative changes, how much to economics. well, if you some of the

legislative changes, but was changed to the tax and spending policy january 96 to 2,000 went the wrong way. we had about 10 billion greater towards deficit. so how do we switch five percentage points of gdp? that would be 750 billion in the economy when we are going the wrong way making the deficit bigger. well, in 1986, january, 1996, the congressional budget office assumed the rate would be 6% in 2000. the unemployment rate averaged 4%. the difference between 6% to 4% unemployment, we had tax revenue from the stock market bubble. but the main reason that we got from a deficit of 2.5% of gdp to the surplus of 2.5% of gdp is we allowed the unemployment rate to go below what all the experts thought was possible. the experts had their way we would have still had a very large budget deficit in the year 2000. so, we would be thankful for

ellen greenspan. the other point i will make and i would love to throw this out there because maybe someone can give me a counter argument how the fed could it affect the deficit. welcome as we know in qe to it is logging of the bond over six-point children to be cut trillion suppose the fed were to buy the bonds could push it to 3 trillion to get the round numbers and just hold it, hold those assets. would that do? people were jumping up and down it would create inflation. to counter that we could raise the reserve requirements, another teaching macrothe fed has different ways to control the money supply and one way to do that is raised reserve requirements. suppose the fed sat there on $3 trillion of u.s. government debt and held that the next decade will land beyond. what does that do? the differences on the order cumulatively of $1.8 trillion in interest payments. why is that? the interest is paid to the fed and funded at to the treasury. last to the funded $80 billion

to the treasury. so, we would have much, much lower interest payments over the course of a decade and beyond if the fed simply bought and held the bond. its body and then today the anticipation is that i will sell them back to the public saw the interest will be paid to the public rather than back to the treasury. i would argue there's no reason for them to simply hold them and have the interest paid back to the treasury. okay, well, the last point what should the fed be doing now i'm 100% the fed should be more aggressive you look around, you are hard-pressed to find any evidence of inflation anywhere in the the data has become almost comical because they're pointing to the rise in commodity prices which again a lot of that is due to china and india and bombing china and india i, we are going to do about the rise i don't know what we are going to do about that and that seems to be reversed. let's imagine that is heads down as most forecasters are showing.

they should be worried about the deflationary. i'm not worried what deflationary frankly but the point is you are very hard pressed to find any real evidence of inflation if you point to the commodity prices they start to go the other way you really don't have anything. i would argue that we need to be much more aggressive, again, has joann stealing one of his ideas, you could target long-term interest rates i think he proposed targeting the five-year rate sweetheart a long term interest rate to say we are going to buy up enough bonds to get 1.5% within that target is. you could actually do a step further this is something that chairman bernanke advocated back when he was a professor at princeton for japan he said why don't we toward a higher inflation rate. target three or 4% inflation rate it's actually good in the current environment against the zeroth the other reason why it's so good is would relieve the debt burden.

it's up inflation if we want people to get out from under the debt than to have a somewhat higher inflation. we need to have a much broader debate on the fed and i would conclude by saying if we think about the fed there's this idea that it's kind of this church politicians aren't supposed to talk about i would say from the food and drug of ministers and we don't want congress deciding individual drugs. if it is this drug is safe or harmful i don't think anyone would argue that congress should be doing that. and if the fda doesn't approve any drugs for five years we could say there's a problem and an immensely and from then we would say there's a problem. there's an obligation or responsibility to oversee the fda the same way that it's an obligation to oversee the fed. i would say they are doing a good job right now. [applause]

thank you it's a pleasure to be here. and i agree with one of the statements been just made about this great depression. when we compare the 1930's with today during the 1930's the unemployment rate fell in half during that decade and there was a significant economic growth and we still refer to it as a great depression. because even though the unemployment rate fell in half it was still the incredibly high unemployment. and today there's a tendency would recall what we are in today. it's no longer a recession technically even though i hear it called the great recession. it's not a recession because we do see some economic growth. the unemployment rate has come down but really barely. now barely below 9% officially and as we have heard earlier and when you start including underemployment and part-time workers looking for jobs and those who have fallen out of the labour market and discouraged workers we are talking about

perhaps double that. it's an enormous percentage of the population that is demoralizing and discouraged today. i think it's useful and i talked about this quite a bit, it's useful to compare today to the 1940's and i look at the 1940's federal reserve as a model for the full employment. when the fed unaccommodated much larger deficit stan today but the reactive deficit was government spending on real jobs, real industry, a real education, the first half of the decade of course was world war ii but the second half of the decade was the g.i. bill of rights and the marshall plan and we compare that with today, the quantitative easing programs. the federal reserve spending but its spending to prop up the financial markets and bank balance sheets and to try to lower interest rates to help encourage business investment in a roundabout way and there was discredited years ago and was pushing on a string the was the

metaphor rather than directly stimulating the demand to the government spending. and just to get an idea of the metrics during the 1940's, federal government spending was about 45% of gross domestic product. today it is about 26% i believe. the federal deficit are in the 1940's was more banff 30% of gdp. today it is about 10%. long-term interest rates are actually lower during the 1940's and today. the treasury was about 2.5% pegged by the federal reserve will cut interest rates even lower than today even though the federal government was borrowing three times as much at its peak. gross domestic product economic growth during the 1940's average more than 46% much tighter than today and inflation was kept low during the 1940's. so, the federal reserve was a big part of the story in the 1940's and accomplished the three main primary keynesian economic objectives. full employment, reducing the great disparities and income and

wealth and third, running in cartels and financial cartels in particular those three primary objectives are mutually reinforcing and as the federal government was to obtain a full employment jobs market unemployment by the end of world war ii at 1.2% that pulled the redistributed income to the middle class is. more money was in the hands of those segments of the population with a higher propensity to consume that helps increase aggregate demand, helps increase what was called animal spirits, a real business investment, and that interim increases tax revenue across-the-board as we would resources to work their able to pay taxes you have to ask with 15 million people out

of work right now and probably another 10 million detached from the job market it's a lot of people not paying their fica income taxes. today we see a downward cycle in the same metrics that's also mutually reinforcing in a very negative way. we have a restrictive fiscal policy, which actually, well, one indication of its is the cutbacks in state and local budgets across the board. and that is very reminiscent of the 1930's the state cuts and increases in lost two years it really undermines any federal fiscal stimulus coming from washington, d.c.. that undermines of course the job market, it undermines consumer income, the propensity

of the consumers to consume, to spend. we see a lot of belt-tightening and that undermines the incentives of the businesses to invest and reduce the tax revenues across-the-board as we have a very large tax deficits instead of active deficits so what to do. a lot of people were not experts in the area don't even know what we mean by qe1 and qe2 swedes good to define the terms. it is the mortgage pact securities purchase program which was begun in the when the aftermath of the 2008 collapse. the federal reserve went into the markets and purchased $1.25 trillion of mortgage-backed securities, these were the toxic mortgagors from the financial institutions shoveling money into the finance

sector not to the main street but wall street. broadened interest rates and stem the financial crisis and it propped up the bank's, but that money didn't result in real spending on the middle class and jobs in the middle class. in fact we see bank lending tightening during this period of time. and speed in many ways is more of the same. the assets the fed purchased are not as toxic, they were not toxic of all but there was still financial assets. in qe2 the fed purchases more than $600 billion of treasury of long-term treasury, and again it is to try to bring down long-term interest rates and hoping that that will lead the banks to start lending to the middle class and small businesses to mean street. i would suggest if we talk about a qe3 should be for me in st., not for wall street. with the federal reserve lending directly to the state and local governments to prop up their budgets so that there's not

another cycle of spending cuts at the state and local level. i'm living in california and in california it is like groundhog's day. it's like that bill murray movie where the state goes through all kind of pain to cut government spending, lee off teachers and other essentials services, poses an enormous budget gap, we go to sleep and we wake up to find that to three months later it's an enormous enormous budget crisis again and it's even bigger when you're cutting government spending in this kind of environment we are laying off tax the resources. so speed qe3, what would it look like? the federal reserve lending to the state and local government to say there should ao