and when we look beyond the west, let's say to japan or to china to pick two countries in asia, each of them have some very serious problems. different in some regards, but the answer is we have debt to gdp ratio that exceeds, i believe, any country in europe, and in china i think a lot of people are just waiting for that bubble to plow up. so i think it's more than just a crisis of the west or or capitalism, i think it comes back to the issue of just too much debt. i believe josh made that, that point that there's just, you know, too much spending on the global credit card so to speak and that's what has to be reined in, including in the united states. >> these are all valid points. this is a complex issue. too much debt generally depends on the ability to repay.

and that is, itself, summit to many different d subject to many different factors. david walker, the former comptroller general of the united states pointed out that at least according to his measure of fiscal responsibility that the top 34 nations, the u.s. ranks 28th behind some of the countries in europe. in terms of our fiscal responsibility. now, there are different ways to measure this, and none of us wants to be unduly alarmist. we clearly have a lot of work to do in our own country since our own credit rating was threatened this summer for the first time in modern history. so as we approach these issues, another dimension seems to be almost the longer you wait to deal with it, the more the contagion spreads and the greater the risk to confidence. i wonder almost if we'd intervened early with ireland or greece or one of these most troubled nations, if contagion could have been limited. of course, the origin of all of this seems to be excessive debt, inability to repay, promises

that can't be kept, and we're certainly subject to that in this country. and so often we even refuse to acknowledge the real debts of our own country, the real obligations. so i see that my time is expiring. i recall that one person has called for a competition to have the best idea to calmly allow a sovereign nation default or to leave the eurozone. are you aware of any good ideas in that area so that dismemberment can be manage inside a sensible way if, indeed, that's what it comes to? >> i believe i'm the one who made that comment. um, there actually is a little bit of historical experience with currency arrangements, currency common areas and the like coming unglued.

it's not quite of the -- certainly nothing of the magnitude that we have today. it's not going to be an easy process, but i think it comes down to a question of what are the alternatives. as bad as it may be for someone to exit, it's potentially worse not only for the particular country, but for the broader economy to delay the inevitable. and i, frankly, the more i look at in the more i think the sooner the problems are addressed the better. >> thank you, mr. chairman. my time has expired. >> mr. meehan of pennsylvania for five minutes. >> thank you, mr. chairman. i want to thank each of the panelists for your preparation for this and the remarkable capacity you have to take these complex issues and try to put them down into five minutes. that in and of itself is a challenge. but, um, this is a sobering issue, and i thank you for the work you're putting into it.

dr. sanders, you mentioned something that i wasn't quite sure i understood, that there was a discrepancy in the identification of whether some of these commitments were $7 trillion or $1.5 trillion, the fed disagreed. what is that about and why aren't we getting unanimity about something that fundamental? >> what that's about was the fed did not disclose the discount window operations, and they still haven't disclosed exactly fine details on it. and they have not disclosed their guarantee programs yet. but what happened was with the freedom of information act, fox news and bloomberg asked for the discount window information, it was produced, but the fed and bloomberg counted it differently. >> i think it was mr. rosner that used the word "opacity," but isn't this the essence? why are they entitled to be able to keep that kind of fundamental

information if it's tying back to guarantees from united states taxpayers private? >> well, i think the way i would answer that is i think they're worried about bank runs, and so if they don't disclose the discount window, then there's not information out there. although, again, i would argue the exact opposite. i would say if there's the threat of a bank run, i want to know that information in advance. i don't think the fed should be putting american taxpayers at risk. although they've lowered interest rates so low that retirees and fixed income houses are already getting pummeled, but that's a different issue. they're getting harmed by the euro crisis that way. again, i think chairman bernanke will defend the fed being secret. i think, you know, a lot of these problems would be, settle down a little bit if we had made them transparent. they really should be. >> mr. rosner, you used the word "opacity."

i was struck by that, i made a note on it, and i think that, you know, why isn't the european central bank being told, being asked to tell who's getting the loans or respond to my first question? i'm interested -- >> well, i think it's a great question, and i think that part of the problem here is that there's a huge difference between illiquidity and insolvency. and one has to wonder whether part of the reason of the opacity is to protect those who were seen as illiquid from being shown to be insolvent, okay? and i think -- >> what do you see as the difference? what is the difference between illiquidity -- >> if you have short-term funding issues but the assets on your balance sheet actually allow you to be well capitalized over the longer term, you're solvent. if you're fundamentally insolvent, you're insolvent, and no amount of liquidity will repair that. it will just smooth over the market impact of that for the short term. but this is part of the problem that's going on, is the

europeans have taken step after step to make claims of solvency over institutions that are fundamentally insolvent and mask it in illiquidity or liquidity problems. >> and would they be principally, you know, the countries that -- >> well, i think -- >> italy -- >> no. i think it's also the core. i think as we've seen you've had problems at commerce bank, you've had problems, you know, at several of the german and french banks, and it's not clear to me that it's, that there just is liquidity problems. it seems to me that in some cases there are insolvency problems. in fact, you know, i think we also have to recognize that part of the fiscal disciplines that everyone is talking about, everyone is calling for includes getting governments out of the business of providing funding for creditors' benefit on institutions that are fundamentally insolvent. that is a commitment of fiscal resources towards private

creditors as opposed to allowing market discipline to force losses to be recognized -- >> and what do we do then to make those, those creditors who, i guess, they're passing on that risk so to speak. how do we put them back into their appropriate place in the line so that they are the ones who accept both the benefit of the risk, but the impact of the down -- >> i think to some degree it's by stepping away. it's certainly not by doing what the troika in europe did to ireland which is force the irish government to recognize the debts of its banks as sovereign obligations as a way of preventing core banks from having to take losses on those obligations. >> would a run on the banks then cause there to be an overall run on -- >> i think there would be runs on insolvent institutions if we had enough information. i don't think that there's a problem if regulators ten inside ahead of that -- stepped in

ahead of that run and shut down or forced good bank/bad bank resolution of those institutions that were fundamentally insolvent. we would head off the bank runs as opposed to what we're doing which is the capital markets keep trying to give information to the european leadership telling them where the problems are, and the leadership does everything they can to avoid that coming out. we saw a bank stress test in europe in the spring of 2010 saying that only seven of 91 institutions had real problems. now, we've seen since then that that stress test was deeply flawed and inaccurate. we have done quite a bit to cover up insolvency issues in the name of illiquidity or liquidity issues. >> thank you, mr. chairman. i yield back. >> thank you. mr. rosner, i know you detailed that in the american financial system in your book, "reckless endangerment." quite a read. so -- but, mr. rell. for five minutes -- welch for

five minutes. >> thank you, mr. chairman, for calling the hearing, thank the panel. is it basically the consensus that congressman meehan's question implied more information is better is a point that all of you agree with? >> no. >> and do the others agree with it? >> yes. >> yes. >> i agree that better information, that more information is better, but the key question is how do people and how do policymakers specifically react on it. what counts is not what's spoken, but what actions are taken. >> so is that a you can't handle the truth? >> that's actually, that is to a great extent -- >> well, let's go to mr. elliott. you say no. it's hard to understand. that sounds like what we like. as long as we can confuse voters, then he may be -- we may be all right. [laughter] but voters don't like that, and rightly so. so why do we have that standard

that appears to apply to bankers? mr. elliott, you seem to be saying there's some upside to keeping things obscure. >> it's a question of balance. that is, i agree in many ways with what josh was saying, but the problem is in practice particularly in the middle of a crisis it's often very hard to tell the difference between illiquidity and insolvency. and so there's a fear that, for example, if you publish the discount rate, the discount window borrowings in the short term so people know very quickly, that if a bank does borrow a lot of the discount window which is secured borrowing, they have to bring good assets generally to get that money -- >> right. >> -- that if they do that which is important for liquidity, they'll be seen potentially as insolvent. >> so let me ask -- >> and so i think most people agree that the discount window if you do publish it, that you do at least want a delay of time.

>> right. so then there'd be a difference, in your view if i understand what you're saying, about managing information in the midst of a crisis where the market may react emotionally and hair trigger, but what about having systems that allow markets to digest over time in realtime what's going on? >> i think if there's enough of a gap of time, then i'm definitely comfortable with that. figuring out what the right gap is hard, and it's very important not to create a stigma -- >> let me go to mr. rosner. i don't have that much time. >> if we believe that these shareholder-owned corporations have an obligation to shareholders and we believe that markets can only work efficiently where there's symmetry of information, how can we argue against the disclosure of that information on the belief that there is no such thing as a rational investor who can read a balance sheet,

understand an income statement and know what assets are on a bank's balance sheet? >> thank you. dr. sanders and then mr. ely. >> um, again, i see mr. elliott's point. a delay might make some sense. however, the problem is that if you look at many major banks around the world -- europe, the united states -- if you mark their books to market on all their asset-backed securities and mbs, they'd all be insolvent. so i think that signal's already out there. so under those set of circumstances, i don't see the necessity the fed to keep everything blind. >> okay, let's go to mr. lachman. >> i think in this day and age it's naive to think you can keep the markets ignorant to what's going on. there's an enormous amount of chatter that takes place in the money markets and the analysts. but the real downside of trying not to disclose information in any kind of approaching realtime basis is rumors develop.

and so people may make judgments and basically kind of see false negatives in the sense that they will assume that maybe the problem is more widespread or spread to a particular institution when it, in fact, is not. >> okay. >> the downside is not disclosing information. >> thank you very much. my remaining time to dr. lachman. >> i think in the european context the problem's a lot deeper. it's that the europeans have allowed the banks to keep the sovereign debt of the periphery on their banking book at 100 cents on dollar which is patently not correct. so we get the ridiculous result that we had that mr. rosner mentioned that you have a stress test that says all of these banks are just fine because we're assuming that it's impossible for any of the countries to default. so i think that they're not doing a service by being very opaque and actually encouraging

the capitulation of some sort of myth that these debts are going to be -- >> i thank the panel. great panel. mr. chairman, i yield back. >> i thank my colleague. we'll now start a second round. i recognize myself for five minutes. so i guess the question is how large do you envision this swap line, how large do you think it could get? i mean, in the crisis in '08-'09 we hit about 600 billion in the swap line. dr. lachman, what's your view? if y'all could just keep it brief on this round. >> i think that could quite easily go up to 600 billion euro. you know, you're talking about a european banking system that is huge in relation to that of the united states. that you're talking about an economy that's a third of the global economy, that the banking sector is really very important. so the chances of your going to 600 billion dollars, i'm just

thinking in terms of the amount of money that the united states money market funds have parked a trillion dollars. so to get above 600 billion wouldn't seem to me a stretch. >> dr. sanders? >> oh, i agree with dr. lachman. i think, in fact, it could get above that amount and get to the $1 trillion level or perhaps even higher. and, again, the problem is since we're not seeing what's going on in realtime, i know chairman bernanke yesterday said no plans to bail out europe, but again, since it's all off balance sheet and we can't see it, i would say that they probably are going to expand the swap lines. >> mr. elliott? >> short answer is i don't know. i'm not deeply worried about it though. the european central bank is a very, very good credit. >> i don't think you can know until you have a sense as to how they're going to move forward in trying to resolve the crisis, recognize the losses, address it. obviously, from a dollar funding

need at the european, in the european banking system today if we continue on this trajectory, i don't disagree with either dr. sanders or dr. lachman. but it's unknowable at this point. >> sure. >> i agree that it's unknowable. however, the longer these problems continue and the greater the continued uncertainty about the strength of these banks and the apart government -- the parent governments, then one can easily see the amount drawn under the swap lines going up and up and up. so what i worry about as much as anything else is the prolongation of et. when is the fever going to break? when will banks be able to resume or be able to fund themselves more in the private markets? that, to me, is what the real key issue is. and until we get to that point where there is greater market confidence in the banks, we're going to see substantial amounts drawn under the lines and maybe

even approaching a trillion dollars. >> mr. elliott? >> let's say the fed goes beyond simply this swap line which they had in the last crisis, we're expressing concern now based on our view of the survivability of europe and the eurozone as currently constructed what if they go beyond that? what policy options do you think, do you believe the fed has in the event of even greater stress in the european financial marks? -- markets? >> throw out some scenarios that you could envision happening. >> sure. the scenarios i'm going to throw out, i think, are extremely unlikely, and i don't think we'd probably want them to do it. i mean, look, the fed could do the same thing -- actually, i haven't checked legally, but i imagine they could do the same thing that the european, that the various central banks in europe are doing which is find a way to get some money into the imf, for example, or put money, find a way to loan money to the european financial stability fund or something like that.

but i just don't see, nor do i think it would be desirable for the fed to be putting money directly into any of these rescue funds. i think mostly the fed's at the limit of what it can do directly as with regard to europe. obviously, it could do more monetary stimulus here to deal with concerns about europe, but i don't think there's a lot of room to do things. >> well, and, and european banks that have a presence in the united states already have an open line with the fed as it stands now. but there are open markets function because they, too, are american banks. >> exactly. >> could you envision the fed purchasing american-originated assets held by european banks? could they do that? >> i believe they could. i think it's hard to imagine unless they were making the same opportunity available to other banks to sell the same kind of assets.

>> okay. but american-originated, i mean, that would be sort of the nexus there. >> yeah. >> could you imagine a talf-like facility for european assets? european bank assets? >> i think if assets are u.s. assets, yes, i could imagine doing another version of the talf. if assets are basically european-based assets, it's hard for me to imagine doing that. >> okay. i'm just asking scenarios because the range of options. what we saw the fed do in the last crisis, um, and to dr. sanders' point this question about was it seven trillion or was it one trillion or a trillion and a and a half, the real question that american citizen, the average american citizen has is what is the federal reserve doing. and is so this lack of information means that many americans will just simply fill in the blanks, um, on what happens in that black box.

to mr. rosner's point, which is a bank's actual assets and, um, and, you know, as a stockholder of a bank it's hard to tell if bank is doing great or awfully or what the range is in between. so that lack of information, um, that's the reason why i want to at least have some scenarios. so we're not completely surprised by fed -- mr. rosner. >> yeah. i was just going to say in the short term it doesn't seem like the fed is going to have to take a lot more action than they've done with the swap line. in part because, again, in an attempt to kick the can down the road we've seen the european central bank offer 1% money for three years to their banks. it seems increasingly likely that the way they're going to deal with sovereign debt auctions next year is banks within each sovereign nation are going to be increasingly called

on to be the large purchasers of those issuances which has negative implications for economic growth and for the overall economies on the other side as much as they're helpful in the short term. um, but i would think that the approaches to kicking the can are actually going to in the short term ameliorate much further need for u.s. involvement or fed involvement, i should -- >> because the ecb will actually do what's necessary, or will it be the policymakers that are kicking the can -- >> the policymakers are kicking the can x the ecb is at this point trying to step back from the fold and the pressure of stepping in. i think, ultimately, they will end up folding and stepping in a large way. >> well, my time is expired, and i now recognize mr. meehan. for five minutes. >> thank you, mr. chairman. um, sort of where do you jump in with all of this? um, is there anything -- we're

talking here about monetary policy sort of in the current situation, is there anything that's being implicated here by a failure for certain of these countries to really adopt austerity measures that may be able to address some of this or do we need to continue the sort of imf support and otherwise to sustain it from a meltdown? anybody can jump in on that. >> i'll start off. again, to start off at the top, bear in mind that commerce bank is in deep trouble in germany, dexia's gone, credit agricole in france. if we have any of these write-downs, it's just going to sink the european banks which will then result in who's going to come to the rescue. i just don't think this is a solvable solution. greece, there's riots; italy there's riots about austerity. >> right. >> i just don't think it's

solvable. again, it's not a liquidity problem, it is definitely a problem of the fact that they're all insolvent. i mean, the titanic sank in a highly liquid environment. >> well, then if that's the conclusion, then are we just -- if we keep, if we kick this can down the road so to speak, when's the day of reckoning? dr. lachman? >> the trouble is that the road is getting shorter, you know, that we can't keep kicking this can down the road. we're going to come -- my view is that we're going to come to some resolution fairly quickly. it's difficult to see how you can string this along for another year given the state of the economies, given the political resistance to adopting different measures. the point is that a number of these countries are insolvent, but the second point i'd make is you're talking about huge amounts of debt in question. so if we just look at portugal,

greece, ireland, we're talking about a trillion dollars. if you add in spain, you're talking about another trillion. if you throw in italy, you're talking about another two trillion. we're talking about $4 trillion that is going to have to be written down at some stage, so that is going to have a huge impact on the european banking system when that occurs. and given the interconnections between the european banking system and the united states banking system, it's very difficult to see how the united states avoids the financial crisis if you do get europe playing out in a bad way. >> and what would be the specific, what would be the specific implications on the united states from that scenario? >> well, the specific impact on the united states is that united states banks would be put under a huge amount of stress, that you'd have a credit crunch in the united states. the united states would go into a meaningful recession. that would compound the

problems. i think that the way to look at it is like what occurred in the united states during the leeman crisis -- >> i was going to ask, we're right back where we are before. >> -- the same way that ricocheted around the world, now what we'd be having is we'd be having a crisis where the origin was in europe, the world's third largest economy, much larger economy than that of the united states that would have reverberations through the globe, and the united states would be impacted. >> mr. elliott then mr. rosner. >> yeah, thank you. i just wanted to say to give you a wider view i think that the countries that much of the panel here thinks are insolvent aren't necessarily insolvent. greece, clearly. but italy, for example, italy this year is going to run a primary surplus meaning that absent the interest payments, it's actually in surplus. it has had in the past decade a number of years in which the

primary surplus was 4 or 5% of gdp. >> what's that attributable to? >> basically, in the last decade or so they have managed their deficits much better than they had historically and, certainly, far better than us. in the last decade, they had deficits, and these aren't primary, these are actual deficits as we normally look at, they've had deficits lower than germany over that decade, lower than france. so my point about the politics earlier is assuming that italy is insolvent essentially assumes that their political system is so bad they can't find a way to pare a few more points of gdp off of their deficit, and they've shown in the past they can even under worse political environment. >> two things. first of all, just in response to this. you have to remember that we are talking about the problems in the europe, that we're talking about the backdrop of the past three years having had decent growth in the eurozone, and

that's over. okay? they're heading into recession, even the -- [inaudible] is going to be suffering that. secondly, it's important to remember the more recent european bank authority stress tests and the agreement that the banks raise core capital to 9% by next summer, um, are being done in a way that's even more damaging to growth and is going to put more risk -- >> because there's going to be less capital out in the european market? >> well, rather than forcing them to in short order regardless of the dilution issue equity to raise real capital, we're giving the banks enough time that they're going to try and get there by reducing their books, by deleveraging. and that deleveraging is going to create further problems kicking the can further and shrinking growth further as opposed to forcing dilutive equity raises which should be forced. that's where the capital should be coming from, the markets, regardless of price right now. i would point back to our

crisis. had we forced freddie mac to raise equity in january and february of '08 and not accepted their arguments that those would have been highly dilutive capital raisings, we might not have ended up where we ended up. instead, we allowed it to string along, and that had a zombie institution that was fundamentally increasingly taking risks with less economic returns on those risks to cover up or try and hide the problem. so we are now partake anything a game of -- partaking in a game of allowing the european banks to get their house in order by reducing credit availability to the, to the eurozone instead of forcing them to dilute shareholders -- >> that's going to have an impact as well on the overall ability for that economy to -- >> absolutely. which is why, which is why i find it so offensive that we are supporting policies that put the

burden on taxpayers rather than on equity holders, preferred holders, subdebt, unsecured creditors rather than in manners that allow them to negatively impact the economy in another way which is the deleveraging. >> [inaudible] >> if i could just put another angle on this, the problem in many of the european countries, particularly the weaker ones, isn't just the current level of debt and the debt to gdp ratio, but it is the ongoing deficits, many of which are reelect -- structural barriers in the economy, early retirement and so forth. and so these countries are in a situation where it's not only at a high debt level, but it's a debt level that's continuing to rise, and so they not only have the challenge, these countries not only face the challenge of rolling over existing debt, but also having to borrow more and more in order to finance the continuing -- >> that was the implication of

my question about austerity. is that what you're talking -- i mean, that was the language i used, austerity r you -- >> right. now, it gets worse than that. .. >> where i think the real crunch comes is when i country has debt coming to an it simply can't roll it over at any industry. the markets won't bite. this is essentially the same as a bank not being able to roll over its funding. that's when the real -- you get

an honest to god government debt default. >> we get hyperinflation? what would be the result? >> i don't think we can have hyperinflation, because governments don't pay the bills and currency anymore, but i think what happens is that governments, i would think, would be in a situation where they just would have to cut back on the pavement they may, whether they cut back on social security or whatever. they get to the point where i think josh referenced earlier, that's where you start to see the riots. so i think that's a very, very serious concern, wind these countries simply can't, not just roll over the debt, but also ongoing deficits. >> mr. chairman, i yield back. >> this was an amazing exchange, and fascinating, fascinating

discussion. mr. rosner, you mention in your testimony, you mentioned a number of times you belief, many of these european banks are insolvent. so to that point, the ecb actually levied at penalty in order to force european banks to pay off the swap on, the feds want one. would that be an indication of insolvency? they are using short-term paper for long-term debt? >> it could be but it could just be the other side. that could be just liquidity. depends on the front of assets. it depends on the assets. so it's unclear which is again part of the reason it would be nice to understand who was drawing so then we could trace it back, take a better look at the assets they have. if we got those disclosures.

>> but at a time when the fed -- by the way it would be nice to be assured that the fed knows who is drawing on the swap want and what the assets are that the ultimate borrower from these -- >> axley, that point, mr. ely committee agreed the disclosure of those swap lines would be helpful? >> i'm of mixed minds about because our swap is with european central bank. that's our credit risk, it's up to them what they do with that. now, the reason i might agree that it would be useful is to the extent that we're deliberately helping them with their policy, i can see a desire to know what they are doing. but i don't know that we need a level of detail that is being asked for in terms of that. >> even with our u.s. banks have risk, counterparty risk associated with that?

>> that we would want to know in general, obviously. we would want to know, we want our banks have reasonable information about the situation of their counterparties. but there are multiple ways to get that information. it doesn't necessarily have to be knowing whether and when they had been using the swap lines. >> i might also add, the dollar is the world's currency. >> ad hocly to retain the. >> i would love to retain that, too. the fact that there may be, that our european banks who have trouble getting enough dollars in this environment, as josh was saying, it might be a problem of solvency but it might very easily not be. i would worry that, i didn't about the stigma issue, that in this environment, that investment managers who want to keep their jobs by just not taking chances would look at information and say oh, those guys use the swap on, i better

stay away from the but because thing away from them won't hurt me that much in danger if it turns out they go under means i lose my job. >> we're only disclosing, i think the fed discloses two years after the fact. so i don't have -- a year or six months. but certainly i don't have a problem something like to get. i thought you were talking about in this case with the ecb. >> we don't even know what the disclosure of 600 billion, with the swap line at the height of the crisis, we don't even know where that went. that is really the crux of this discussion, the reason why it cannot. mr. ross are? >> i just wanted to say whether fred discloses the information or not i can imagine why the fed wouldn't and shouldn't demand of the ecb to know who's also my drawing up on those lines. so that they can see whether their swap lines which were intended to provide the clarity

and color funding markets were being used to prop up and solvent institutions, whether that is disclosed broad or not to the public is an area that i think deserves debate. i know where i fall on it but i can understand the arguments on both sides, that the fed should not want that information for their own analysis, for their own prudential purposes doesn't make sense to me. >> so here's a broad question. american financial assistance exposure to europe? because the question is if we have an extraordinary exposure, they we have an extraordinary, there'll be an extruded policy desire to bail them out in order to save our institutions. >> it says our banking system not ensures pension funds but banking system has about 2 trillion of exposure, credit exposure for his kind to the

eurozone, or 2.7 i think, to did you get from our i may have it reversed. i usually roll the u.k. into this because it is so closely tied in with the eurozone been that even though they're trying to extricate themselves? >> exactly. if you can bind those that's about 5 trillion but again that doesn't count other parts of our financial system. >> could i answer that? >> your. >> talk in terms of what i call direct exposure, douglas was talking about. what i will call indirect or macro exposure. and that is that if europe really blows up, i certainly hope it doesn't but if it does blow up and to get an enormous economic contraction in europe, that's going to have dramatic global effects on the macro economy, certainly on the united states. and then you ask, what kind of problems, what kind of new problems does that great for the u.s. financial system and the banks? for instance, with regard house prices. will we have rise in

unemployment? we have to be cognizant not only of what i will call the correct balance sheet risk, but in the indirect, potentially very expensive macroeconomic indirect risk deck some of which were all racing as the dollar continues to strengthen, right? the dollar strengthened what negative impact on export markets, and on the other side of positive impact on some our domestic asset prices as capital flows back into the country. so it's very hard to quantify. i would just point out that when we keep throwing out this multi-trillion dollar number, that we also have to remember that that is total exposure need to net out of that private capital, and private capital structures, which i think at some point were there with a priority to capital for understanding that that was risk capital. that capital may end up being like that and needs to be -- assumptions, because i'm not sure it's necessarily prudent for us to consider that obligations that the government needs to consider as oppose to

creditors and shareholders, et cetera. do you want to follow up on that? >> back to a point that mr. rosner raised, which i think is crucial, the idea that european banks do have an enormous holding in their balance sheets, the imf has estimated that number is at least something like $300 billion, and what that is producing, because of the way in which they let the banks get to the capital ratio of 9% by june, is there going to have a capital reduction. they will be reducing credit to the tune of something like $2 trillion of the next year. when you have that kind of credit contraction, at the same time you're asking for countries to engage in massive fiscal tightening, it's the equivalent of tightening monetary policy, tightening fiscal policy in the middle of economic we can.

that is a recipe for a deep recession. and that's the reason that i don't think that this can work. >> to build on what dr. lachman said, the ecb announced yesterday that they will modify capital requirements for the banks in europe are quite? because they see credit contraction being very serious, as we just saw here. and what that means is they will require less capital which you can just excite has institutions more risky which will eventually put american taxpayers at more risk. this is kind of a never ending game. >> they are thinly capitalized going in, because basel says if you're holding sovereignty there's no risk associate with it. it is kind of a passing situation. so, there's so me questions about this. dr. lachman, you mentioned the exposure through the money markets. you know, we had one money

market, one fund that broke the buck. that most investors don't quite understand what a money market fund is, not fdic insured. part of what happened in the crisis is actually making that worse in people's mind that the least some government savior of the money market fund. what is european financial system? our money market funds to their european financial system. >> the estimates made ran about june found -- suggested that unites its money market funds had ran about 45% of their funds on deposit with european banks. the money market industry is something like an industry of $2.7 trillion. so you take 45% of 2.7, you're well over a trillion. what has occurred in recent months is that they have brought down that exposure to 35%, but

that is still a very large exposure. >> it was as recently as 12 or 18 months ago, over 60%, but a lot of that was peripheral economies in your. there's almost no exposures to peripheral economies in europe at this point by u.s. money market funds. it is almost all the court along with some smattering into recently of being different. >> you know, i don't take much comfort in that argument, you know, because if the banks in the court are exposed to the periphery and so are the money market funds, exposed to perfect, they have deposits with the core. >> i agree completely with that point, and would suggest that i made it just to point out that this is not a peripheral problem, as it is constantly being spun. it's a problem of the core banks as much as it is a problem of anything else.

>> okay. mr. ely, you mentioned in your opening, three or four, three out of four chance basically that the euro will survive, to paraphrase you. what is, give me your view on greece remaining in the euro. give me your percentage chance that they're still in the euro a year, whatever the timeframe is you want to choose. >> sure, and just a click any potential confusion, the three and four probability that i put out, which is obviously, it's a quantification of an intuition because this is very, very hard to know. but what i meant was more than just the euro surviving, but that there be no defaults beyond greece. so i made it stronger than you may have seen that. >> okay. >> in terms of greece staying in the euro, i actually think it's pretty likely that greece will stay in the euro, and that there

are a lot of advantages, even with defaulting which they clearly are going to do, whatever it is called, there are a lot of advantages of staying within the euro. and i know dr. lachman very much disagrees with that, but there are pros and cons. most of the people i talked to feel that greece will actually try very hard to stay in the europe. >> okay, but, you know, since greece has become a modern country the last 150, 170 years, they don't really have a great track record on paying people back. that's history. >> they are defaulting but there's no question they're defaulting to i'm saying that's a different thing than pulling out of the europe. >> as a matter of what they call and when it happens, you're saying? >> yes. i don't think there's anybody on this planet at this point that thinks the grateful payback 100 euros cents on the euro, on the debt. we know that's not going to happen.

and then as has been pointed out, there's been is rather dangerous thing of trying to arrange it so it doesn't technically act as a default, which i think has done terrible damage to the credit default swap market. >> and everybody agrees with that on the panel? does anybody disagree that the harm in the credit default swap market is serious when of this type of action? okay. now, so, about greece, okay, it's a question of everybody agrees they will default, is that true? okay. now, it's a question of what they call it when it happens. is that really the question? >> and how much. >> okay. >> if i could add to that, to what extent are the issuers of cds going to have to take a loss. and then you get into another set of dominoes could start toppling, in terms of where is the cds risk on the german debt,

and how are those losses going to get and who are they going to be. i assume it's not just the banks but in shooters coming insurance companies and other types of institution risktakers. that's unknown from what i don't. >> dr. lachman? >> i think when you're discussing greek defaulting on its debts and having a disorderly default and modern default writing down the debt by 70, 80 cents on the dollar, you also have to take into account is the contagion effect that that is going to have through the rest of the perfect the european central bank, for the past year and a half, has been trying to find the idea of the fall because they know that these greece default, what you're going that is the greek banking system wide out. you're going to capital controls, runs on banks and all the rest, that will set an example for depositors in portugal, in ireland and so one year so it's very likely that if

you do get at this orderly greek default you're going to get real pressure on the rest of the periphery that is going to cause a chain of default, and that is the reason that the european central bank has been putting up this fight, which i am very sure they won't win. in the case of greece, is already a matter of time to quit talking about months, if not weeks before this event is going to occur. >> i've heard that one theory that they just need a current account balance, then it is actually in the national interest to simply walk away from their debt. as long as they can cash flow the government in essence. is that similar to your point of view? >> but the question that greece is not in a position to pay the debts, that what is occurring is the last two years, greece gdp has contracted by 12%, the unappointed rate is an 18.5%.

their economy is literally now in freefall. that is the road in their tax base. they can't meet the budget targets of it got to do more austerity, and people are out in the streets. greece is not any position to to take more fiscal measures, and that is, at that stage it through difficult for the imf to keep flowing more and more money at a country that is probably insulted. that is the point at which greece default. and we are not far away from it as, new government, to be new elections roundabout february, february come into february. i would expect that is roundabout that time that you see greece leading. >> so with my accent that would sound like doom and gloom, but you make it sound more upbeat. i'm only joking. so, mr. ely can he believe the imf does need further capitalization. there's this authorization within dodd-frank that discussed

treasury could authorize another 100 billion for the imf, and that legal right, the administration would simply have to make that decision. but your view is that the imf is capitalize, fully capitalized enough to take on what you would view as sort of a crest of this crisis come in your scenario? >> it is my view in this sense, i believe this has to be basically solved in europe. i think it's very useful to have the imf bring in enough funds to be a serious player, but i don't think that is beyond its present resources. >> what is that dollar bought? >> they have 390 billion now that is available, and they'll have more of the european center, if the central banks within europe to contribute to the imf. >> does anyone on the panel disagreed? dr. lachman. >> i think that if you look at the amount of money that the imf would have to provide to italy

and spain if they did the same thing as they did to greece, portugal and i've come to be talking about $750 billion for italy a loan. if you're talking about another $400 billion for spain, the imf simply does not have that kind of money. i totally agree with mr. elliott that the onus of sorting this out should be europe. it should not be the united states taxpayer. what the europeans are trying to do is they're trying to loan money to the imf, get a claim on the imf, and have the imf loan money to italy which would put the united states taxpayer on the hook for a 17.75%, whatever the size of the vote is that i think that should not be permitted. >> the opportunity for china to inject themselves in imf, and put forward, you know, put

forward, you know, the equivalent amount in order to take on that sort of crest, and another 200 billion, let's say, is that sort of in your range of options, or likely? >> that could very well occur, but you've got the same problem as you do with the europeans lending to the imf. if the loans are made in a form that china has a claim on the imf, and the imf then goes and uses that money to lend to italy, that united states taxpayer is exposed to that loan to italy as a shareholder, having 17.75% in the imf. the way those loans should be made is they should be made to an administered account that what the imf is just a conduit and it doesn't expose the shareholders to any risk of those loans. >> mr. ely? >> yeah, one of the things we have to step back a little bit

and realize that whether it's the imf or other lending facility, essential have governments directly or through the imf becoming funders of these really deeply indebted countries. in other words, the private market pulls back, government steps in to the void and feels a bit but as i mentioned in earlier reply, you still have these ongoing deficits in these countries. so all this does is kind of keep the ship afloat for a little bit longer. we are kind of bailing faster but the ship still has big holes in it and is thinking. so the question is, do you have enough time for this liquidity provisions to enable these governments to make the structural reforms they need and get back on track here and i don't think the liquidity can float long enough for these countries to make those changes,

plus we are seeing backsliding in greece. for instance, it's been mentioned are you. so, you know, the question is aubrey really solving anything or a we just digging a deeper and deeper hole with now the taxpayers, not just in the united states but elsewhere, increasingly at risk as we try to protect creditors by the government of being, if you will, picking out if you will, or paying off private sector creditors that have linked to these countries. >> all right, thank you. and i would not yield to mr. meehan, and we will finish after that, just so the panel is aware of our time frame after his line of questioning, we will finish. >> i think you again for your very interesting testimony. mr. ely, that's what i was trying to what you were just discussing, what dr. lachman, didn't you come in your testimony, more or less suggest that the combination of austerity and the growing

challenges in greece make them incapable of taking on more right now let's and we're starting to see this potentially then, those same demands as we talk about austerity, if you move them into ireland and italy and other kinds of places, this becomes a cascading effect. is that what we're seeing? >> i will let desmond speak for himself, but i think it is a very sous risk in the most indebted other countries who are experiencing the greatest degrees of austerity. all the negative consequences of that, rising unemployment and declining tax receipts, and increased government spending. it just means that the deficit, deficit in these countries just continues on, and that means they have to borrow more. they are get dashed in their debt to gdp ratio goes a. how and find next month deficit?

>> i would say that the problem, it certainly extends beyond greece, that countries like portugal and ireland are in not that much better shape than greece and italy and spain, their positions are stronger than greece but they conceptually have to do the same sort of thing that greece had to do, which is tied to the budget by a large about. we talked about 2% of gdp in italy. in 2012, again 2013, again in 2014, and as josh rosner was pointing out, they are having to do in the context where there is a credit crunch and where there is a deterioration in the environment. so it remains to be seen where countries like spain and italy can withstand many years of fiscal austerity, declining growth, rising unemployment, calls for more austerity, the social fabric generally doesn't

hold up well to this. it's just a know, that early in the crisis we have seen five governments fall in the five affected countries. so i'm not sure that they can stick to this road of austerity and pretty poor economic outlook for a very long time, when would be perceived the reason they are doing this is to keep the banks in france and germany a float. >> can i make one quick point? to the government that fell was replaced by government that was more favorable to the austerity measures. >> we've talked a lot about, i just really have to of the questions. we've talked a lot about this in the context, as i've been following this, europe having to deal with its internal crisis, and its relationship back to the united states because of our involvement with supporting the

imf and, therefore, assuming some of its responsibility. i also take from this that we are worried about the recessionary implications in our own economy if we have problems in europe. how about other thriving come or thriving other economies? the asian economy am south america. are we watching them being isolated in any way, or are they similarly going to be impacted by this and effectively we are seeing the front end of a global recession? and please, you know, jump in. >> i think that's an important point to raise because i think that is another piece of it. you know, large portions of the chinese economy are funded through european banks. europe is obviously china's largest export market. much of the south and central american economies are funded also through european banks.

so it definitional he is a global crisis. how deep it impacts areas, parts of the globe are obviously going to be different, independent on the outcomes here. but it certainly is worth considering, and is far more than just as european crisis, especially since many of those economies to which we export, to the degree that we do, get their funding from europe. >> if i could just add to that i think it's not just a funding issue, but particularly for china it is also a social unrest potential. because again, they export so much to europe and, of course, the u.s. and if we have a slow down, between europe and u.s., it will have a negative impact on china, on its levels of employment. and i've always been concerned about china being somewhat of a tinderbox. amazing how often when we read of local disturbances in china. so there's a fabric bear that is

not a socially strong as it is in this country. so i think we do have to worry about those secondary and tertiary effects. .. >> on some extent on these kinds of things. so my questions relate to how is the everyday american who has some portfolio of investments going to be impacted by these things, and do we have impacts

on our pension funds or any other kinds of insurers like we had with aig that aren't really being considered as, or being discussed as much but may have genuine exposure? so this is the last question that i have -- >> i'll take a stab at that. you know, ultimately, individuals are the owners of the economy. there are various levels of financial institutions, and you've rattled off insurance companies, pension funds and so forth. to the extent that there are capital losses borne by american financial institutions, that's going to reverberate back to individuals either in terms of losses in their own portfolio, a hit on let's say corporate pension funds, union pension funds, a broad range of financial intermediaries. but ultimately, that loss is going to come back to

individuals and families and countries. it's unavoidable. there's no someone standing behind the curtain that's going to absorb those losses. they come back onto us, everybody in this room. >> yeah. and if i could emphasize a point that i'm sure we all agree on, the indirect effects will be larger. if you think about what it would be like to go through another recession after we're still in this very slow recovery, that's going to have bigger direct market impacts. >> and i want to add one other thing. i do agree with mr. elliott, but if you look at my figure 11 in my presentation, the fed is literally out of bullets. we're not going to have really a great ability for the fed to step in and provide any sort of intervention or the government issuing more treasuries. it just isn't affecting gdp anymore. we're kind of numb to further government intervention. so now we're in a rock and a hard place. >> well, on that bright note, mr. chairman, i yield back.

>> i thank my colleague, mr. meehan. thank you so much. now, i said that was the end of the questions. i have one more, if you don't mind, and we'll just start with mr. ely and go across. tomorrow we have president dudley of the new york fed, we have the individual federal reserve board downtown here who deals with international markets, we'll also have a representative from treasury. i know it's a long commute from them. they're even closer than the fed. but, and certainly closer than new york. but, um, what questions would you ask tomorrow? what question if you had to boil t down would -- if you had to boil out down would you ask in tomorrow's hearing? >> the question i would ask is, ladies and gentlemen, how is this going to play out over the next six month toss a year? now, i don't expect you to get a very candid answer, but i think

that that's the question. what are, what are various scenarios as to how this situation can play out over the next six months to a year, and what are going to be the feedback effects -- what will be the feedback effects on the u.s. economy. >> mr. rosner? >> um, i provided specific questions in my testimony. >> yes. what's your number one? give me, you know -- >> well, what comfort do they have that 17 countries each with different political dynamics at home are going to be able to come to a solution, and what is the purpose of their policy tied to that short term, medium term, long term, what is the fed's policy purpose here in an environment where while most of the 17 leaders actually do have some agreement as to what they'd like to see have happen, they have very different social

dynamics in their home countries with their populations' constituents making it difficult to achievement and that. so what is the purpose of fed policy and treasury policy in the short term, the medium term and the long term as it relates to the single currency. >> okay. mr. elliott. >> i think if i had one question, i would ask them to talk about the solvency versus liquidity question. do they believe that the weaker countries in europe like greece are suffering from a liquidity problem, or is it a sol seven si problem? and i assume they're going to say liquidity, and then the follow-up question would be how do you come to that conclusion. >> dr. sanders. >> i would ask the fed if you had one bullet left, would you use it for the american economy? not to shoot ourselves, i meant to help us out. [laughter] or would you use it for europe? and then for the treasury which

i'd be most interested in hearing, i want to hear their assessment, and i agree with dr. lachman, i had the same calculation. $4 trillion is really the tab to really bail out italy and those peripherals. and if we're talking about 100 billion to an additional 200 billion, is that like throwing the money away, or is this going to end up being a much, much, much bigger amount? and i don't want to say that'll never happen. come on, we've already seen a lot of bad things happen. >> dr. lachman. >> i would just suggest a couple of questions. one of them would be the variant of mr. elliott's solvency versus liquidity problem. i would phrase it differently. i would phrase it why do you expect imposing fiscal austerity on countries at a time of economic weakening and a time of major credit crunch in europe is not going to lead to a big recession that is going to unravel the public finances of

the countries involved. a second question i would ask is why do they think that a policy approach to italy and spain that they've tried and has failed in greece, portugal and ireland is going to work this time around. and i guess the most important question i would want to ask would be how are they going to be safeguarding united states taxpayers' money from these loans that the europeans are making to the imf which is putting the u.s. taxpayer on the hook if that money is then used to lend to italy and spain. >> okay. um, quite, quite a number of questions. what is clear about this hearing, and i thank you so much for being here, um, this is very helpful, very useful information and a very wide-ranging discussion, and i appreciate the panel's willingness to engage in that conversation. um, what is, what is clear is

there are an enormous number of questions that experts have about fed policy and about this administration's policy about -- and exposure and the american taxpayer exposure to the european financial crisis that they're facing. and it's hard to -- dr. sanders, in your opening, this was about excessive government spending and excessive debt. as long -- as well as what mr. rosner said, this was about overlending and overborrowing. and, you know, one is more focused on the government, the other is more focused on the banking and the institutions. um, but the economic risk is real to the american taxpayer. it's a question of the magnitude of that risk. our exposure to europe is real both to the american taxpayer and these institutions such as the imf as well as to the american worker and their

ability to get a job and to have a growing economy. um, but there is some consensus here about the likelihood of a greek default. the question is, what does that look like, when does that happen, and what is that raw cost in terms of current i? -- currency? >> but, obviously, a mixed assessment on the survival and the ability of the euro to survive in the medium and long term. there is not consensus there. um, but this has been very helpful and very instructive. i appreciate your time and, members, we'll have seven legislative days to submit opening statements. and with that, this meeting is now adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> is there anything -- we're

talking here about monetary policy sort of in the current situation. is there anything that's being implicated here by a failure for certain of these countries to really adopt austerity measures that may be able to address some of this, or do we need to continue the sort of imf support and otherwise to sustain it from a meltdown? anybody can jump in on that. >> i'll tart off. i'll start off. again, to start off at the top, bear in mind that commerce bank is in deep trouble in germany, dexia's gone, credit agricole in france. if we have any of these write-downs, it's just going to sink the european banks which will then result in who's going to come to the rescue. i just don't think this is a solvable solution. greece there's riots, italy there's riots about austerity. >> right.

>> i just don't think it's solvable. >> here's a look at what's ahead today here on c-span2. next, a tribute to former kansas senator and republican presidential candidate bob dole. then a look back at political leaders who have passed away in the past year with historian richard norton smith. and later the u.s. senate gavels in for a short, pro forma session with no legislative work scheduled. >> you can join us today, later tonight when booktv will focus on former george w. bush administration figures. our prime time schedule kicks off at 8 p.m. eastern with donald rumsfeld, the former defense secretary talking about his memoir, "known and unknown." then dick cheney and "in my time." and later or, condoleezza rice talks about her book, "no higher honor. q. >> and a look here at des moines, iowa, where the first in the nation caucuses are a week away. three republican presidential

candidates campaigning with their bus tours in iowa today. congresswoman michele bachmann, texas governor rick perry and former house speaker newt gingrich all touring some of iowa's smaller towns as the ap reports looking for supporters one at a time and hoping to present a challenge to front runner mitt romney. the former massachusetts governor is also scheduled to return to iowa today after having visited new hampshire where the primaries will be held in two weeks. and you can always follow the candidates on their road to the white house online. just go to c-span.org/campaign 2012. >> our coverage from iowa continues later today when we're covering an occupy des moines meeting, and we'll have that for you later in our prime time schedule. and just a reminder that for all things campaign-related, we've got a clearinghouse available for you online. from the trail speeches and town hall meetings, also links to the

candidates and related editorials and endorsements. former kansas senator and republican presidential candidate bob dole was honored in october this year at a gala celebrating his public service to the country. former and current lawmakers were on hand to salute him including his congressional colleagues, donald regal and jim flattery. pat roberts and health and human services secretary and former social security governor kathleen sebelius. mr. dole served as u.s. senator from 1969 to 1996, and from 1985 to '96 he served as the senate republican leader. this tribute is about an hour and 15 minutes. [applause] >> bob, kansans trusted you to represent them in washington for 35 years. and you never betrayed their trust. and many of us wish that you

were still a leader in the united states senate, right? [applause] how wonderful it would be to see senator dole working his magic in the united states senate today. and, bob, i remember in 1983 i had just gotten elected to congress for the first time. candidly, i was looking over my shoulder at you wondering how bad and how hard senator dole would come at me in the next election out in kansas, and it was interesting because our first vote, the first tough vote we had was the social security reforms of 1983. and i've often thought about back to that time and sort of compared it to today because the social security trust fund was bankrupt, they were saying that checks would be late by april or may, and everybody was a little nervous. and that's putting it mildly. a lot of people were just

terrified because they knew what had to be done. they knew that we were going to have to change the eligibility age which we did, we raised it. they knew we were going to have to cut some benefits, which we did, and they knew we were going to have to raise some benefits, which we did. and senator dole joined then with president reagan, speaker o'neill, danny ross tan cow sky, chairman of the ways and means committee, and led us through that mess and that challenging time. and one of the things, bob, that i will always deeply appreciate about you is that, yes, bob dole was a partisan leader. that was his job. but the thing that i deeply respected about him was when the doors closed and the tough decisions had to be made, you could always count on bob dole doing the right thing. you could always count on bob dole looking at the facts and doing what the facts required. and i think the reason he did is because this man loves this country more than he lo loves

his political party. and that, to me, is the sign of a great patriot, and that's what i consider you to be, bob. [applause] let me just conclude because bob said don't talk more than two minutes. [laughter] but i don't know whether i've gone over that or not, bob, but let me just say that i salute bob dole for what he did on the battlefields of italy in world war ii. i salute you for 35 years of remarkable public service to the people of kansas and to the people of this country. and i also salute you, bob, for being one of the toughest human beings i've ever met. [laughter] [applause] and i, i also want to say that i salute this man because he has a heart as big as kansas. and that's the thing that i really, really appreciate about

him. bob, i treasure our friendship, friend. thank you for being here, thank you for supporting the dole institute. [applause] >> ladies and gentlemen, please, welcome former u.s. senator don regal. >> well, i'll tell you this, if bob was the leader in the senate today, there'd be a lot more happening, i can speak from experience in that regard. [laughter] and i want you to know, bob, that pete domenici yielded me his time when he left. [laughter] i'm not going to use it all. i want to maybe start with that wonderful tribute that elizabeth gave to you in the other room because, um, we'll all say certain things and, hopefully, some things that are a little different from each of us, but her words of tribute, i think, are going to be hard for any of us to match. only a very select few of our national leaders in our long

history as a nation ever rise to what you would call a truly extraordinary level of public achievement over their lifetime, and you have one sitting here in bob dole. if you think back in the last 150 years, not a very big group that you would probably name to put on a list, and he's one of them. i've been very privileged to serve with bob in both the house and the senate, and it may sound hard to believe, but it was 44 years ago. 44 years ago in the u.s. house as fellow republicans we first started working together. and then later for 18 years in the united states senate. um, at that time we were in different parties, in the house we were in the same party. but i've been privileged to see firsthand both places his exceptional intellect, his leadership skill and strength -- there's nobody stronger or

tougher -- his decency and his razor wit and his unswerving commitment to the broad public good. and that's why this institute is so important to try to infuse in other young people and thoughtful people the need to take and make this democracy, this self-government work and work the way it ought to work. and because nobody's got a monopoly on all the good ideas or all the good ways to solve problems. and so we've got to learn how to sit down together and talk it out, and we'll at least find the best answers that way. i believe bob would have been a great president. i think he would have been a great president because of his sheer talent and advertise goodness of heart -- and his goodness of heart. and i think he would have used those things to guide this nation. i think he would have done it with a very deep belief that in taking our country ahead we don't leave our wounded behind. whether they're in our society with disabilities or without

food or they're returning veterans needing our help, in each of those instances and many others he personally led the fight to help all of them advance and have a decent chance to lead a full and productive life. what better work is there for any of us to do than that? i know for a fact that the passage of the americans with disabilities act would never have happened without bob's leadership. so when you see somebody in a wheelchair or somebody else that's got a difficulty able to move down the street and come down off a sidewalk and cross the street and go and do what they're about to do, think of him because we wouldn't have the situation we have today, as much improved as it is, if it weren't for him. so he cares about people, and to me, that's all people and especially the little people. and we need more political leaders like that today who think and act in terms of our whole nation and not just part of it. he's also supported the basic

needs of people in need in other countries through the food for peace program which has now serbed, get this, over three billion people worldwide since its inception in 1964. his commitment to global food security was awarded the prestigious world food prize in 19 -- or in 2008 along with senator george mcgovern. as great leaders do, he attracted truly great helpers along the way. sheila burke is here tonight and marshall harris and others, and that great staff guy that you've got that got everything arranged here. and, of course, the enormous love and sustaining support from elizabeth. and many others that could be named. i want to thank all of you here tonight for supporting the dole institute. it's one thing to say nice things, another thing to get out your checkbook and write a check to make the thing happen and to give it the life and the sense

of urgency and purpose that it needs. i want to also note this. his long and successful effort to build a world war ii memorial on the mall to honor the sacrifice of what many have called the greatest generation was not about bob dole. those of us who know bob dole know that. he has never wanted or needed monuments to himself. his legislative and public service record are the indelible marks that he's left, and they're there for all to see. with the world war ii memorial, his purpose was to recognize and honor all those anonymous legions of men and women, dead and alive, who served and who by their service saved the future for all of us and for all of mankind. he wanted us to remember them. and more than that, to be prepared to make our own investments and sacrifices when we're called upon. that's what it's all about, and that's what he's all about.

so he's made a giant mark for the good on the important history of our country. he's answered every call to service. every single one. so he deserves the honors that he's getting tonight and on other evenings. and, bob, in the rotunda of the u.s. capitol and for those of you that may not have had a chance to see it up close, there now stands a wonderful statue of former president gerald r. ford. and i urge you when you're there the next time to stop and walk over and take a close look at it, and take a look at the quotation from former house speaker tip o'neill that's on the base of that statue of ford. it's on the left side of the base, by the way. [laughter] but it's a truly wonderful bipartisan tribute to gerry ford for his great decency and his effective leadership in pulling our nation together at a difficult time.

and to me, when i saw it and read it -- and i've seen it and read it more than once now -- it says so much about how things should work. in our congress, between our parties. the way bob dole made them work. and i mention this about gerry ford because tip o'neill was right about ford. and we saw that gerry's choice for vice president, his running mate in 1976, was the man sitting right here. so tonight we're all privileged to be here at a gathering if for a special man, and it permits us to join in the task of carrying forward his work. thank you for coming. [applause] >> ladies and gentlemen, please, welcome the secretary of the department of health and human services, the honorable kathleen sebelius. [applause] >> mr. leader, it's my great privilege to have a chance to join with fellow kansans, with

wannabe kansans -- [laughter] with illustrious members and former members of the congress and the senate who had the privilege of serving with you. um, i want to also bring greetings from, um, another former governor of kansas, mark parkinson, who is here in the audience tonight and wanted to be here as part of this tribute. you know, i was thinking listening to jim slat erie and don riegle that i have a father who served in the second world war and then went from military service to community service to public service. i was privileged to marry into the sebelius family and, also, my father-in-law went from military service to community service to public service. and that's exactly, senator dole, what you did. and it is one of the great

attributes that we have in kansas. i think the embodiment is the dole institute. and your belief that public service is honorable to engage students in a robust discussion to make sure that the young people of the next generation understand that civility and humor and intellect are part of what we need in this democracy. you are a leader in that regard, and for that we will always be grateful. i have the opportunity also to thank and introduce the chancellor of the university of kansas, my alma mater. i may have been brought to kansas by a wildcat, but i went to ku. [laughter] and on the eve of the sunflower showdown, you know, we're here in washington with great civility. [laughter]

senator roberts couldn't figure out what the right color was for tonight. [laughter] but -- [laughter] bernadette gray little came to ku as chancellor, as the 17th chancellor just after i left the office of governor in august of 2009, but she was in that active search while i was till very much in the state, and i watched people screen a whole variety of candidates and feel that they had by far the best leader we could have at the university of kansas when they chose chancellor gray. and i've been able to watch her and interact with her in the two and a half years she's been in that position and watch her continue to grow the university, to reach high marks, to make sure that the university of kansas excels in all of its efforts and particularly to

focus on the dole institute as a vibrant heart of a democratic dialogue in the great state of kansas, but also watch it in the leadership of it being take on the a national level. the dole institute is renowned all around the country. lots of people envy the fact that we have that kind of institution in lawrence, kansas. certainly, they don't have a bob dole in various states in the country, but they also don't have a dole institute, and i want to personally thank the chancellor for making sure that stays a very vibrant institution and introduce the chancellor of the university of kansas, bernadette gray little. [applause] >> thank you, secretary sebelius. it is a great pleasure for me to be one of the guests here, to be

a guest not just from kansas, but to be here to represent a person and an institute that is important to our nation and to the world. and to also honor someone who is one-half of a true d.c. power couple. [laughter] the university of kansas is proud to host the robert j. dole institute of politics, a vibrant center for honoring and continuing senator dole's service. when he first started discussing the creation of the dole institute, senator dole made it clear that this wouldn't just be a repository for records and memorabilia. he wanted it to be an active, engaging place, and ku has made sure that it is just that. the institute features one of the largest congressional leadership collections in the country documenting the political career of america's

longest-serving republican leader in the senate. the archive cob tapes -- contains 34,000 separate files with nearly 700,000 documents and has welcomed researchers from as far as britain and france. in the past two years alone, the dole institute has featured 146 programs. there are forums, events, seminars for students and educational sessions for the public all designed to bring more people into the civic and civil discourse that the doles have committed their lives to. we've hosted presidents of the united states like george h.w. bush and bill clinton. and of foreign nations like poland and the ukraine. we've hosted leaders in government and politics such as former mayor and california house speaker willie brown and then fdic chairwoman sheila

bare. sheila bair. like secretary sebelius, sheila bair has the distinction of being both a ku graduate -- a very high distinction -- and of being recognized as one of the most powerful women in the world. and we've hosted reporters and commentators such as bob woodward and david broder. one of broder's last public appearances was at the dole institute. we are also home to the dole fellows program where practitioners hold seminars for ku students giving them the opportunity to learn firsthand from leaders in the field. those fellows are bipartisan and have included people like former congressman dennis moore and walt liker, press secretary to senator dole. i would encourage you to compare the quality of programming at the dole institute to the institute of politics at harvard. and i know you will be impressed. with the dole institute when you

do that. all of the events that we hold are free and open to the public in keeping with the institute's mission of expanding civic engagement. that's possible because of the support from the university and from the generous contributions like those that you have made, those of you who are here have made this evening. so on behalf of the university and on behalf of the dole institute, i want to thank you for your generous support. it's also possible because of the generous personal contributions of the doles themselves. with bob dole being honored as a ku endowment life trustee. you know all of the events that i've been to, of all the events that i've been to at the dole institute, one of the most inspiring is the annual swearing in of new citizens, and i make sure that whatever is going on that i get to that event. i had the opportunity to attend

this event each year since becoming chancellor, and it is truly fitting that the newest citizens of our nation take their oath of citizenship in an institute built by and in honor of someone who devoted his life to defending and serving this nation. in recognition of that service, i want to personally salute a man whose leadership has changed this country, has changed countless lives, senator bob dole. [applause] >> ladies and gentlemen, please, welcome senator pat roberts. [applause] >> ladies and gentlemen, the high road of humility is not bothered by heavy traffic in

this town. [laughter] but i feel very humbled to be here on behalf of my leader, a great senator and a great man and my friend, bob dole. i have several little housekeeping duties here. squire, where are you? squire just came in. senator warner, where are you, sir? >> [inaudible] [laughter] [applause] >> he's sneaking up behind you, bob. [laughter] you have to show your face, john. >> [inaudible] >> that's required. [laughter] right over there. all right. all right. and the other note i have, chancellor from the president of the university of missouri and the curators is down here. we have yet to make up our mind. i'm sorry about that.

[laughter] well, as henry viii said to one of his wives, i won't keep you long. [laughter] or as anthony said to cleopatra, i'm not here to talk, and she reportedly replied, well, i'm not prone to argue. [laughter] so let's think about that. come on, you're from ku. you're supposed to -- [laughter] you know, we get that out at k state, but anyway. /. [laughter] bob -- hold it down. [laughter] i'm just going to give some random chips off of the old russ townesly block and, rustle, just a couple of experiences. everybody else has waxed poetic and told the truth about you, so i think it's my turn. my first, my first meeting with bob dole was 1959. i was a lieutenant down at

quantico in the united states marine corps, your 9/11 force in readiness ready to put cold steel on the enemy at anytime. [laughter] and at any rate, i walked in with my dad, wes, and pop leaned over to me, and he said you're going to meet the greatest potential candidate that you will ever meet. and bill katz was there, your longtime administrative assistant, and out came bob. and it was sort of a combination of george clooney and tyrone power. [laughter] for those of you who don't know tyrone power, a pretty nice looking fella. but at any rate, i had a talk with bob, and he took time to talk to a marine which was a little unusual being from the army and everything, but at any rate -- [laughter] i was tremendously impressed, and pop was right. and you see what has happened in regards to his public career. and what a great career and what a great time we've had. i was privileged to be the administrative assistant to

frank carlson and to keith sebelius, and then on my own in the house serving with jim and others of the delegation. and we had a great time. and the security wasn't quite as tight as it was, as it is today, and i just cite bill wallford and claude alexander and bill katz and bill taggert and trudy and, of course, sheila burke who i would always go on the floor and say what kind of a mood is he in, and she would say what kind of a mood is he ever in? [laughter] that's the way you got things done, you know, back in those days. we had a time when, we had this crazy guy that came in with a cowboy hat from texas, where else, and so he came in, and he had this box with him. and he said i have to get this box to henry kissinger. and keith sebelius said i have

to go to a committee member, i've just got the man for you here, pat roberts, who's a former marine. and he's got a top secret clearance. so this guy opens up this box very carefully, and i'm looking in there what on earth is this, and there was a huge, huge ball of tinfoil with little flashing lights, and i said, wait a minute, i just have a top secret clearance, this is much higher than that -- [laughter] i said, please, shut that. i shouldn't even be seeing that. but there is a guy, there is a guy that you should go meet. and that's bill katz and bill taggert over in bob dole's office. [laughter] so he said, really? i said, yeah, bob dole. bob dole, okay, yeah, sure. i said, now go over there, just worry about security, just say that it's cleared that you're going to see bill katz and you're going to see, you know, taggert. so off he went. so then i called the secretaries over there, i said we've got a guy over there with a big box, he's going to make a great big contribution to bob. [laughter]

and so in he went. [laughter] and then i didn't answer the phone to bob or bill or anybody in the dole office for about three days. [laughter] i tell you how we got things done. right in the middle of the grain harvest, the federal grain inspection service had a wonderful idea, we're going to change the criteria by which the grain truck goes over the scales. at any rate, what a stupid thing to do. l but at any rate, that was their new criteria, and they had stopped the kansas harvest, boom. well, by that time i thought i was somebody, i was a member of congress, so basically, i decided, well, we've got to put a stop to this. and i knew that the meeting was being held at 10:00, and the fdic was telling all the farm organizations and commodity groups, sorry, can't change the criteria. in pops roberts. and so i pop in, and i say excuse me, excuse me, congressman roberts on the house ag committee. i don't mean to interrupt, gentlemen, but you, sir, and you, sir, you're to be over at

bob dole's office at 1:00. [laughter] and i want to tell you, he's not happy. [laughter] and i want to tell you, i've never seen him so frustrated and concerned and angry as stopping the kansas wheat crop with this ridiculous criteria, so we'll see you at success and just make sure that you be there, thank you very much. got in my car, went over to the senate side and went up to sheila and said, how's he feeling? [laughter] tugged on his coat and said we've got a heck of a problem, bob, the kansas wheat harvest is stopped, and the ftis is coming up, and they're going to meet in your office at 1:00. he says, get another room. [laughter] then about 12:15 the same principals that were going to come to the meeting called me up and said you can tell the senator that we'vewayed this, there's -- waived this, there's a moratorium now until after the wheat harvest. so roberts, of course, writes a press release taking credit -- [laughter] but this is, this is the kind of

guy that he was. and so all of us on the house side, or at least myself, i would sort of assume, they would assume that whatever i was for, bob was for. and so consequently my leverage went way, way up, and we got some thing done. [laughter] now there's a another little story, then i'm going to quit. bob, i think this whole thing started when our national committeeman and a great, great individual and the editor of the phillipsburg daily news, while huck was going from toe peek ca up to phillips jr. burg, and he was driving along in his ancient cadillac, and all of a sudden saw a light on the second nor of the county courthouse in russell. now, during those days what you would do is stop the car, go in and turn off the light. i mean, you can't want to waste any energy. laugh as a matter of fact, it's mandated now by the administration you have to do that. anyway, so huck stopped, he goes in the courthouse. he never bet bob, and goes into

the courthouse, and there he is slaving away about 10:30 at night doing his job as county attorney. huck walks up and says i'm mcdill huck boyd, i'm the national committeeman for the republican party in kansas, and he said who are you? i'm bob dole, county attorney. huck later told the story that he said, you know, you ought to think about running for public office. and he says, well, i don't know if i'm a democrat or republican. and huck said, well, it's about five, six to one republican out here, and bob says, well, i think i'll be a republican. [laughter] but in honor of that tremendous first meeting that really started bob and bob and dean evans, sam's dad, and huck boyd, they were the godfathers really. there were many other godfathers and godsons around here that have, you know, coming out of the woodwork. but any rate, it was a great

expanse, bob, and i want you to have this. this is the last three-way lightbulb available in the senate. [laughter] [applause] and it does give off heat, but i don't think they can detect you quite yet as the source, so i'm going the give that to you so that you can read to your heart's content should you want to do that. you know the other ones we have to buy now, they're the little squiggley things, iridescent, can descent light that you can't read by in the bathroom at the vfw. [laughter] anyway, this is the light lightb that started you, and that's what i want to give you. there's one other thing. i go as jerry moran does, every time bob goes down to the world

war ii memorial, his memorial -- he won't say that, but that's whats it is. he's a rock star, an absolute rock star. and these folks come in from all parts of kansas, and they have young people with them, and they write down the memories of these veterans that have never really talked about this before, put it in the paper, and that history is preserved. now, i've been waiting, and i know that you either stay away from him quite a bit and say there's bob dole, or you stand right with him, and then you're part of the rock star group. what is it in a man, what is it in a man that would have people come to him from that memorial, some walk, some walk pretty slow, some don't walk and come up to him with tears in if their eyes and say, there's bob dole. look, look, look, look, look, guys, there's bob dole. and they swarm to him. bob, you have a gift. you have a gift. you have touched so many lives and made them better, and we

thank you for that. god bless you, sir. [applause] [applause] >> [inaudible conversations] where is it, mike? it's not long so -- [laughter] well, i think i can make my remarks in a couple of minutes, but i want to thank you for being here, i want to thank tom donahoe who i've known for a long time, president of the

chamber, for letting us use these facilities and my friend, ralph lundberg, who works at the chamber. not a very high position job. and a lot of people in this audience used to work with me in the senate and the house, and nobody here worked with me in the kansas house. that was 1951. [laughter] but, you know, i've had a great experience in politics, and it was all by accident because we had a democratic law library at washburn named beth bauers who passed away about four years ago who was telling me that more young people ought to get involved in politics. and she talked four of us into running for the state legislature. and i got elected. and i didn't know much about politics. i think pat was right, i didn't know which party to belong to until i looked at the

registration numbers. [laughter] and it was a great experience. i really enjoyed it. i think the only law that was passed, i remember we got a law passed that gave disabled veterans a preference in parking. where they could park in certain spots which would make it easier for them to get into the store and all of that. so not a very big legislative record, but i enjoyed it, and i decided, well, maybe i'll run for county attorney. they were having trouble finding anybody. and so i spent about eight years in the county attorney's office, had a perfect prosecution record. we never prosecuted anybody. [laughter] it was always pretty quiet out in russell, kansas. [laughter] and then when i left, i mean,

when i was there, every lawyer in town wanted to be county attorney. and i think i ran against seven different democrats and republicans. and when i left, they had to draft someone to fill the job. that's a true story. herb holland who is a friend of mine, democrat friend of mine who also became county attorney because they couldn't get anybody else to run. and that's sort of how you get started. and then a fellow named wince-smith who nobody knows here, but he was about another foot taller than me, always had a big hat on, and he was representing the sixth congressional district. we're down to four now. and he was going to retire from congress, and so it opened up a seat. and we had some good friends and good candidates, keith sebelius was one, phillip doyle was one,

bob dole was one of the people running. and i could go on. but people didn't know the difference between doyle and dole -- [laughter] so we served pineapple juice all over kansas -- [laughter] and i remember when the race was over, keith said you drowned me in pineapple juice. [laughter] and then keith came back to be a great congressman and a real friend. but, you know, i've just had a lot of many friends in my little hometown got me sort of started in politics and then maybe in my state got me started in politics. and i think i learned a lot in the hospital after world war ii about, you know, getting along with people who had different problems and different

attitudes, and you learn if you work together, you might get something done. i remember dan inouye who was one of the -- the best bridge player in the hospital in battle creek, michigan. he weighed about 93 pounds. he's since put on a pound or two, but -- [laughter] but he was a very close friend of mine, and we both came to congress about the same time. in fact, he tells the story that i told him in the hospital that we both ought to run for congress, and i'm not sure i ever said that, but if it's all right with him, it's all right with me. [laughter] but he got -- anyway, that's -- and then a chance to replace senator carlson who was one of the most decent men you'll have ever met during his lifetime from concorde ya, kansas, and they're honoring him, i think,

next week. some special program for senator frank carlson. and he sort of decided, i think maybe pat helped him out a little, that maybe i should be the republican candidate. and so i was the republican candidate and was elected and served, what, five terms? something like that. [laughter] i left the senate voluntarily, but i didn't leave politics voluntarily. [laughter] i kept asking clinton, i said, i think there should be a recount. [laughter] i kind of feel in some of those states, you know, if we had a recount, i could be president. but in the meantime, we have become great friends and get along. and i guess all i want to say

and then i'll sit down is that, you know, i've found in my political life the one word that means a lot is "trust." you've got to be willing to trust one another if you're going to get anything done. i mean, if i tell you i'm going to support this and that's all, you know, nobody's going to, you're not going to get anywhere. you've got to have a little flexibility. and that's what everett dirksen said. he said, i'm a man of strong principle, one of them is flexibility. [laughter] and he's right. i mean, you, sometimes you have to give a little. and ronald reagan used to say get me 70, 80%, and i'll get the rest next year. [laughter] so he wasn't as hard right conservative as some people portray him as today. but anyway, that was a great experience, and then i left the

senate in june of '96, and it was, it was kind of a tearful departure because, you know, you've got a lot of friends there and a lot of staff, and if you don't have good staff, you don't do a good job, and i had a good staff. and some, as i said, some are here this evening. and they never got any credit. but they did most of the work. but i do think keeping your word in whatever you do is vital. i remember one day on the senate floor i offered an amendment to a bill, and it was not controversial. it was passed easily, didn't even have a vote, had a voice vote. and then i heard that tom daschle had wanted to offer that amendment and thought he was going to have that promise that he could offer. and i've checked and found out

that he was right. and i was wrong. so we did what we call vitiating all the proceedings and just sort of wiped it out, and then tom daschle got up and passed his amendment, and everything was fine. and tom was a good friend of mine, and i think, i don't know, it just seems to me that some of that's missing today, some of the trust and some of the friendship, and i don't want to criticize a place that i was a part of for 30-some years, but i think we can do better. and i believe we will. people are going to rise up on the democratic and republican side, and there are going to be leaders on each side who are going to say let's, you know, i can't get it all, but i'll take x. and the other side will say, well, i don't want to give all

that, but i'll take xy or something, i don't know. you know how it works. and my famous quote was i'd have a meeting of all the people working on the bill, and i would just say work it out. you get it worked out, come to see me. [laughter] and it worked pretty well. [laughter] and we got a lot of things worked out. i can't read this. i know it's a great honor to be in the senate, yeah, i remember that. [laughter] oh, yeah, this old institute's a great place too. [laughter] [applause] and, so i took care of two pages. [laughter] and i would just close by making

certain if you have any doubt in your mind, none of the money raised here is going to end up in any political campaign. it's going to end up in the dole institute of politics, and that's where it belongs. i mean, we were all young once, it's harder for me to remember than you, but it means a lot to young people to have this experience. and it doesn't mean much to them if they've got to go, if we're going to make this a bob dole republican policy group or somebody else a democratic policy group. and so we do work on a bipartisan basis. barbara's here somewhere, you can see -- bill? the deputy? yeah. she's also in the legislature in topeka and does a great job there. so i think it's fitting to say that the institute, i believe

and the chancellor can correct me, is one of the bidsiest places on the campus -- busiest places on the campus. i think it's in use four out of five nights a week or something, and we've -- president carter dedicated it for me even though i didn't vote for the panama canal. [laughter] and so that's the kind of the way it's worked. we've had some of my republican friends say when are you going to get a republican speaker out here? [laughter] and we've had some republican speakers. my friend joe biden has been there and, of course, president clinton has been there, and a lot of republicans. we're going to hope to get some of the candidates on the republican side because obama doesn't have an opponent before november. but finally, just thank you for your long friendship.

it means a lot to me. i've been recovering a little bit from a health problem, but i'm getting a little bit better each day. i spent about 11 months in walther reed hospital in 1210, and it's a great hospital, but i never really thought i wanted to spend that much time there. [laughter] but they got me out of bed and got me on my feet, and i can walk around pretty well. and i never could write well, so that's not the problem. [laughter] but the bottom line is as i see it is you go through life, did you make a difference? doesn't have to be a difference for a million people. did you make a difference for one person? or two persons? and i try to, in my own little

way, maybe call somebody or do something so i can say at the end of the day, well, you know, i made a little difference in that person's life. and pat mentioned the world war ii memorial. it's a veterans' memorial because we raised 195 million. it's not a government memorial. and tomorrow morning there'll be about 300 world war ii veterans from six states who will come about 10:30, and i'll be there and elizabeth is a great help to me, and she'll be there, and we'll try to greet as many as we can because they're your fathers and your grandfathers and the people that really made this country great. so thanks for coming, we'll see you at the next salute. i'm not sure where it's going to be held yet. [laughter] ..

[applause] >> thank you very much. i can imagine a greater honor than a salute to senator dold and the extraordinary group of bipartisan leaders on the stage tonight. that is just really remarkable and it shows -- [applause] what he accomplished during his career. i'm going to speak very briefly obviously. thanks for your support. we appreciated very much. thanks to michael eisner for heading up and organizing a tremendous team that pulled this

event off. [applause] though i do intend to talk to mike after tonight because i want to know why i am closing tonight after all these wonderful speakers instead of him. so we will talk about that later. thanks to the university of kansas, the chancellor, chancellor bob hemingway. they have been extraordinarily supportive to the dole institute of politics. we have had some extraordinary gifts as you have heard. beginning with the dedication we have had three presidents. we have had three supreme court justices. the sitting vice president, former vice president, hundreds of political leaders and practitioners and it's just been unbelievable. i hope that everyone has picked up, and they see them lying around, so i know you haven't, by any old report that will tell you what we did over the last two years at the dole institute. i would encourage you to pick that up to see how far we make your dollars go.

i want to thank my team. i have five of my team here and i hope you have had a chance to meet them. if you want to know who they are, they are the individuals who announced senator dold would have programs on 80% of the evening. it was really close to that senator but it is not quite at that level yet. senator dole has had a remarkable legacy, which makes our job at the dole institute very easy. it also makes doing our jobs well and imperative. it is something we all feel very strongly and very passionate about and i can imagine a greater honor than being here tonight with you, celebrating this wonderful american leader. thank you all for coming out, thanks for a great evening. we appreciate your support. [applause] [inaudible conversations]

[inaudible conversations] ♪ ♪ >> here's a look at some of our programs today across the c-span networks.

how many votes might the second tier conservative candidates pull away from newt gingrich. the paper cites michele bachmann, rick perry and rick santorum garnering support that otherwise might go to mr. gingrich. leading to a possible victory for former massachusetts governor mitt romney. our coverage from iowa continues later today as we send our cameras to an occupied des moines meeting and a reminder that for all things campaign related, we have a clearinghouse available for you on line. you can watch events from the trail, stomp speeches and town hall meetings and also links to the candidates and related editorials and endorsements. again that is all that c-span.org/politics. >> michele bachmann is here though i understand and she is thinking about running for president. which is weird because i hear she was born in canada.

[laughter] yes michelle, this is how it starts. [laughter] >> it so amazing to be in washington d.c. with all this history, these amazing buildings and yes here we are at the hilton. [laughter] who are you wearing, what does it matter i'm going into a hilton? >> the more than 9 million views a president obama's appearance and 2.5 million% fires. c-span's coverage from the white house correspondents' dinner ranked among youtube's top 10 most viewed political videos. watch them on line on our youtube channel, youtube.com/c-span. >> next a look at some recent statistics showing the number of illegal immigrants coming into the united states falling to their lowest level since the nixon administration. from this morning's "washington journal." >> host: jeffrey passel is

here to talk about the headline that we saw from a survey you did the number of illegal mexican migrants plunges. i just want to show our viewers the numbers. here are some numbers from the u.s. customs and border patrol, 340,000 in fy2011. those are the arrests made at the border. down 24% from 2010. the lowest number recorded since 1972 and 1.6 million arrested in 2000 just to give you some perspective. here from the pew hispanic center, it legal immigrants in the united states 10.2 million adults, 1 million miners, 35% have been in the u.s. 15 plus years. tell us why, what is happening with illegal migration into the united states? >> guest: the numbers have dropped over the last three or four years from a peak of, in 2007 of around 12 million. mainly from what we can tell due to a dramatic plunge in the

number of new unauthorized immigrants coming into the country. there is a slight increase in the number of leaving. there is a flow back and forth of this group, but the number of new ones coming in to replenish the numbers has plunged to very low levels. >> host: what are the top reasons? >> guest: it seems to be a combination. all of the factors are pushing in the same direction. enforcement has been ramped up steadily over the last 15 years or so. but since most of the unauthorized immigrants are coming for work, and there is no work, so rather than, particularly in the case of mexico, where crossing the borders has gotten more dangerous, more difficult and more expensive to try to come in when there is no prospects of a job makes a lot of sense that people would stop coming. >> host: what about the

decline of the birthrate in mexico. >> guest: there are are some other factors contributing, but demographic factors take a long time to work. over the last 40 years in mexico, the fertility rate has dropped from about seven children per woman in 1970 down to about 2.4 million, 2.4 births per women as of 2000. what happened as a result of that is beginning about 15 years ago, the number of new births in mexico dropped every year and so, eventually that translates into smaller numbers of people coming into the workforce and it's starting now, but it's just a start. i think it's going to be a significant factor over the next 15 to 20 years. it's not a major factor in what we are seeing right now. >> host: so jobs being one of the top reasons or lack thereof

in the united states, what about jobs in mexico? have they increased? >> guest: there has been a little bit of an increase and there has been some activity on the part of people who might have migrated to the united states. so, so it plays a role but the economy in mexico and the demography and mexico are really long-range factors that are going to come into play more and more over the next 10 years probably. >> host: what about those illegal immigrants that are here, the 10.2 million unauthorized adult immigrants in the united states? what did you find out about them? >> guest: well by and large, this is a group of young working families or young families who would like to be working. just under half of all the adults are parents, so the 46% or so of the unauthorized

immigrant adults are parents with children. >> host: these are people who have been here for 15 years or more? >> guest: a lot of them, yes. because of this dynamic of fewer people coming in, and fewer people, not many people leaving, we have accumulated over the last 10 years or so larger and larger numbers and larger and larger shares of adults who have been here for significant periods of time. >> host: and are they staying in the united states? going back? >> guest: there is, there is, like i said before, there are always people coming and going. we haven't seen indications of substantial increase in the number of people leaving. the prospects and mexico still are not that great, so the combination of the routes that people have put down, the equities they have built up in the united states and the lack

of similar prospects in mexico means that most of them -- >> host: if the economy were to approve do you think the number of illegal immigrants into the country jumps as well? >> guest: i would expect that more people would try to come to the united states. it's at that point that the issue of how effective our enforcement apparatus is would come into play. that is i think the key question going forward is whether, how much of a role enforcement has played. >> host: and do we know? >> guest: like i said, everything is pushing in the same direction so it's hard to tease out how much of the enforcement versus -- [inaudible] the economics. >> host: the threat of deportation. the obama administration has

touted the number of deportations that were made since coming into office. is that a deterrent? >> guest: i think the job factor is the major one. we don't really know, like i said. if there were jobs to be had, perhaps we would be able to separate this out a bit. but, certainly there is a fear. are surveys of the latino population show that people are worried for themselves and for relatives. >> host: let's get phonecalls, frank democrat and union missouri, you are a first. >> caller: hello. how are you doing? >> host: just fine. frank your question or comment. >> caller: i was just wondering, do you think with all of these immigrants coming over, it makes our country better? >> host: frank, what do you think? >> caller: know i do not and also do you think that it would

be better if we had less whites in this country? >> host: frank i'm not sure. our guest has a an opinion. he is a demographer and tells us what are the factors in the numbers that he is seeing. carol, republican and north carolina. go ahead. >> caller: yes, i am -- would like to know how you -- >> host: we are listening carol. >> caller: how you can physically do this census, how you find them and how accurate is it and what tools do you use? >> host: sir? >> guest: we base our estimates on government surveys that ask people where they were born. they don't ask people their legal status. basically we are able to estimate the number of people who are legally in the country because we have counts of of the number admitted and we can put that together with demographic

techniques. we can compare those counts to the counts from the censuses and surveys and at the end we make an adjustment for the people who are missed. and one of the prime factors in doing this is data from mexico, because basically almost all of the mexicans in the world are either in the united states or mexico, so by looking at historical patterns within mexico and the united states we can make some assessment of how many people are missed. >> host: do you have an error rate? >> guest: we put a margin of error around these estimates, and they are not extremely narrow. we think the numbers are within four to 500,000 plus or minus. i have been doing this for a very long time and we have much better data now and the margins

of error we think are much smaller so we are fairly confident that the numbers are around 11. >> host: asked in minnesota, independent. >> caller: yes, good morning. >> host: good morning. >> caller: alright, have got to questions. one is to you think that this is a strategy for obama to cut the national border and to have a bad economy so that cuts down the number of illegal immigrants coming across the border? that is one question and obviously i'm a little -- about it. second, do you think we should take strategy or advice from north korea, iran as far as protecting our borders? thank you. >> host: what you mean by that? >> caller: well i just made it seems like one person goes across the border and they arrest them. here we protect the border and we have an unbelievable amount of -- to do that. >> host: let's talk about the

resources along the border. what do we have? >> guest: i am -- i haven't been following the budgets that we have got somewhere believe on the order of 20,000 agents and border patrols, which is on the order for five times what it was 10 years ago. a lot of technology. they have built fences. they have deployed sensors, and it is from every indication, it's a lot harder for people to cross. the strategy has pushed people away from the easy crossing points into places that it's physically difficult to get across, and i think that has deterred some people from coming. there are indications from surveys done mainly in mexico that the chance of somebody would get caught trying to get

in has gone up by about 50% over last 10 years. >> host: and the expense of trying to get across? >> guest: the cost has gone up by a factor of two or three over the last 10 or 15 years and now i think the going rate seems to be about $3000. now, practically everyone who tries to get and does use a smugglers whereas 15 or 20 years ago it was much less frequent. >> host: will beaty adds this to the conversation on twitter. cbs news poll 68 to 25% of americans disapprove of allowing the children of illegal immigrants to attend state college. for lower tuition rates. evelyn, democratic caller in chicago. >> caller: good morning, good morning and happy holidays. >> host: happy holidays, evelyn. >> caller: just a comment. i am from south chicago, went

through desegregation, blah, blah, blah and then we were inundated with the spanish. we had to open up the five churches to them when the recession came. the houses were boarded up, and now just sunday, when i went to church, it is stunning. and all of the churches now how many have left and gone, who knows? they are very great at buying homes over in mexico and going back and forth. did they help us here? not in this community. the education went down and it has been a lot of hard work. they are good people, but i really disapprove of all of this is illegal stuff going on. and i thank you for listening and i will say goodbye. >> host: okay.

duguid's -- has the pew hispanic center done in the numbers of the cost of illegal immigration on schools and we also hear it on medical costs. >> guest: we haven't done any studies that try to measure that exactly. but the general, the general sense you get from all of the studies that have been done is that those are the areas that are the most affected. most of the undocumented immigrants are working. most of them are paying taxes in one way or another. but as i said before it -- there are a lot of children. if the population of young families and the children, so the schools is where you see the impact. >> host: explain how they are paying taxes in one way or another. >> guest: well, at least half and maybe as much as two-thirds are working in jobs that are

covered by social security so they are having income tax and social security tax withheld. in many places, the principle source of tax revenues is property and sales tax than those are certainly taxes that everybody pays. regardless of their legal status. >> host: here is a tweet from south who adds this to the conversation. u.s. racism against races mcginn central and south americans makes us look like a joke on the world stage. republican in san antonio texas, good morning. >> caller: good morning, good morning. i have been in washington d.c., born and raised come live in san antonio. i married for it to a woman from southern mexico and have been for 10 years. i don't know where have the demographics and these polls come from, but the majority of them are wrong. i know for example, like my wife, and her father and her mother. there are 25 other people in her

family that have used their i.d. to come into the united states legally, have kids, get the benefits, get the medicare and here it is i can't even afford health insurance and my job but they get all of these benefits for free. and just keep having more kids and more kids and go back and forth and bring more and more people. that is the problem, how they can just get across. they aren't sitting across the borders. they are using regular family members i.d.'s and passports to come. that is what needs to be addressed, the identification system is totally screwed up. >> host: so they are using legitimate documentation from other family members? >> caller: yes. for example, my wife's father is a citizen. he became a citizen through his daughter. once he became a citizen, he gave his i.d. and his papers to them. he came over and they sent the paperwork back. four other brothers came over

and that the three other wives came over. than the kids came over and now, these kids aren't even citizens and they are getting free medical insurance, free food stamps, free schools. >> host: okay, got your point. and a survey that you have done where with a number show this playing out? >> guest: well, if they are not citizens they are not eligible for those programs. there are some indications that there is not any indications of massive levels of fraud in this program but for the most part noncitizens don't use those benefits. there is some indication certainly we hear from the border patrol and the customs people will tell you about people coming in with documents but increasingly they are deploying technology to make sure that the i.d. matches the

person. from what i understand, it's much harder to do then it was 10 or 15 years ago. >> host: we will go next to eileen i think is your name, an independent and holiday, florida. good morning. >> caller: good morning. it's eileen. i would like to ask if it is indeed true when illegal immigrants, excuse my dog. she gets excited when i'm talking to someone. if it's true that those children are automatically citizens and how that affects being able to deport the illegal immigrant parents. >> guest: yes, children born in the united states are automatically u.s. citizens regardless of the status of their parents with some minor exceptions for diplomats. again, historically 10 or 15 years ago, having a us-born

children was considered a factor in whether someone was going -- could be deported. a few years ago, a decision was made to stop that and basically people were subject to deportation regardless of whether they had us-born children or not. how that policy is being played out now i am not sure but it used to be a significant factor. >> host: what about a recent policy that cracks down on employers who hired illegal immigrants? >> guest: i think most of the people who have looked at this all along have talked about enforcement to actually work as a deterrent would have to be focused on the employers. i don't know how that is being done right now. it's not what we study.

>> host: and is that playing a role and the number of illegal immigrants? >> guest: going back to what we said before, the employment opportunities are really what are drawing people so if it's harder to get jobs, through employers, then that would tend to keep the numbers down. >> host: dawn,.com a democrat in riverview, new york. >> caller: yes, first one question is, do you really think that a mexican born in mexico is going to tell you that they were born there when you do your survey? >> host: we will take that point, don. >> guest: we again, we don't have any indications that the numbers are badly wrong.

we correct for some undercount. what we do have indications of our a much larger number of mexicans tell us that they are naturalized u.s. citizens so to the extent that we are picking up this kind of response, misinformation that has to do with citizenship rather than place of earth, we do have a good idea of how many people were born in mexico over the last 50 years, and by combining data from mexico and from the u.s. we can see that the numbers are pretty accurate. >> host: how do you go about your survey? i think you said this earlier but do you make phonecalls? how do you do it? >> guest: we use data from the american survey and the population survey which are done by the census bureau. the current population survey

interviews people multiple times. the first interview is done in person. the community survey is principally done by mail but for people who don't mail the forms and -- >> all of our republicans -- a republican in -- >> caller: . [inaudible] based on what? they never process or anything so how do you know? that is why the government is asking them to come forward. so how do you know they went down? thank you. >> guest: well, we have data from surveys that show the number, the number of people from mexico and the united states has not changed and the last four years.

the number living here legally has gone up so we can estimate that the number here as undocumented immigrants has gone down. we also have survey data from mexico that supports our estimates of the number coming in, the survey data from mexico shows that the numbers of mexicans coming to the united states went down 75% in the last five years. >> host: if you look at the estimates of the u.s. unauthorized immigrant population from 2000 to 2010 you can see between around 2007 it was what? >> guest: about 12 me in. >> host: a dropped 11.6 and 2008, 11.12009 and then in 2010 up slightly. 11.2. >> guest: it is well within the margin of error. we tend to say it levels off. >> host: it leveled off. >> guest: we have gotten some indications from the 2010 census

and submit data from from the census bureau that the overall numbers may be higher but we think the pattern of change over the decade is captured within these estimates, that the numbers did go up quite rapidly in the first half of the decade and it peaked in 2007. >> host: do we know what the increase was, what the reason behind the increase was? >> guest: well, i mean these are again, the economy was in reasonably good shape and the numbers coming in 10 tend to go up and down with the u.s. economy, so we had peak migration from mexico right around 2000. we pointed to the apprehensions data and our estimates of the inflows show a peak as well. there was a little bit of a drop in a recession in 2001 and 2002,

but the inflows went up again in the middle of the decade as the u.s. economy grew. >> host: what does it say about the increase in the first half of the decade and how quick of an increase that was versus the last -- here is -- several years. >> guest: it goes back even further from about 19,932,007. the increase averaged about half a million. >> host: okay. >> guest: some years more, some years less but there was a steady increase and it was about half a million a year. since then it has dropped a million so it is really a dramatic change in the patterns of what we have seen. >> host: jet is an independent and baltimore. >> caller: hi, i would like to first off apologize to our fellow americans of mexican descent for these extremely rude

and racist, ungodly comments that people are calling and. i want to apologize to all of them as an american and i also want to say that our country is born of immigrants. almost every single person have immigrant ancestors and i am just appalled at the comments and things that people are saying. it's okay to be racist against mexican-americans? i don't think so. this is ungodly and we are supposed to be a christian nation. i want to say merry christmas and i apologize. >> host: got your point. a democrat in rosen haim, new jersey. >> caller: good morning. i live in south jersey, and where i live in south jersey, more closer inland, and most of it is rural farm area. a lot of farmers employ mexicans

to work their farms. with this sense is that is going to be going out, are they going to be going out to a lot of those farmers who employ mexicans, a lot of them staying on the property. i know there is a blueberry company in new jersey that a lot of the farmers actually live on their property. and if they go out to do this census with those mexicans that do work for those farmers and they are deported, you know they don't pay them a lot of money to do that work. and i am sure that is going to kind of mess up, what am i trying to say? their ability to be able to maintain and gets produce out to the stores paying cheap labor to the mexicans and still being able to process and being able to bring more produce the

following season. >> host: okay, any thoughts on that? >> guest: well, this is an ongoing debate and an ongoing issue of out labor and we have seen aquaculture as a heavy employer of immigrants and in some places we hear stories that crops aren't getting picked over the long run. other industries, other parts of the agricultural industry have looked at alternatives, mechanize sing in some places where it's possible. >> host: we are talking about illegal migration here this morning. i want to show you the state-by-state breakdown. here is the decline in unauthorized immigrant populations between 2007 and 2010. in florida, there is a difference of about 230,000. in igor, 200,000 less, virginia it has declined by 100,000,

colorado 65,000, arizona, utah nevada round 160,000. where they have been increases in texas, louisiana and oklahoma. do we know why? >> guest: again, there seems to be some economic factors underlying this. florida at this particular time period was going through a very bad economy. florida experienced outmigration to other states for the first time and 60 years. so, places where jobs were less available seemed seem to be losing people and in particular texas seems to have a relatively strong economy compared to other states. >> host: jeffrey passel is a senior demographer at the pew hispanic center. linda, republican in north tennessee, go ahead.

>> caller: first of all i am sick of these people apologizing for america. also canada is clamping down because their economy is a lot better than ours. they are clamping down on all of their illegals sneaking into their country. if we don't have borders, we don't have a country and say are they say they pay income taxes and social security. that just says they have stolen someone's identity or else they wouldn't have a social security number. appear they are very involved in human trafficking and drugs and when was the last time you went to walmart? you said they don't get a food stamp card? you go to walmart and see them using that boot stamp card paying for their groceries. >> host: linda how do you know they are a legal? >> caller: because you can look at them and they don't speak english. >> host: linda don't think that necessarily means they are illegal just because they don't speak english. >> guest: more than half of the mexicans in the united

states are legal. mexico is the largest source of legal immigration. about 20% of all legal immigrants moving from the united states into mexico. >> host: what about english versus spanish? >> guest: the longer immigrants have been here, the more likely they are to speak english but the newly arrived immigrants often don't speak english well. >> host: here is kenny jacobsen with this week. is as illegal immigrants are here because americans knowingly hire them. it is no different than the companies who outsource solely because of profit. bob and independent and colorado, go ahead. >> caller: hello. i lived in mexico for 10 years and i have been back about two years. my mexican friends that come into the united states as the gentleman mentioned earlier, the use of coyote which is a person that for so much money will take

them to where they want to go. that is when they get paid. but generally, my mexican friends that have come here to work, which is a natural thing they want to do well for their family, so, but they don't want to come here necessarily to live. some of them eventually do but they really want to go back and mexico is a gentleman knows, would millions and millions of dollars go back to their own families. >> host: do we know about money being sent back? >> guest: there are billions of dollars. the last numbers i saw were in the order of 11 billion but that was a couple of years ago. the remittances have gone down. it's a major source of foreign exchange in mexico. there is a strong debate and the economic literature about the overall impact of these

remittances. the governments tend to see them favorably and like to have the money coming in. the mexican government has set up a number of grams to try to channel the remittances into generating economic, productive economic activity. >> host: elton, a republican in bakersfield, california. good morning to you. >> caller: good morning. first of all sir, i want to put up an argument with your numbers for the total amount of immigrants in this country. i think it's about three times that number. secondly, why is begin the mac still allowing dual citizenship to those that come here to become citizens? it was to be that they would eventually go back to mexico and re-immigrate, but it hasn't happened. they come here, they stay here. >> host: hey elting can i ask

you a question. you are a republican right? let me bounces tweet off of you from jody who says it seems the republicans are the most angry so why then when they had a republican in office in 2006, didn't they do anything, not anything? do you share that sentiment of the republicans? >> caller: okay, first of all the republican was a progressive. there are progressive republicans and there are progressive democrats. you know, they are in both camps. >> host: so george w. bush was a progressive on this issue? >> caller: yes he was. >> host: so you disagreed with him? >> caller: yes, i did. >> host: dual citizenship, what is it? >> guest: well, many countries now allow people to become citizens without giving up citizenship in other countries. the united states has tolerated it for a while and there has

been a change in mexico within the last 15 years and their approach to citizenship. mexicans in the united states are the least likely of any group to become u.s. citizens, legal mexican immigrants and the lowest naturalization rates of any group of immigrants. it has gone up quite a bit in the last 15 years cents the dual citizenship, since the changes in mexico have occurred, but the numbers -- the undocumented immigrants can't become u.s. citizens. >> host: we will go next to bobby, democratic color in tucson arizona. bobby we are talking about illegal migration into the united states and the pew hispanic center finding the numbers have fallen. go ahead. >> caller: good morning. please give me a little bit of

time because this is a very complex subject and i appreciate c-span. i watch it thoroughly. this, since i try to be a very very moral person, i approach most things and well just about everything from a moral standpoint. i actually demand about a 40, about a 40 word explanation to me from your guest. lets say like two big sentences. i am trying to focus on the morality of the issue, okay? is it moral to consider that there are -- i am talking about the formation of the united states of united states of america, okay? is it moral to have like over 1000, let's call them native

american tribes, and have their ancestors that have possibly been here thousands of years and most of the people from mexico are actually derived from that and possibly the people that raped a young, you know, indians, people down there? >> host: bobby? bobby, need you to get to your point if you could. >> caller: okay. now the point is i am talking mainly orality. i would like your guest to address the point of the morality of the formation of orders, the formation of borders at either gunpoint or a military complex. >> host: bobby i'm going to jump in at this point. our guest is a demographer and not here to talk about morality. we are talking about numbers. let's go to a republican line, orlando florida. go ahead. >> caller: well, when it comes

to illegal immigration or migration, again i think that we are looking am blaming it on people, we are blaming the illegal immigrants themselves. i think what we need to do is focus on the employers that are hiring these people as well you know, even the private contractors that are hiring these people. they know who they are hiring and they are doing it because they don't want to pay taxes, because they don't want to be liable for workers comp because of anything happens to them you know, they are hired under the table and this is just, this is just another way, a wedge issue for people to be prejudiced against others. i mean, if you're house is not up to code, the code enforcement comes over and they check on you and they give you tickets all the time. inspectors come to restaurants all the time to check to see if it's cooked right. why can't they come to these places that they know and check it out?

that is really the issue. we shouldn't even be talking about these illegal immigrants. if they didn't have somewhere to work they wouldn't be able to come here. >> host: we touched on that a little bit but what do the numbers show about the crackdown on employers hiring? >> guest: well, it turns out it's a difficult political issue to go after employers. and, there has been increased enforcement against worksites and employers, but the question i think underlying all of this is how effective the laws are and how many people we hire to enforce them. there has been a tendency to focus on border enforcement rather than worksite enforcement

>> host: on our democratic line, carol and, help me with the name of your town. in north carolina. carol? >> caller: i just have a question. i need a definition. i just have a question. i would like to ask your speaker there are the definition of illegal? >> host: okay. >> guest: we tend to use the term unauthorized immigrant and what we are talking about are people who do not have papers that authorized them to be in the united states on either a permanent basis or a temporary basis and we don't check the bulls papers in make in these estimates. we make them with aggregate data, but we do know how many people have been admitted as legal immigrants. we are able to make estimates of

those number so what we then look at is people who were born outside of the united states who don't have authorization to be here. >> host: what is the difference between unauthorized and illegal? is there one? >> guest: not, not really. it's a question of how you define them specifically. it's worth pointing out that a significant share of the people we think somewhere between 40 and 50% came into the kent legally. that is, they entered through ports of entry with temporary documents allowing them to come into the kent on a temporary basis. tourists, work permits and alike. but they have stayed beyond the authorization. >> host: so it wasn't necessarily illegal migration but now they are here and they are unauthorized immigrants? >> guest: right, they violated the terms of entry and are

authorized in that regard. >> host: we will leave it there. subforce a senior demographer at the pew hispanic center and the web site is the pew hispanic.org if you're interested in more information. thank you very much. >> guest: you are welcome. >> we want you to tell us what part of the constitution has meaning to you and why. let us know in an eight minute documentary and get it to c-span by january 20, 2000 well. that's less than a month way to win your chance for a grand prize of $5000. there are $50,000 in total prices. prizes. c-span studentcam documentary contest is open to grades to -- six through 12. >> a look at the u.s. capitol here today as the senate gets ready in about 12 minutes to gavel in for a very brief pro forma session. no legislative business is

scheduled today. while we wait for them to come and let's take a look at some of the viewers comments and phonecalls and today's headlines from this morning's "washington journal." >> host: the u.s. economy broke faster and 2012. this was knocked off the track by upheavals in europe and even then more push to unemployment rate down much according to the "associated press" survey of leading economist. the three dozen private corporate and academic economists said unemployment will barely decline from the current 8.6% to 8.4% by the time president obama runs for re-election in november. still the years ending on an upswing. the economist said with expectations at 2.4% growth next year versus a rate of less than 2% in 2011. and the economy has generated at least 100,000 new jobs per five months in a row come the longest since a streak since 2006 in the number of people applying for an employment and if it's has

dropped to the lowest level since april 2008. the economists surveyed december 13 through the 20th expects the country to create 177,000 jobs through election day 2012 which would be up from an average of 132,000 jobs in a month so far in 2011. jeanne is the chief u.s. economist at barclays capital. does the u.s. economy remain vulnerable to an outside shot at with the risks of big debt crisis will trigger a freezer? a shock to the u.s. economy might not be as dangers of her growing at a healthier 4% to 5% annual pace. but when growth is stuck at two to 3%, major global crisis could stop job creation and raise unemployment. what is your confidence level in the u.s. economy gave the republican a good and cold water michigan. colt where his cold water michigan the state coax.

>> caller: we are at the southern border of michigan near indiana. just a comment i have had on the extension of unemployment benefits. by kent i am unemployed and i'm not getting benefits so i'm not sure how that fits into the presidential announcement and congress, though they are employed for quite a long time. of the benefits have run out or just not confident in more. they don't get any extensions on unemployment and i wondered if there would be in a comment on that. >> host: dave have you always been a republican? >> caller: yes. >> host: what does this mean that if you're unemployed and the economy is the way it is for you? which candidate do you think of the republicans could turn the economy around? >> caller: that is kind of a hard one. i think it has to do with the

overspending and the balancing of the budget so i would kind of.towards newt gingrich. he had accomplished that before. i think that there weren't such -- actually that is why my company left the united states his taxes were too high. they went -- send 50,000 jobs to china and they are not coming back until this changes. they actually issued a letter to us during the layoff stating that. taxes are too high in the united states. >> host: you would vote for president obama? >> caller: no, i think obama is pretty much the cause of this stuff. he has increased unemployment up to about 20% nationwide, and like the company said until the spending cuts back and therefore then the taxes cut back, there will be no jobs returning to the united states.

i mean that is a world company. a very large company and so i guess they know what they're talking about. they are the ones in control of the jobs and they're the ones that do the layoff. they simply respond to policy and spending here and that response is totally -- >> host: let's hear from a democrat enroll in georgia. robbie, is that your name? ravi? go ahead. what is your confidence level? >> caller: zero. minimum wage and low-paying jobs, illegal jobs. there isn't anything that is going to sustain anything and people can't make a living with these jobs. it's terrible that people can't -- they are losing their cars and losing everything. they don't have adequate health care and they are just scratching their heads so i mean you can't support a family on a

walmart job. >> host: so do you blame democrats as well? are you there? do you blame democrats as well for this? >> caller: i blame everybody. >> host: so does that mean you'll get out and vote in 2012 and who will you vote for? >> caller: no, voting is over. forget voting. let's just have a revolution. >> host: richmond virginia, brian, an independent. what are your thoughts? >> caller: good morning. thank you for c-span. i watch you every day. day. i am a first-time caller. i have really got strong confidence in the economy. it tends to go in cycles and it always has in history and it just takes a long time for it to come back when its man and a really big mess like it's been in. and, there is plenty of blame to go around. hopefully people won't -- will get it right this time and vote

the right people in and vote the wrong people out. that is my comment. >> host: brian what does it take to get it right? >> caller: vote for people that are not career politicians. quit electing lawyers. quit electing people that all they care about is themselves. >> host: okay. hey brin i want to get your reaction to the story of. it is the front page of "the new york times" and "the washington post" this morning about congress and let me show you the headlines. here's an air kind front page economic slides from a detour at capitol hill. it says that when representative pat pastor was elected he was comfortably ensconced in the middle-class. he held 100,000 or so in savings accounts in the mid-1990s and had a retirement pension but like many americans he also owed the bank nearly as much in loans. mr. pastor buys a powerball ticket every week in and says he doesn't consider himself rich.

indeed, within the halls of congress the media net worth is about pot -- and climbing. he is a rank-and-file millionaire but compared with the country at large for the media net worth is 100,000 has dropped significantly since 2004, he and most of his fellow lawmakers are true aristocrats. that is the new york takes -- times take times take on. congress looks less like the rest of america. it says here between 1984 and 2009 the media net worth of a member has more than doubled according to the analysis of the financial disclosure. from 280,000 to 725,000 inflation-adjusted $2009. the same fehr the wealth of the american family has declined slightly with a comparable median bigger sliding from 20,600 to about 20,500 according to the panel study of income dynamics from the university of michigan. brian r. u. still there? >> caller: yes, i am still

here. >> host: what do you think? >> caller: it's fun when people have money but when you elect people that all they care about are lining their own pockets and they are out of touch with the common man. and, that is not how the system was set up. was never intended to have career politicians. it was intended to have the citizen legislators, who put themselves in a position to provide public service for noble reasons, and they are are very few people that do that. >> host: brian let me ask you how do you plan to vote in 2012? are you voting for all incumbents? >> caller: whoever is in office, not going to vote for them. i will vote against them. >> host: does that include on the president level? you are voting against president obama? >> caller: if the republicans can't come on up with anyone then who is more sane than who they have i will probably vote for obama.

i will hold my nose and vote for him. >> host: donna, a republican and is at cleveland taxes? is that right? cleveland, texas? good morning in in texas on our republican line. >> caller: good morning. good morning, republican. >> host: okay, go ahead. >> caller: well i don't think that changing congressmen and during all this in one fell swoop is going to do a thing. we need to get banking bailouts and big banking and pay money out of our system and return to some kind of a reasonable standard as set down in our constitution. we control our own money. much the same as what the state of utah is trying to do right now. get more lawful control and sovereignty back to the states. until we do that we have a zero outlook. >> host: dawn what do you think about the federal reserve?

>> caller: it needs -- and a student of history should know that. >> host: here is the "washington times" on the federal reserve is as the majority 56% of the economists say the economy will get a lift from the federal reserve policy. it plans to keep short-term interest rates near zero to at least mid-2013 if the economy remains weak. the central bank also has begun a campaign to try to push down mortgage rates and other long-term interest rates run next june. among the greatest fears is that a major country like italy will default on its debt wiping out some banks with large holdings of your pain government wants, worldwide credit crunch like that one, like the one that followed in 2008 failure of lehman brothers could follow. so this is the "washington times." economist predictions on 2012 turning to all of you to get your -- of the u.s. economy