before people ended up in drug stations and conan the barbarian. literary things. you can watch this and other programs online at "book tv".org. >> up next on "book tv", grover norquist and john lott jr. take a look at obama's programs. this is just over an hour. >> good afternoon, everyone. welcome to our newsmaker lunch for the day. this is an ongoing series sponsored by american spectator magazine, i am from the american spectator. we are here to discuss a new book by grover norquist, public enemy number one of taxation in america, and the economist john

lott. over the next few months, all we will be hearing a lot of positive statistics from the president about he is turning the economy around, and he deserves a second term on the basis of progress toward reducing unemployment and making all kinds of -- the economic situation better. moving us away from the great recession. the book we are discussing today, however, paints a different picture of the resident economic policies. it sums up well by the books title. "debacle." their presale on jobs and the extent of regulation and deficit spending, perpetuated by this administration, will be very different from what i think you will be hearing on the campaign trail from the incumbent president. to get it off, we will have grover norquist start with this talk about what they were trying to do when they wrote this book. and also their vision for the economy under obama.

>> the book has three parts. the first, people are more familiar with. the failure of fannie mae and freddie mac's. the government mandate that things make bad loans for houses, and how that led to the financial crisis, and then part one, the question is how the obama administration, and the latter part of the bush demonstration, reacted to that with bailouts and the stimulus spending. four different stimulus packages, not just the big one we think of. and why that actually made the recession worse and the recovery weaker, and creating fewer jobs, increasing gdp -- less than other countries, which did not do stimulus spending, and that our recovery is weaker than previous recoveries. as you could compare what we are going through now with the reagan recovery, with the fort recovery, with recoveries back to the great depression. or you can compare it with other

countries that are going through what we have been going through in the last several years. in both cases, the obama recovery is weaker, less strong but in some cases bizarrely weaker than what has happened in the past. why? well, unlike reagan, who got a deeper recession in terms of destruction of jobs, 10 .8% -- and reagan had double-digit inflation at the same time, what obama did is not reduce spending from where it was going and deregulate, he did the opposite of each of these things. particularly on the stimulus package, you have to ask yourself, what was the very? the theory was that if the government wants to take a dollar from someone who earned it, either in taxes -- physically taken, or in debt, you were borrow it, and then you cannot dollar to someone who is politically connected, that

there are now more dollars in the economy. but there are more jobs in the economy. the idea being that harry reid, nancy pelosi, obama went to one side of a lake and dipped it in the lake and they took their three buckets of water and went around to the other side of the lake and in front of the cameras, pour the three buckets back into the lake, then you would have stimulated the lake to great depths. this is actually the theory they were operating on. now, not only is there to say the same amount of water in the lake, minus whatever someone in chicago takes home with them, but at the same time, what incentives does this give to the person who worked on saturday, whose daughter he took for this experiment? do they keep working? do they hide their resources? what incentive does he get to the person who, because they were connected politically or did what the government wanted

instead of working, they got the dollar because. he gives that incentive -- bad incentives to people who receive the cash and disincentives to work, savings, and investment of people who are earning a dollar in the first place. it shouldn't surprise us that this didn't help the recovery, did not create jobs, did not create more money in the economy, simply by moving it from one person's bank account to someone else's hand. and yet, it does seem to have surprised the obama administration, which continually rejected that now the economy will turn around because we spent all this money. every time it didn't, they had to have a new explanation as to why it can work. usually by someone many years ago. the third part of the book is, okay, now we are in this mess, we have a week recovery and job creation is weak. gdp growth is weak. what we do?

that is where we have a 12-point -- 12 step plan towards recovery. the short of it is, make a list of all the things that obama and proceeded and do the opposite. it is a little bit -- when someone says, reduce tax rates, spend less, regulate less, don't inflate the currency, that is not particularly helpful as advice. when you say howdy to pakistan from china, just go over the himalayas. okay, how do we cut taxes and the regulate? they are, in the last chapter of the book, we go through what it's going to take. we have a decade ahead of us. we the republicans have seats in the house, a republican house for the decade. if you look at the senate seat, there are 47 republicans, and you're going to need to network

to get a majority, but not 16 to get 60, which is what obama taught us, which is what you really need if you're going to make germanic change in congress in the next election cycle in 2012, there are 23 democratic seats in the senate, 10 republican, and two years later, 20 democratic seats and 13 republicans. in the next three years, the next two election cycles, 43 democratic senate seats up, 20 republican senate seats up. of the republican senate seats, you worry about two of them. of the democratic side, you worry about 20 of them. republicans need to net 13 of those to get to 60 in the next two election cycles. the question of the presidency is there, but if you let a republican president to go with a republican house and senate in 2012 or 13, you have the opportunity to begin to turn around some of these decisions, and i think that the ryan -- paul ryan of wisconsin's roadmap is aptly made. it is the map -- the path to a

future that works for america. it is a u-turn on the road to where we need to go. it is not slowing down the disaster or reducing the pain, it actually does turn us around and puts us in a genetically different direction. we will actually end up with less spending as a percentage of gdp, and strong economic growth, not just for the four were 10 years, but for the next 50 and 75 years. the book is a little depressing at the beginning. stick with it. it is annoying at the beginning, as you see obama and harry reid and nancy pelosi make mistake after mistake and double down on their heirs. but then it gets cheerful. when we walked through how we can -- not just be radically how you can turn the economy around, but politically. what are the steps to electing a house, a senate, and a president and keeping them on a path to reduce spending, reduce taxes and get the economy moving as it

ought to be. >> john? >> thank you very much. i appreciate it. >> they did for having us here. the motivation for the book was there are lots of people who have said obama promised certain things in terms of the economy. can i have your? [inaudible] [inaudible] >> all right. you get good one, i guess. >> anyway, they do very much. >> honestly, a lot of republicans say that obama promised a% unemployment if we passed the stimulus. it went up to 10% and over. we just cannot go and tell people, look, you made a certain

promise, it didn't work out. you have to somehow explain to people why the stimulus made things worse. there is pretty simple arguments for the kids. when you have the stimulus and the other jobs programs that grover was talking about, not only are you moving one chilean dollars from where you and i were companies would spend it to where the government wants to spend it, not only are you moving resources from one company to another or from one industry to another, but you moving around the jobs that are associated with that money. the problem is that jobs don't instantly move from one company or one industry to another. it takes time. you don't just pack up and throw the kids in the back of the car on a friday and start work in another state in a completely different job on monday. it takes months or even years, more refining, for people to move from one job to another, even if they can't find jobs that will be worth it.

whether you move jobs in the oil industry, or colorado, starting up of jobs in solar energy in california. assuming they are qualified to do that, and a lot of the jobs that were are employed -- that chaos and churning your creating by moving jobs around, temporarily increases unemployment. it is more than that. you have all these regulations. we had never had so many regulations or so many regulatory bills passed in such a short period of time, whether it be housing or credit markets and financial market regulations , health care regulations or epa regulations. that, too, creates winners and losers. moving around resources and jobs in the economy. that creates temporarily -- unemployment. there are two ways you can reduce unemployment. one is a good way. you get people to get jobs. the other way you end up

reducing unemployment is at people giving up looking for work. if you just look at the period of time when the recovery started until now, we have had about 2 million new jobs being created are at the same time, you have had 7 million people give up and stop looking for work. the number of people not in the labor force has increased by 7 million people. that is unthinkable. that happened during the recovery. it is during recessions that you have people give up and stop looking for work. not during a recovery that you see something like that. now, i don't know people can see the diagrams. is this working, yet? >> anyway, we have diagrams someplace. are we going to have the screen of? or not? can i have my posters that? is that possible?

>> all right. you know, i will go into one thing while i'm waiting. you look at jobs, and what they will do for counting jobs is is the money going someplace? if there are jobs there, even the people working hired in this industry, we will count this as stimulus jobs. the problem is that you also have money being taken from someplace else. what you need to look at is the change that your having. let me just show you a graph here. this is just the percentage of jobs during the recovery since 1970. you can see here that these are all the recovery recoveries

since 1970. the dotted line is the average behalf. the ones that have grown the most are the ones that have had the biggest loss in jobs previously. so you have the recession -- the carter recession of 1980, the recovery afterwards for reagan, and the ones in 1970 and 1975. the two low ones here in this chart are 2000 and 2001. the black line at the bottom is the obama recovery. you can see how much worse this is in terms of job recovery than any other. i would argue, one of the reasons why we actually have job losses here -- this bottom line is 100% -- the reason why it is falling during the recovery for a period of time, is because of the fact that we have had all this churning -- was damaged caused by the stimulus it felt that has gone and created unemployment while it is moving resources around in the economy. now, the book gives lots of

comparisons to other economies. look at canada here, as an example. one place it did not go and follow the type of stimulus policy that obama advocated here. you can see in 2008, in the beginning of 2009 -- our unemployment rate pair love canada's, amazingly closely. our gdp dropped drop parallels closely as well. this dotted line that you have here, our economy is getting worse. canada's levels off and starts to improve. if you look at germany and other countries that also did not follow the stimulus, there to be had the same types of differences. ..

the ones that were hurting the most at the least. just showed you a couple of diagrams here. if you looked at stimulus dollars and poverty rates fell, the ones that got the most stimulus dollars of the lowest poverty rates. you can kind of see the generalship but the line there. if you look at bankruptcy, the ones that had the most money at the lowest bankruptcy rates rather than the highest. unemployment, there is no relationship. states with higher unemployment got no more stimulus. if you were a big union

statement of, you would get more money, but it's now related to things that were related to how badly off the state's work. one thing really seems to have explained a lot with the stimulus money. what that was was the makeup of the congressional delegation, the states that had the biggest percentage of the congressional delegation were democrats, got the most money. it is -- basically the difference between having a congressional delegation that is all republican verses of democrat comes about $46 per person in terms of stimulus dollars the weather. so the book also goes through and tries to deal with a lot of the explanations for why the stimulus to work. on the one hand obama keeps on giving would get more jobs government. the summer recovery. it does not happen.

there is some excuse. of this give you one example, one thing that treasury secretary tim geithner just recently mentioned again, and that is, that claim is countries that suffered bad financial crises are going to have slow recoveries, slower job growth. well, it's pretty easy to go and check that climb. you can go and look of the countries that claim to have the financial crises and those that didn't and juicy. do we see bigger increases in unemployment and the ones that were said that had these financial crises verses the other? in fact, if anything the reverse is true. if you looked at the diagram that we have here, the country's that r and d bulb black, the ones that were facing financial crisis or not facing it. the great one is the ones that work.

in fact a you see a bigger increase in unemployed in the countries that were not facing the financial crisis you can show the same type of thing with regard to gdp. we get through a whole range of different types of explanations. you know, the important thing here is that if you're going to convince people, and giggling to help them understand why these policies failed and hopefully not trade again, certain things were promised and did not come through. will often happen in this debate is people come back and say, well, would limit on this and that now working out. fine. you have to go and answer those questions. i am very proud of this book in terms of how we go through a knock down the claims

you also have to write a basic theory about why this keynesian policy failed. i think we do that also. i greatly appreciate your time. >> they give -- thank you. [inaudible] >> the microphone is on. we had a republican approach to regulatory regime, yet we still had a recession. that is an argument you hear a lot. why is that the case? >> in many ways been blessed with all of the fannie mae and freddie mac banking challenges. much of that could have been pulled back by executive order. it was not all legislative. and unfortunately the bush administration did not have limited government spending on there to do list.

they realize you not supposed to raise taxes and in theory you're supposed to reduce taxes. some tax reduction in 81. the trading tax cuts to the -- design by the vice-president . both of those helped, strong economic growth. but every time president bush ran into a problem he threw big government at it and decided to study so that in louisiana, and run. eastbound it was a challenge use of the financial crisis. 700 billion of spending with a sharp. and to her and 50 billion for the next a ministration to provide a letter. so there was a real challenge. the best illustration got a right, don't raise taxes. they did not do part two. that is where the party came in and instructed the modern republican party, so far so

good. don't raise taxes. spending. the other part was the regulatory burden, which bush did not pull back in. frankly, he was distracted by the mayor of bank of -- baghdad for a number of years and did not focus on maintaining the limits of government spending. that said, everything hoover did fdr did worse. everything boosted wrong obama did on steroids. i don't want to suggest bush was as bad in spending as obama, but he was moving in the right direction. >> a lot of the stimulus funds didn't go to the states that were most affected. if the problem that the stimulus funds were misallocated or that the entire idea for a stimulus spending itself as misguided. >> the entire idea of stimulus is misguided. i mean, you know, you go and take money from certain places and given to someplace else. that is not increasing that jobs

. maybe one could make an argument sometimes that government might know better than individuals where they can get a higher return. pretty skeptical about that. in that going to be increasing the total number of jobs. what you're doing the moving around this huge amount of money is increasing unemployment temporarily. thus the reason why you see this now the stimulus is over. you're starting to see some recovery. that should have happened before. the stimulus delayed by creating all this churning, delayed the recovery that was there. and so you have two problems. you actually have three problems it stimulus created employment. secondly, it moved a lot of our wealth to places where we did small returns . there is a reason why people are not investing, around in ethanol or these alternative energy forms. it's because the return from those investments was less than people could have gotten

someplace else. so we are making ourselves more for the future. the third thing is, this has been the giant wealth transfer. when you go and look at the stimulus basically requiring unions to go and get it for supporting public union jobs of there, you know, maybe we could make an argument that he should have more teachers are teachers should get even better paid than they are getting. that wasn't the argument that was being made for why we should have this. public employees and unions across the board. if you're going to go and build a road, what does it need to be built with union workers? when that just try to figure out the least costly way that we can go and build the road for the taxpayers? and it's not just them. public things beyond the stimulus bailouts for general motors and chrysler, which doesn't even include a lot of the tax subsidies and other things that we have given.

so this is probably the largest wealth transfer that we have ever seen in our nation's history, and it's primarily been the heavily democratic. and to a relatively wealthy. the opposite of what they planned the whole point of the stimulus was. >> let's open it up to questions. when u.s. question please identify yourself into your affiliated with. >> any questions? [inaudible] >> the question of was going to race, clarify things a lot if you tell us a little more about the transfer of wealth to the auto industry. that was a case where it seems to follow your criteria for what this says. at the same time, clarify my

understanding of that, mr. good was pretty hard up. it is true it was silent as states go, but it was hard at the time. declining bottle. and at least in the popular perception the auto industry is in strong recovery mode. >> thank you so much. i'm not saying all the stimulus money went to well-to-do places, but much more on a per-capita basis went there than to states that were poor. it does look at the graph. let's get all these different measures, poverty, per-capita income, bankruptcy, foreclosures , unemployment. it's just not where you would think it would go. you know, with regard to general motors and chrysler, one of the

mess that has been put out here is that if we did not go and bail them out of these jobs would have been lost. you know, anybody who does the bankruptcy knows that judges don't shut down operations that are viable. that's not their point. the may sell-off certain things in order to pay the creditors sometimes, but there is no reason. in fact, the exact opposite. they try to protect those operations during bankruptcy that are viable so that they can keep going. not only do we give general motors 50 billion in direct stimulus funds, but the obama administration give them another 45 billion in terms of tax breaks. they basically rewrote the tax rules. the next 45 billion in profits are going to be -- they will be able to write off. that is pretty much of her death. those two alone, not even

including the other money they got from the stimulus, they have money for her developing batteries to all sorts of things if you look at general motors stock prices head the value is something around 30 billion. it doesn't even -- you know, it doesn't even come close to the first 50 billion, let alone the other 45 billion that is there. in fact, it was interesting. right before the government had the stock offer per general motors about a week before they saw how poorly the price was going to be for general motors stock, and that's when they announce these new tax breaks. can only imagine how low the price the stock would be if he didn't throw another 45 billion. presumably it would be near zero, you know, if it's only 37 billion right now. so you know, the main impact of that was to preserve existing

union contracts that normally would have happened, of preserved, viable operation. renegotiate things like labor contracts that were there, and they protected them. that only protected the unions are having to renegotiate contracts, but also give the of massive wealth transfer because money was taken from the bondholders and essentially given to the unions in terms of stock ownership. that has other repercussions. that makes investing in the united states rescue that it would have been otherwise. >> questions? >> sometimes i think when we discuss these things is as though we think we don't know what they're doing.

just can't quite understand. i come from the position of thinking in know exactly what they're doing. it sounds like chaos, purpose of chaos and i would like free to adjust that. >> it is certainly purposeful. look. the stimulus package was written in the basement of the house and senate by democratic congressmen, senators with the spending interests involved. basically one collection of earmarks' staple together and a time when people are promising not to do their marks. it was all done in secret after the president announced that his legislation, obama announced that when he would be president his legislation would be written in front of c-span cameras. remember that congress? that is not how they organize the new regulations on banking. the dodd-frank legislation. data and frankfort two gentlemen

who have as much to do with the bankruptcy as anything else. the people who were put in charge of fixing it. they wrote a bill which regulated everything except fannie mae and freddie mac. is almost a comedy, but it is a dark comedy. this is an administration that has imported its economics and its ethics from chicago. they've used the proper role of government as taking money from people who don't vote for you and handing it to the democratic precinct voters. you're quite right. the fact that people have lost their jobs, they don't care. this is an administration, people talk about what this and that, war and small businesses, entrepreneurs, self-employed people, a president who talks of one to cut marginal tax rates and businesses from 35 percent, highest sector in the world today, down somewhat he also wants to get the same time raise the taxes that most small businessmen pay.

the personal income tax from 35 to 40, 4045. and take away their deductions and credits. so it is very poorly -- purely a series of political decisions to tax people. the war on oil and natural gas. well, until recently when we had fracking, oil and natural gas were found in states that don't ever vote for democrats for president and to not to like democratic congressmen and senators have the weren't taxes and louisiana and oklahoma. it is all political. the fact that it is not working economically does not bother the warehouse because in their view at least until 2010 it was working politically. working politically. they don't care that the cost people jobs economically. >> i think there is one other

point. that is, you know, you go and have governments policies often create more of a problem. the call often is, well, we need even more government in order to try to solve the problems that were created. so you look at the great depression. you know, a lot of government programs. a lot of economists would go and argue made the great depression much worse and created more calls for even more government intervention. i think that may have been part of what is going on, but the main thing is i am willing to give people the benefit of the doubt. i'm sure a lot of the money was specifically done in order to create wealth transfers to favre groups, but i think they probably thought that they were doing the right thing in part. the problem is, you know, this keynesian theory i felt was dead tortilla 30 years ago among economists. you know, it is attractive to think, if only the government spends money, that will create

jobs. we see those jobs that are created. what you don't see is the money came from someplace. we borrowed it, if -- the people we barter from what has been to own something. we have texas. moving money around, we see the direct thing that the government does, we don't see what is lost. and so when they come up the jobs that are their were other things, it's kind of understandable why people would forget these types of things. that is our job to try to remind them. look, you have to look at the whole picture. you just can't look at where the money is being spent. you have to look the other impact. >> next question. >> hi. the american spectator. speaking to your point about visibility. your recommendations for the path forward to my wondering if you try to address that visibility issue. the new deal was popular. people look back on it fondly. you could visibly see that something was being done.

in times of crisis people feel motivated to try and get something done and to seek that government is actually doing something. a lot of things like removing regulations, a kind of invisible, not something that the public invisibly see. you know, the any of your recommendations address that? if not, how would you handle that? will. >> your right. that's kind of problem. you go and have people dig ditches and fill them up again. they may not be doing something very worthwhile, but at least to see the jobs. that is one problem. there are things that we can do. hopefully there are some things you can do the you can see the effects relatively quickly. at least you can ameliorate the problem to some extent. one simple idea. as of april 1st the united states is going to have by far the highest corporate income-tax

rates in the world. the problem that you have this, we have a world capital market of literally hundreds of choices of dollars more people are trying to go and get the highest return that they can go and get. you are an investor, trying to make decisions. invest in canada with the united states? if you invest in canada you have to keep $0.15 more of every dollar they make that if you invest in the united states. the gap will be getting bigger over the next year so. you know, if you can go from having the highest tax rate in the world to having something below the average, hopefully a lot below the average, all those hundreds of trillions of dollars are going to flow toward you, of the mark. that is going to not only improve investment of make workers more productive, and in a relatively quick time. when reagan changed the text decks, at that some relatively

competitive. we saw a huge investments in the united states. associated with a very quick increases in employment, increases in wages. and so, you know, people have been patient, waiting a few years out for the type of benefit here. i think if you were to go and make that type of change, just that one change, you would see huge investments in a relatively fast turnaround. >> one of the challenges that you have, the government passes a law, it affects everybody in the country and is tough test and to let that is what is making things better or worse or some other factor. we have 50 states. there is a little easier to compare what works and what doesn't work. i think that gives you some of the transparency the you're asking about. what i have here is a chart. the rich states have a republican governor and republican legislature.

how the 24 states, the republicans, the governor in both houses of the legislature get together they can pass anything. there are 11 blue states, the democrats have the governorship and both houses and can and are turning themselves into greece. california, illinois. then there are five yellow states with republican have both houses of the legislature but not the governor. three green status for the democrats of the legislature, but not the government. the way status with legislatively. what is happening now and is doing to become even more true over the next decade. these killers on the map are not likely to change rare much of the next two years, redistricting, the republican states a redistricting themselves to be republican state legislatures, and the boost its a redistricting themselves to be democrat state legislatures with the next in years. for the next two years of republican states will be spending a little less, taxing a little less, having less regulation, and doing better on

tort reform. you're also seeing school choice . try to raise taxes, not performing their pension system, raising more spending, having more regulations and giving the labor unions, the trawlers more of what they're what. we really are seeing a sorting out, not a north-south split were echoes versus the center of the country, but look at those red and blue states. people are going to be continuing the process of moving to lower tax states with no income tax of low-income tax. another decade of that and live -- instead of having good luck in d.c., we have gridlock in the democratic senate, republican house, and did not necessarily pass big legislation now. in 50 states usc quarter numbers not have gridlock but just the opposite. republicans get together and cut taxes. although republicans get

together and teacher tenure or school choice or more parental choice. all the democrats get together and continue everything that they have been doing to make illinois the place de ville amelya state. so the country is going to be moving in dramatically different directions state-by-state, and i think that will help get some of the clarity and transparency about what works and what doesn't. we already see that now in the failure that our american cities run by democrats verses areas that the democrats don't have that kind of control. 20 miles outside of the democratic mayors control and you have schools that work better and those that are paid better. clear as ago state-by-state. >> another question? >> hi. just got the book. haven't had a chance to read it.

what to ask you about three things. rule 157, no one ever talks about the impact that had been helping bring the economy down. publicly held companies. second, the fact that this administration has the least people in it that had ever even held a private-sector job, let alone created job. the impact deasy there. third, that europe now is finally recognizing predicted their debacle and what can be learned from that. >> okay. well, i mean, europe is further down the road in terms of problems. you know, we can see some parts

have learned. germany, for example, has seen its unemployment rate declined very quickly after the recession it. they did not go and follow our policy of going, greatly expanding government spending or, you know, huge deficits that were there. in fact and there were fairly innovative in trying to reduce some of the regulations that they had. you know, other parts have gone down the road. i mean, like greece are other countries. they continue to borrow. hopefully it is a warning to us. we have any huge increase in debt. so at the end of bush administration, publicly held debt in the united states for federal government was about 58 trillion. now it's about 11. that's almost double and three years. that's bad. we think about the fact that we may be talking about 100,000 per family of four in terms of debt.

people have to go and as if they get much for that. but looking at countries like greece or portugal, you can see how quickly these things changed each 1% increase in interest rates means about 150 billion more than you have to pay in terms of interest for the federal debt. just a few percent increase. you may be talking about $500 billion a year. what may be 13 trillion debt, near 2 trillion. when you start having those types of deficits and that increase in debt, if your credit rating falls more, your interest rates go up. you quickly find yourself in a situation where what was difficult to pay becomes almost impossible. and in your credit rating falls more common interest rates go up even further, and you quickly find yourself in a real crisis. that is what even a small

country like greece is found. they haven't tried to solve the problem because others including the united states bail them out. as the your first question, what caused the problems, lots of regulatory issues, but the clear one was what happened in mortgage markets. we go through this and talk about how people like larry summers and geithner and the role that they play with obama and during this. if you force banks or mortgage companies to make loans to people who they didn't want to make it to but were forced because of threatened legal action by the federal government, people don't put down deposits of homes, that can work as long as the prices of homes go up. as soon as they go down people start getting under waters of the value of their home is less the mortgages in the walk away, then you have the whole thing spiral out of control.

>> erupted question a private-sector experience. i don't know if it's counterintuitive, but i am not a big believer in bringing businessmen into the it -- be governors are running politics is necessarily good idea. businessmen spend their own money and they get to tell everybody who works for them what to do and actually do it and fire people don't do the job if you need to be governor or senator or president, this is not the way the world works. a completely different skill set. scott walker, the governor of wisconsin, saving this wisconsin and turning it from red to blue and changing it so that unions are not allowed to the baena and not keep all the teachers, get rid of tenure, a magic -- allowing thousand to madison themselves. i'm scott walker, if he had been

a banker or a business guy, i'm not sure you would have the skills said that he did have. a local elected official and knew how crippling those labor contracts were and that they need to be set aside with the reforms it did. unions allowed to exist. not allowed to impose work rules , issued on pensions, raise their pay the left ear british teacher to near, all of those reforms were ones that scott walker could do and new woodwork and understood because he had worked in the government. i think the question is not so much that the obama type people don't have private sector experience, many of them are academics. they don't like the free-market,

the business community. irritates them because their parents told them when they're young if you work really hard and study hard in school you will be rich, which is not true. , these people got a's and became professors and are not rich and see the guy who dropped out of college who has a billion dollars added your to expect of them. life is unfair because mommy promised the fed did well would be rich. so i do -- i am much more value skills in managing government. connecting to somebody who understood the concept of individual liberty and favors it and somebody you may be able to manage the private sector well order comes out of technically the private sector, universities. not necessarily the state.

but who is hostile to the concept of individual liberty and property rights. they don't have private sector experience. that is of the problem. they don't like the people in the private sector. we are talking about the transfer of wealth from people who are did to people who got checks from the government in the stimulus package. you see that also in the energy field. what is this the administration doing? taxing energy networks, oil, natural gas, and using it to subsidize energy that doesn't work, i.e. does not produce energy at a reasonable cost that anyone is willing to pay in a place that somebody needs it. windmills and solyndra and algae in all this stuff. the reason they call it alternative energy is because it is not energy. they don't refer to nuclear power as alternative energy or gas or hydro or any of the things that actually produce

energy. those are not alternative. alternative energies are things that are not energy until you add large quantities of money to them. then they can't pay for themselves. just as with the stimulus, taking money from where it was our and and where it was valuable and 200 million people decide. one bureaucrat he took it from them and put it where he thought it ought to be, substituting one does judgment for 300 million. move it from an economic used to an uneconomic use. energy policy is that on steroids. >> the center for urban renewal education. my question is regarding inflation. you touched on that very briefly. considering it goes hand-in-hand with spending and increasing the debt over time, we also teston

visibility. you can necessarily get as much visibility as you would like. however, he is being painted the world over as the savior of the global economy. how do you approach that? i know that i get into several the buckles myself, great thing. the message that is there, this keynesian poster child and we are not confronting that. >> interestingly you do have, the suggestion we are at the federal reserve. shutting down. how about putting it? if you wonder, you didn't think there was a problem, you mind if we look? don't look. really? why not? why not on it? i think that is an important

conversation piece. we have to worry that when somebody prince a lot of money will end up with inflation. it's a huge concern. >> already come through in terms of showing where the fed put trillions of dollars to bail out banks worldwide. not just in the united states. and it should be something that we debate rather than not. you know, as far as government spending, i don't think it causes inflation. we can talk about waste, we can talk about things that would have given us a higher return. we can talk about how it lowers their wealth. basically what causes inflation is an increase in the money supply. you know, it's kind of like if i had twice as many apples smart as i have today the value is going to be less.

more dollars to go and buy something than it did previously . borrowing does not cause inflation. government spending doesn't do that. there are lots of problems, but i would say inflation is related to it. >> i suppose i should have clarified a little more regarding the fact that he was ideologically regarding his approach to his entirely keynesian. >> basically controlling the money supply. keynesian, large deficits. i mean, a couple of times, even a year-and-a-half ago, expressed concern about the law's deficit. i don't think he calls himself a keynesian. the mayor may not agree with everything he has done, but, you

know, the federal reserve has not been to related to the type of keynesian policies. >> town hall. other government money was spent. to you have any positive or negative feelings on some of the broadbased tax cuts contemporary that were included? >> there were done the wrong way. one thing that reagan, i think, try to get across to people, the important thing is a marginal tax rate. how much do you have to pay the government for each additional dollar you earn? government takes more added each

additional dollar, yet not going to have the same incentives to go and work hard and expand the pie as you would have otherwise. the problem is, the type of text us that we had, credits and deductions to mike that phasedown along with other ones. phasedown is the more money. what happened was, the obama tax cuts lowered the average tax rate that people paid, but raise the marginal rate. you have to pay the official marginal tax rate of $0.25 on are in the dollar, but says he lost these credits the you had there is you earned more money, the effective rate could be 40 percenter so. and so the important thing there is the marginal tax rate. obama raised his tax programs polaris the marginal tax rate. >> the tax credit is refundable, spending.

if they are ready to check it's not a tax cut, its spending. a lot of what you would try to call tax cuts were actually writing checks to people who did not have a tax liability. >> how can a candidate as the question to voters on the street, are you better or did they -- better that you were before? give some simple understandable examples of how these policies have been at the bottom of whether they're better off for not. >> well, to the discussion we are having now on health care, people are told one thing when obama ran for office. obama was a very good candid it into a dozen date. he was not a very good president a year ago he could be president

then decided to be candid it again and is now spent this year being a candidate for president, which means everything he's doing is political as opposed to actually policy. that is what democrats and the senate don't actually read a budget. the president likes to talk about things he wants to do. anything the president are the democrats in congress tell you, we want to do x, well, for two years they have the house and senate and presidency. they could have done that. when they tell you what to do something is just not true. if they wanted to there would have. everything they haven't done is on the list of things, one, they don't actually wish to do the want to talk about before the next election or as the president pointed out, they have a collection of things they want to do better not talking about because they want to get past the next election. you can only imagine not just on defense issues but taxes and spending, the kinds of things they want to do that they don't feel comfortable telling us

between now and the last time we ever get to vote on obama? on health care they said it would reduce the cost when they ran past obamacare. it is clear it is increasing health insurance cost. and total cost of the government is now twice what they said it was going to be. your point to what they said there were going to do, what they did. people know, questions of whether you approve of how obama is handling health care and the economy, people know there were soft. i would hope that the people running to replace obama and reid and democrats in the house would focus on how we can improve things in the future. the american people want to be optimistic. we need to talk about what we do to fix things, not spend their presence whining that every

probably ever face was cause less somebody four years or ten years ago . point of the mistakes that were made and then immediately switched to a conversation about six things. >> the number, type of economic numbers you point that to show how things have gotten worse over time, you know, one doesn't even know where to start almost. whether you look at the increase in poverty during the recovery, the number of people in the labour force during the recovery. as i said, we had seven more million people not in the labour forces during his recovery, not even looking at the recession before and. look at what happens to wages. the drops that we had in wages, these are things that you would normally see during a recession, not during a recovery. and you looked at the number of new hires, the bureau of labor statistics has been collecting

these numbers since about 2000. looked at between 2,000 when the recession started officially in december 2007, about 53 million were being hammered at -- hired every month. during the recession that sell -- delta for one. during the recovery is gone down even more, 39. i mean, you don't expect the rate of which jobs are being -- people are being hired for jobs to fall even more during a recovery that was occurring during a recession that was there. it doesn't take a lot to convince people that we have had this drop in unemployment. you can see that the big drop that we have had is primarily from people giving up and not looking for jobs. you are all the classified as unemployed as long as you're actively looking for work. we can break it down as we do in

the book and to show how much of the drop to the extent we have had a drop command we have never had a recession with 33 months into it you are still talking about over 8 percent unemployment, 33 months and recovery were years of talking about over 8 percent unemployment. how most of the straw, the and employment we have had has been people giving up and looking for work >> stabbed one more question. right here. >> hi, grover. more of a personal question for you. i saw you recently on to john stuart show do you think he give you a fair shake? >> he was fine. i have done this show once before four years ago. would you do, they do it live. we do about six minutes that goes on television that night. the film that may be 6:00 and

then it goes on 11:00. after they do this six minutes straight into view and then do what they called the extended interview which is they sit down and talk more. i would tell the the other sixers minutes. that goes on line. we did 20 minutes. stewart is a liberal, a serious person. he is cynical. he will call up obama when he thinks he is being nonsensical. the same thing to conservatives. bellmawr is a left-of-center activist who has to be on tv. i have great fun. we did half an hour back-and-forth six minutes of which was on tv and the other 20 something minutes online. it was great fun, very serious, but he kept asking questions. he had lots -- he had a great staff, all the numbers.

you couldn't get anything around the past. very well informed. but it was fun. you just always have to remember that he is a comedian. you have some points to make. let him do the jokes. >> one less thing, when bill clinton ran against george bush in 1992, the recession had technically been over. bill clinton was successfully able to run against the worst economy in 50 years. do you think obama setting these more positive statistics because we are typically in their recovery and runs a similar risk of appearing out of touch? >> obama has the advantages that he has behind him the three networks cheerleading. there are more cable shows, more talk radio opportunities. there is the second media as well as the establishment media.

so i don't think it's you can quite fit -- said. the other part is, too many americans know somebody out of work, no their own wages are going up and other problems. i don't think you can imagine an economy that isn't there. if you read time and newsweek between now and the election you would believe that the worst problems have been solved. >> well, been doing his best to pay their recent few months as being incredibly rosy, having a little bit over 200,000 jobs. seasonably adjusted jobs. the real question is about, you know, within the rules that we use right now actually are useful in the car recovery. such unusual recovery. for example, 200,000 jobs created in january, only a little bit more than the 160,000 you need just to keep growth

with the increase in working age population. the reason why we actually lost @booktv million in january, only because of the seasonal adjustment that you get that increase, and it was so bad a few years ago. when they say to 7 million, they compared to what it has been in the past. look, this is a relatively smaller job that we had years ago. so everything else, the same base line, five years ago, we would actually have a job loss. i think the reporters need to go and explain how this is such an unusual recovery. i don't think there during that. of plea -- you look at polls, people themselves know whether they have jobs. then know whether their friends have jobs. i think ultimately that will make a huge difference. >> i will thank him for being

with us in you for coming out. please get this book. it is important. [applause] >> visit booktv.org to watch any of the programs you see here online. ted the author or book title in the search bar on the upper left-hand side of the page and click search. you can also share anything you see easily by clicking a share on the upper left side of the page and selecting the format. book tv stream is live on line for 48 hours every weekend with top nonfiction books and authors. booktv.org. >> give us kind of an epidemiology for people who may not know the blow pueblo of in thicker? the first half of that. you did talk about it showing up . just describe the beast here. >> well, the warm in self popped up. honeypot. it was on its monitor.

what happens is when the new piece of mel laird drips into his base a line will pop up on his monitor. all these readouts defining what this says. one of them is a column which indicates how well recognized this virus is to the major anti virus industry, vendors. this one was actually done, that was the first to get his attention. the next thing, replicating so rapidly. within 24 hours it was shivering -- shoving every other piece out of honeypot. the only read on the screen was conficker, conficker, conficker. i literally had nothing else to work out the point. what they discovered at sri when they began to dissect it was that it was very sophisticated. it was highly expected. one of the things that it did, check to see if the computer it was about to in fact had a

ukrainian keyboard. it would self-destruct if the computer did. basically, of course, what a warm like this does is penetrate to the core of your operating system and replicated self, san debt and in fact every other computer on your network and also begin calling home to a remote control and. the remote controller, the way that you would ordinarily kill a bug that is often said. if you could intercept a communication you can effectively kill the bug that. to prevent that the war and had an algorithm that generated randomly 250 new domains every day. the bought master had to be behind only one of those on a given date. if you wanted to cut this thing off you have to shut down all 250 domain's every single day. and so that was one example of a

cunning major of the think. .. mention them. actually began buying up those domains and putting them on his credit card, which gives you a sense of how ad hoc disaster was just up the. before we go farther down the path, i just wanted to get back to the question, what kind. the question, i have a very old e-mail address and have not visited. [laughter] >> at the most of the people here know. >> since most mel where is distributed by but that's, the level of spam is some rough correlation out there in the world with the level of our inspection.

so i remember about a year ago, a large but that was taken down. i have to say if a look at the number of spam messages every day, it looks like it is probably ten to 20 percent worse than it was before that happened . mia get indicator of the state of -- >> it is a perspective situation the operation you're referring to is b107. the kind of setback and laughed at some other parts coming in. one of them was the zeroth attack on spam, 5%, 10 percent, and one of them was the 30%. what is the real number? and determined it was a prospective thing. caller friends and hobnail. do we do anything good for you guys? well, we see a drop-off in spam of .07.

>> i was hoping for a bigger number. the problem is they have systems in place that prevent sending a spam from non known in. :. so they had been blocking a lot of the spam that was sitting already, so we had a small impact. some other organizations, particularly private companies sought huge drop-off because the big spenders would be sending e-mail because they knew that we were blocking. i'm assuming you have this the same thing. similar countermeasures. they say that they have largely managed the spam issue, but the thing that we saw is sending it out so whole bunch of different domains. so we definitely saw hobnails families, but that would never make it into an in box because of filtering. i don't know what the real number is. when we start to look get these things and go back to the original question, look at how

many millions of my customers are being impacted by this. it's running something. when we looked at it a little differently. spam gives us cause to sit in the courtroom and say, hey, they're harming s. i am also looking at how many my customers are impacted. when we start to look at this in particular, announce that it would reach out. it attempts to download a patch and very specific way. fingerprint that so that we knew how many of the machines we were dealing with. one of the criteria we look at, and the conficker it was abbottabad, how many of my customers are being made to the impacted? so i think this is not great, but i really, the past couple of years have really seen a surge in internet service providers and technology companies taking more of an interest in knowing the private companies can do more to protect folks.

i think the dark days are behind us. [laughter] >> i think we're getting that. as we start to understand that there is more that we can do, we're coming out of that. at our last conference about two weeks ago we have been doing conferences for like ten years now. >> digital solution. >> we are starting to see more people the but how they can be more operational, take down. i would love to see spam go away i think from a perspective, their is a certain perspective that shows that that might be the case. there might not be any change. still in infancy, so we don't know. >> this book is a whodunit except i still feel that we don't know whodunit.

i just want to check in with you guys and see, you know, where we are. there have been a couple of things that happened. take me through the law enforcement aspects of the warm. you guys feel that you have conclusive sensitive to the authors were or are. >> my suspicion is commend i can say with any certainty, that the authorities do know who was behind it. i suspect that the difficulty in apprehending them has more to do with diplomacy, dealing with a foreign government, dealing with foreign laws and police agencies that it does with actually finding them. we do know that they are tremendously sophisticated programmers. the reason i use the word pro is that it is almost certainly not one person. the worm conficker to mr. is such a high level of proficiency in so many different areas, is

literally impossible to manage -- imagine that one person would have that level of ability in that level of knowledge in so many different areas. so the likely culprit is a group while funded, probably by organized crime who set out to create a very large, very stable spot at which could be used as a platform for all manner of mischief, money-making by far. if he looked at the early indications of how conficker is being leveraged, strong ties to a fake and a virus, strong ties to some type of affiliate program, the keyboard check is really interesting because nobody wants to be arrested by local authorities for compromising machines in a country. really looking toward eastern euroo