called semper fi. thank you. ♪

>> i started as a copy boy for the "new york times" and then the "wall street journal."

cannery have your attention please? we want to get started with the program. to introduce our program is a dedicated activist ms. davis was very active at hearst call organizing 9/11 never forget project now she has graduated will be at the penn state law school in the

fall. please welcome, jolie. >> thank you. i am also an intern at scholar for the summer and i am lucky i have been given this opportunity. the on america foundation that young americans get to know the strong national defense and free enterprise and traditional values. as the conservative movement it introduces thousands of americans to these principles. we provide conferences, seminars, educa tional materials, internships to young people across the country. visit the web site at

yaf.org. i am going to penn state law so it is my pleasure to introduce a fellow lineman lineman, rex santorum club that prior to running for president he was a voice for conservatives everywhere. serving two terms in the house taking on special interest groups. elected in the senate 1995 he was part of the gang of seven expose thing the congressional post office scandal. also the author of the landmark will form -- welfare reform act to get off welfare and into the work force. he outlawed the hanus procedure partial birth abortions the unborn victims

of violent act and combating autism act because each and individual has value and the need to be protected. [applause] senator santorum has fought to maintain fiscal sanity in washington with the balanced-budget and line-item veto. to reform entitlements, cut spending even adding up the cost of the spending bill. it makes them one of the most conservative senators and pennsylvania history. with obamacare to go bottom up with patience driven care system. note with a grass roots on my committee community -- committed to family and freedom and

opportunity. senator santorum is the author of it takes the family than a year times best seller. you received it this evening. not rocking the sweater vest this evening but still giving every person a voice. ladies and gentlemen, rick santorum. [cheers and applause] >> thank you. to standing ovations. i them about done. in joe your time and happy valley. and for your wonderful and kind words in the line and was able to chat briefly and

am grateful for your support. there is a group here who helped us on the campaign. 1% amanda, her father might was our campaign manager and she was very active on the campaign. thank you and dad for your great work. [applause] it was an amazing journey running for president. in all cantor, when i was asked traveling around the country one year-ago, are you running for president? clough i would say i am walking. [laughter] that is what it was. what motivated you? you lost your last race by

18 points? you didn't have any money? no major supporters or real endorsements of any kind? what possibly sought you could take the position to be a candidate after being at of politics 4.5 years and losing your last race? the answer was a look at the situation in this country. others see it the same way. that this is a landmark election. a turning point* in american history. you hear politicians and corridors say this all the

time. i have never said that before. i have been in races 22 years now. the first in 1990 at the age of 32. i never said this was the most important election. i never felt yes, things were bad and difficulties in the '90s with national security issue, events of 9/11 but i never felt things were added tipping point*. barack obama has denigrate favor for the country. in all sincerity.

we have been on a slow road to serfdom gradually giving our freedoms away, believe things the government can do better for us than we can do ourselves. it is inevitable. the founders understood that establishing freedom was the easiest but the hardest part would be to maintain over this corrosive thing called time. the further you are from the sparc that created this great country, the harder it is to have the feel of the founders to maintain the great principles of our country was founded.

we have been blessed with enormous success. be honest. america changed the world. from the time of founding, life expectancy was between 35 and 40 years of age. an agrarian society. for perspective go back to the time of jesus christ about 35 years of age has much changed? zero little. not much. in 200 years after mayor ted did something revolutionary revolutionary, given a template to transform society, something of an unknown and unheard of in history, we don't talk much

of and we ignore and don't teach it. the revolutionary document called, what? not the constitution. wrong answer. [laughter] the declaration of independence. i knew most of you would say the constitution. the operators manual of america. but not who we are. we are the declaration of independence. that is what makes the special. these words that we all know, we used to, we hold these truths to be self-evident that all men are created equal, they are in doubt by their creator

with certain unalienable rights among them "life, liberty, and the pursuit of happiness" could roll off the tongue of every citizen for decades. they were at the core of what it meant to be an american. that is not like being french. [laughter] [applause] i am not poking the french. i don't mind it but it is not like being british, or i italian or jewish or arabic. if you are the iranian york iranian or syrian because of ethnicity. america is not to and ethnicity.

we're all hyphenated americans. what makes you american? my father and grandfather came to this country and stepped on the shore became an american because they believed a certain set of values, a certain set of ideals. america is an ideal. you can go 50 years to france and never become french. you can be here 30 seconds and be an american. that is what makes us different. based on the senate of ideas and principles. people say we want to change and transform america, that

means you fundamentally take away the core of who we are, that is the declaration. god-given rights. then there was a french revolution and the american revolution. the difference? the french was based on the quality, pretty good. we can talk about that. it is good but it can be excessive and the quality. we can explain that it is very current in america today. liberty. could. absolutely. part of the founding document.

the third word was fraternity. brotherhood as opposed to paternity which is fatherhood our rights come from god but in france the rights came from the consent of the government. when the government formed, they ruled with radical tyranny and a reign of terror. lafayette who fought with george washington during the american revolution and returned to france for the french revolution had to frames in his home. one was a framed copy of the declaration of independence. the other until the day he

died remained empty. he was looking for a similar document for france. something to put a limit, a higher calling, a higher responsibility of civil and moral law. that is what the declaration has done for our country. four times the word god is mentioned. define profits, creator, judge, all of these point* that america was founded as a great moral enterprise. would get the three rights including "life, liberty, and the pursuit of happiness."

life, the foundational right given by god. cannot be denied but yet we do in this country. liberty. a big movement to clean college campuses now. liberty. the very, very careful with what liberty really means. those will distort it as our founders meant it. liberty is not the freedom to do what you want to do. yes it is freed from government telling you but it is cheaper because of the next word, pursuit of happiness. life and liberty for 3

happiness. life and liberty for what? to pursue happiness. if you read locke and other philosophers at the time in the virginia constitution was life liberty and property. they said that was insufficient to. of that does not grasp the real purpose why we declare our independence. happiness. think about it. life is important. liberty follows. it is clear. you need freedom to pursue so government doesn't constrain so you can be freed to do what? happiness. what is the definition today? joined. pleasure. contentment. right? that is what you would say.

not our founders. they thought it different. look at the first webster's dictionary includes the principal, true happiness comes from doing what got calls you to do. what you ought to do will results in true happiness. maybe not immediate pleasure but the freedom what you ought to do. not what you want to do. so you build a great society of virtuous people with limited government to build a great and prosperous society from the bottom of.

235 years life expectancy has more than doubled going from agrarian to industrial to technology society because government believes in your. ladies and gentlemen,, that is what is at stake in this election. if barack obama is reelected, i fear the great noble experiment is on its way to close. 50 percent of americans pay income taxes and less than half receive government benefit. with obamacare ultimately 100% of the country is dependent on the government for benefits. as the u.k. will tell you you, maggie thatcher, as

tough as she was she was never able and campaigned she would not touch the health care system. it was a sacred cow. she said in her days after reagan, when she was compared she could never accomplish what ronald reagan could accomplish because of the british health care system. wants people are addicted and dependent, it is very, very hard to take that away. we have to win this election. the future of the republic is at stake. so i decided to run for president.

and tell people what i told you. here is why. despite being outspent many multiples to one and no press coverage and at the debates they throw me a question about abortion or gay rights, to reinforce the stereotype, in spite of that to talk about the core principles and values the election house to be about to who we are. the problems are economic but they're more foundational. to the family structure in america. we talked about those things.

amazingly, people came. we ended up winning iowa and 11 other states. those of you on college campuses, you think it is hopeless. when i talk about the principles of who we are, go back to the declaration. ask them if they'd three. we are not as divided as we think. we just need to be anchored. we can use as a starting point* or what america is about. walk them forward. what does that mean?

what is the whole idea of god-given rights and fundamental rights? uc what happens the government tells you how to exercise your rights. that is what they are doing with hhs, imposing their will on people. against their fundamental freedoms. i am encouraged, a greatly encouraged, there is a wellspring of people who see what this time is about. they are anxious and stepping forward. i have no doubt this election or the next one that the american in dna that is different, the vast

majority came here because they wanted those things. your ancestors came here. they did not stay behind. i would think courage you to be happy warriors. talk about the greatness of our country. what we are, how we transform the world and go back to the pre-revolutionary days, subjects of the king king, servant to the government, what we were prior to 1776. and where we're headed if we don't do something now.

nobody will be affected more than the young people. you see the effects with this economy struggling because of the oppressive government and increasingly regulatory scheme of taxes. and anybody who with successful minimizing accomplishments celebrating the collective. this is not america. i do believe people see it. i am optimistic but we have to communicate big things, big ideas ideas, fundamental principles. if you do, i am convinced convinced, you can start changing hearts on college

campuses. changing hearts all over america. steady and understand who we are. what we are about to not be afraid to preach to the mound tops. i will be happy to take questions. [applause] [cheers and applause] >> no questions. thank you very much. [laughter] >> senator i am from the university of arkansas.

had you been accused when you will is in the senate your evaluation of the pro-life movement?

you studios would you have pictures of yourself with you in the womb. you are the generation that has the sonogram pictures of what you look pictures of what you look how can you say that is not me how can you say that is not me? companies to not a person? have you say that's not a human life? have used it as a blob of tissue? how can you at least 40 sonogram and so you can kill that child? you can their toes and fingers. i'll never forget what my favorite movies. and they'll find this weird, but it's juneau. i will never forget, what's your name? alan -- page. or remember her walking into clinic to get the abortion and that little girl who's a friend of hers from school, not knowing what to say to stop her from getting abortion at the supper conversation with the aborted the discussion of the fact this friend of hers that she knew from school was walking into an abortion clinic to get an

abortion. she just didn't know what to say. and as this little girl watch back of a teenage girl walked by to get an abortion, she blurts out, your baby has fingernails. and ultimately that stopped her from getting abortion. what stops or? the truth. the truth. you can't avoid the church of what abortionists. for so many years you don't realize, the generation after generations of americans were lied to. girls were lied to, young men with type two. and of course you can believe that because the supreme court says you can kill this child. it must make sense, but now you have the reality of what life of the womb is. it is genetically human, just like each and every one of us is

alive, a human life. and what we have done in this country is drawn a line between human life and personhood. we have drawn a line that some people -- some in human lives are protected under our constitution and we are envisioned to be good in others were not. ladies and gentlemen, once we create lines based on fiction, based on where you are, location , then we can draw other lines. when five people in this country decide who lives and who dies, which is exactly where we are in america today, i believe the young people in this country are going to reject that. i think the understanding and knowledge of the gravity of the fact that a third of you -- a third of you are not here. over one in three pregnancies in america and an abortion.

a third of this generation are not here. the consequences of that, the cures that have not been created , the technology, the works that inspire all about us, that didn't occur because they just were given a chance, i think were better than that. your generation come as much as i'm sure you're criticized as being the entitlement generation, you're also the generation that is seeking purpose, you're the generation that if you ever notice most of the advertisers on television when they go after young people don't talk about it's cheaper. they try to appeal to your sensibilities that there's something good to be derived from participating or doing something with this product. they are appealing to your senses that there is something beyond just how much it costs to

value something. i think that is a good and noble thing that this generation is known for and i think it will be one of the things that will transform the pro-life movement. another thing is the pro-life movement has grown up. it's not pointing the fingers and saying you're bad for doing these things and stop it altogether instead of crisis pregnancy centers around the country and said we love you. i understand it's hard and we want to help you with whatever decision you make. the pro-life movement has been and must always be about love. it has to be about love for the mother, for the father and for the baby all. we are much more about that and i think we'll continue to be much more about that. that has always will transform. [applause]

years. >> you mentioned liberty in your remarks and i just wanted to sort of get your comment on what a common perception that a lot of youths have today, which is that what people ought to do is be able to make sure that all americans are able to do what they want to do peer but then again of course as long as it doesn't hurt anyone. can you comment a bit more about how to counter sort of that assertion, or seems to be prevalent on youths today. >> is a growing understanding of liberty. and that is a freedom from as opposed to a freedom for her. and it is this very narrow view of liberty that everybody serta should have the opportunity to

do whatever they want to do as long as it doesn't hurt anybody. but of course, what does that mean? what hurts people? i want to be able -- an income i drive up memory for something. i see a red light. freedom from government oppression. right? i want the freedom from these unjust traffic laws. and so i just blow through it, right? you know, might not hurt anybody. maybe someone's coming across the intersection, but maybe someone will be some time. so i'll sometimes you may not hurt anybody, if you don't respect the laws, if you don't respect the natural order of things and you feel like you should be removed from that constraint, government imposes laws collectively based upon the

collective will of the public as to what is right and what is wrong. and freedom from without hurting anybody, you create a society that is free from collective moral judgments. i want to use drugs. it's my own home, not going to hurt anybody. but you do hurt somebody. you hurt somebody everything from how those stats are made to hurting yourself, hurting your inability to do things, hurting your family members. your people into the things that are wrong. and society then makes a judgment that we are going to put my minutes on most things. we are going to put laws in place. we are going to impose the

values of our society to allow the ever teach it or if there's not constraints on liberty, there can be no liberty. if there is in a constraint encrusting that intersection, then everybody will suffer. and so the idea is there has to be some object data for these laws other than letting people do what they want to do because we can't let everybody do what they want to do. to the objective has to be a higher order, a moral order. so that is the problem with this idea -- i do want to call a libertarian call libertarianism whatever you want to collect, that government is the problem, government is back, people should do whatever they want. and that is simply not the american view of liberty. there has to be a constraint on freedom for freedom to exist. on the question is, what is the

basis of this constraints? the basis of the constraints by and large in the founding of our country were based on judeo-christian principles of right and wrong. and now, we are seeing on the left and at times to change that, to reject judeo-christian principles and replace it with, they say nothing, but of course that's not true. your place without income a different set of principles. that approach on the rights of them for getting rid of these things, too. artificial constraints because i want to be able to do. well, when you remove this constraints, you replace it with something, even the absence of a constraint is a moral decision. so that is why we need to think very carefully about some of the fundamental changes in tact

about in our society and the consequences of those because they are not the absence of moral constraint or absence of legal parameters. they are an imposition of a different set of legal parameters. the mac senator santorum, first up i want to thank you for making that cool again. my question for you is i am from -- my name is david graham. he graduated from seattle. washington state along with a couple other states have recently legalized same-sex marriage last week the democratic party made a part of the platform. the trend seems to be moving in that direction. what are your thoughts? are we in the wrong team are like is it going the wrong way at this point? >> i would say this. acting as 36, 37 states or something like that has noted, everything from maine to california on this issue.

every time it's been vetted, marriage has one. and you say will help you not been? how can a society where as i'm sure certain your generation is bombarded by the cultural and educational establishments and a lot of other places with one point of view on this issue, and it's clear that younger people have a different point of view on the issue of managed than folks who are older. yet every time it's been put up on the ballot, it's lost. why? well, i see a couple things. first off, america generally speaking have the attitude that if it's not hurting me, then what's wrong? what's the problem? the problem is no one really had -- until you have a boat,

and tell you is something we make a decision, no one thinks they're what the consequences are a change in the marriage laws in this country. once we have a debate about it, people realized by the way, this does affect me. this will affect my marriage. it will affect the country. it will affect my children. it will affect my church. and so, we go through the debate. we talk about how to change the the definition of marriage, then if you seek to implement that, you of course let people marry. let's look at some of the other consequences of that. with the educational curriculum in this country look like with respect to marriage? we see in a lot of schools and states have adopted it, your textbooks now that like the fact when you have stories about

people, you have stories about married people who are heterosexual, married people who are. so now that is taught in our public school systems and is normal and right and find irrespective the beliefs of the parents who are involved. see your point to see education and curriculum change in this country. you are going to see the impact on religious affiliated organizations. we are seeing it already. we've seen it in several states, were not the church itself, the church related institutions are denied tax status, nonprofit status or denied, for example in the case of boston, boston catholic church would not be same-sex adoptions, said they were told they couldn't do adoptions. it is the largest provider of adoptions in the state of massachusetts. so you will see a whole variety

of religious affiliated organizations who will be denied their five o. one c. three status or federal funds were to be able to participate because we don't participate with organizations that are dedicated. and that will be another common phrase and what will come next is hate speech clause, but she can't speak. i may have met one canadian. i think there is one young lady from being career. there she is. but there have been -- gay marriage has been for four or five years now and other types of criminal and civil proceedings brought against people, including fashion trencher member of the diocese's bishop was, but then on a pastoral letter talking about

marriage can was told by the state he be charged with a crime, preaching the gospel of jesus christ on marriage. u.k. that can happen in the united states. it will happen in the united states. we do not give five o. one c. three -- charitable exactions to bigoted organizations. and when we transform what marriages in this country, we will take everybody who is an orthodox believing christian and turn them into hate speech purveyors and they will have to change the way. the way they live their faith out, which goes back to this broader issue of attack on religious liberty in this country. attack of religious liberty is not just about what you can say in church. how many people believe the exercise of religion and how you worship on sunday? know, because as believers we

understand our faith is more than what we do on sunday. so we do on monday, tuesday, wednesday and thursday in our lives, and i were, in and what we say outside of church and what we are seeing is an attack by this administration. but we see an attack by the left on religious liberty and it is going to and will amp up like you would not believe as this debate continues. this is a direct assault on our judeo-christian heritage. you say well, it won't make any difference. how can you say that? will make any difference in the lives of children. how can you say that? one study just released the other day was the best longitudinal study on the impact of children being raised in same-sex houses. you know what happened?

academia and the media went crazy. they tried to throw this guy out of the university, deny him tenure, threaten a son named. why? because he wrote an academically bulletproof study on this issue, but it came out with the conclusion that the laughter didn't like. the intimidation and intolerance is unbelievable. we see what's going on break now with chick-fil-a. can you imagine? can you imagine them a read, pick small town in louisiana, wirral louisiana and they were not going to somebody who says they are for gay marriage of a businessman in town. can you imagine? were not going to let starbucks in our town because they support gay marriage. can you imagine?

what would have been? yet it's okay for the mayor of boston and chicago. wow, it's not okay. like i said this is not just about the economy, the selection. they're huge, cultural, fundamental things at stake in this election. you know how the democratic party, not saying they are for redefining the basic institution of our society. he put on the street here in washington d.c. and you'll find a place called the archives volumes and volumes -- a talk about this in my book, studies called environmental impact statement. if you want to do something to change the environment, like building a bridge across a swamp, you've got to spend millions of dollars and prove to the federal government do what you're going to do is not disturb the ecology with the environment that you are affected by the new structure. jack, we are now in this brave

new world fundamentally changing the basic family. and what evidence have you heard about why this is a good thing for society other than apology. equality is a good thing. but it all depends. if the government has done the business of equality to resolve, is that not a good thing, but everybody's the same? is not a quality good? is everybody the same? of course not. of course not. none of us are the same. object hooghly falls. so where does the quality come from? for his sister and the quality come from? we are equal in the eyes of god. that is where this term and society comes from. god sees us all as his children an equal irrespective of our abilities. objectively we are not equal. some are smart, some strong.

so now who will determine the quality? aced upon whether? it sounds good. but it is a false equality. third innings aren't equal. communism is not equal. to capitalism. some of say they are. they are not. one is an abject failure for society. one perna and is consistent with how societies work and how people function industry with a lot of other things. be careful with the quality. be careful to accept a false view of equality, a government dictated view of the quality that is not consistent with nature and the natural. >> at evening, senator. thank you for coming tonight. pendulum away from brandeis.

i decide to say one quick thing. inside that you touch on every question is going to last. as there will ardent and practicing catholic, i will say my waveforms by reason and logic. but when you think every come to chick-fil-a, starbucks, oreos, why did they have to dependence on political issues? why do you think that? b. mcabee asked the folks at chick-fil-a, they have not expressed any particular issue. this all started with an interview done by a member of the executive team of chick-fil-a to a religious publication, talking about his faith. i mean, does anyone really believe that chick-fil-a is a biblically-based company? i mean, they close on sunday. what rational business --

[applause] i mean, surprise, chick-fil-a believes in christianity. [laughter] i mean, this is the kind of sit chick-fil-a is not going out there. i can assure you they are not going out there, trying to start the site. look, they want to saw chicken sandwiches and that's all they want to do. and by the way, they want to take the money from those chicken sandwiches and improve the quality of life of the associates who work or chick-fil-a, which they do and they want to take that money and put it back into the community, which they do. they want to support things that are the core basic values of our company, which they do. it's a great company. in so many ways is a great contributor to communities all over this country. and yet, here what we see as the

thought police coming in, saying that you will agree with us on as or we will sanction you. if people want to protest chick-fil-a because of what a member of their executive committee said, i have no problem with that. people can do whatever they want to do. if people show up at chick-fil-a is tomorrow and buy a chicken sandwich, they can do that, too. [applause] but the idea of the government, and that's when this happened, and the idea for the government comes in is a bridge too far. i would just say this, that for mayor emanuel and the folks from philadelphia, counsel from philadelphia to say the things they said about we don't want them in our city, yet they embrace barack obama who had the very same position as dan cathy up until a month ago. the very same position.

and we love him. vote for him. not only will it not a barack obama's chicken, they won and president of the united states another position. so this is the hypocrisy that use the. and like, in some respects i'm glad the democratic party did what they did. it's certainly been a position it held. they just didn't think it was the right time for them to come forward. now they've shown their true stripes that iraq obama hansson of the american public can make the choice. >> thank you, very much. >> senator santorum and a student at oregon state and have gone up in california my whole life and i can be that -- >> you're here, god bless you. >> i can see a lot of close friends and peers will be voting for obama because that's the status quo in this liberal state. and it's disappointing because a lot of them won't take time to

learn about the opposition and watch the presidential debate over the summer. my question is, what advice would you give him orders to such ignorance? >> well, look, i think it is incumbent upon every citizen to go and it is incumbent upon them to vote based upon, as aggressive and comprehensive of review of the candidates as possible. that's how democracy works. unfortunately, that is not how elections are in this country. we have an imperfect system and a lot of folks who don't pay attention. and it's tragic. this is one of the great responsibilities you have as a citizen, particularly in a presidential election.

but this is the idea that people who would have had voting booths as vc did not any idea what the candidates positions on any of the issues is disturbing. you know, someone who votes for one candidate or the other, the fact you don't have that requisite aid information to be able to make those decisions is bad. i don't know how -- i don't know how you avoided, though. particularly given associate media. how do you not learned that these candidates do? i mean, you folks are so connected. you get so much information thrown at you. you just buy us just pass moses have to pick up something nasty wet -- because it's part of the general discussion, at least on a lot of social networking sites. so i think it's probably -- it almost has to be by choice to

ignore this or to sort of be in a cave for these types of elections. so i would just encourage them to give them -- i don't know if you're on facebook page or follow you on twitter so they can see which you say. just say hey, do me a favor, when i post something, take a look at it. just encourage them to engage. say i don't expect you to agree to me, but i would like to hear what you think and try to engage them in what is obviously an essential element of being a citizen of this country. >> thank you you >> hike on any talent from atlanta, georgia. i know in the past you've helped reform health care and i feel like one of the biggest mistakes his administration made was taking the requirement of work to receive a call for chat. how do you feel this will affect the lower middle class and the future of our society physically and socially?

>> this was the greatest, schmidt said the republican revolution in 1994 with the passage of the 96 welfare reform act, which bill clinton and against his will. he vetoed it twice before you sign it. and it did require work. why? because we know people can't sign without working. it's sort of obvious unless you are a trust fund baby, you are going to have to work to be able to provide for yourself. and as we saw with these great society programs, you know, i am sure that the people who put these great society programs that they were doing people a favor, but they are not. it is not the responsibility of the government to provide for you. it damages you. it makes you dependent. you will struggle. it is just a different kind of

struggle. i remember i got criticized once when he had a debate about universal day care and i gave an example of someone who i hired off welfare. i hired nine people off the welfare rolls when i worked in the united states senate. one of them was working for me a year, was losing subsidized daycare because she couldn't find a spot for her two kids. she was going to have to quit because she couldn't make it work. daycare is too expensive in the township township is living in. but she had a sister who is now working, was living at home and could have taken care of her children, but she didn't want to. she didn't have to. she's getting paid, getting attacked. it should be me two. she was out of work. and ultimately, thankfully the sister, the last day she decided okay i'll do it, she got her

college degree, graduate degree and she's not teaching. in a sister, by the way who is now live in a very good life according to my employee, had been raising those children turned her life around. now please universal day care, none of that would've happened. you could say we've avoided a struggle. life is a struggle. it's always a struggle, whether the government provides for you or not. there's always tough decisions we make, sacrifices we have to make. the question is, what are we learning from the struggles were engaged in? and i would make the argument that the more the argument is for us, the smaller we become in a less capable we become, the less self-confident we become. i can tell you the number of women i type to whoever the years after i worked on this bill came up inside, i didn't believe i was capable of.

you force me to get out there. and guess what? i now have confidence i can do this. people at home receiving checks struggle, maybe not to see what the next sandwich comes from her glass of milk comes from, but they struggled that they are. whether they are doing what god called them to do. we're not doing them a favor. by having them become words of our society. physically, mentally or otherwise. and sun president obama unilaterally win out and said we would repeal the working party, which is what he did, against the law, against the law, we specifically about the welfare bill i helped write to help make sure that the president could not leave that provision because we thought it was foundation.

by the way, it is turned out to be true. a study done by the brookings institute that if you do three things in america, three, you'll be guaranteed never to be in poverty. what are the three things? work, too, graduate from high school, three, get married before you have children. you do those three things in america, people who have done those three things end up in poverty 2% of the time. people who do those three things end up in the top half of income earners 75% of the time. at some point in time in their life. we know what works in america. we know what works. and by the way, if you fail to do just one of those three things got a chance to be in poverty sometime in your life, 74%. we know what works and yet the president of the united states of america assaults marriage,

sides with the teachers union to deny people the opportunity to get a quality high school education and then says, no, you don't have to work. we've now. we know what will happen. [inaudible] and what we see is the left continue to promote a value structure. it's a value structure. i love what they say we've got to get virality out of politics. well, they are.

they're getting the morality of the traditional ties to this country built on a judeo-christian and replacing it with a different reality. so the absence of morality is a different moral code and work is at the heart of it. the attack on religion is that the hire. the attack on the family is at the heart of it. they came to this country in the 1830s and talked about the greatness of america. what did he talk about? mediating institutions of our society, family, churches, trinity organizations, small businesses, people listed as a buffer between the individual and the government. that aside mid-america successful. we have these rich media institutions that surrounded the individual and gave them the ability to rise. and this leftward march that

we've seen, not just in this administration, but many, many years was to pulverize everyone of those institutions, small business, civic and treaty organizations, churches and the family. diminishes you and the public square, alone against the government and they got you. big things are at stake. you folks are going to be going to your college is adobe engaged in a battle for your survival. i know all of you are going to go back to school and you'll adobe engaged and have good times. you've got two months to have an impact. and if what happened four years ago happens again on college campuses across this country,

you're going to have a lot of explaining to do to your children and grandchildren. about what you did when america's freedom was at stake, what you are willing to sacrifice. what is a say in the end? we mutually pledge to each other. they did. they gave it all. >> good evening, senator. i think everybody in this room can agree that in order for there to the free trade in our government, we must return to her traditional values. he derive your traditional values from the bible and from the puritanical side of work at six at this country was founded on. however, in modern society we've turned to a very relativistic

nihilistic form of not truth. it can't be called truth and they can't commonality. so now that this is permeating in our society, how do you suggest that we return to those values when the majority of our society doesn't even leave in a sad truth? how can there be true change? >> be not afraid. don't be afraid to stand up and proclaim the truth. stand up and proclaim there is truth and be willing. do you folks are here because you want to engage. many times you talk to groups like the sincere preaching to the choir. and they'd be true. sometimes the choir has to go out and sing solos. [laughter]

[applause] don't doubt your voice. do not doubt your voice. you hear some of these athletes say, how do you do it? had to keep your composure when you've got all this pressure? they say, i just practice so much. this. this stuff. dig deep. you've got the young america's foundation providing new -- these are amazing speakers you have. these are folks that i learned from. learn from them. we are your staff. some of it may be dry, okay? i understand that. learn it. no better than the other folks. there is nothing better.

come on. you guys have all taken tests. you want to do that test and you know you have a tenure to work on me have it in your study and you're nervous and you feel like it's horrible, right? but when you go into that test and you've got confidence, you know it. you need to know it. you can't be a smart -- i don't know if this young lady talked about are ignorant friends who don't know what's going on. you can't be like that. you can't say i think this is the right thing to do. you're going to get some academic who doesn't know anything, but can talk about it. so you need to know the true. you need to understand. you need to drill down.

if you do, you'll have that confidence. you'll be able to speak, you know, whether it's at the bar at the dorm or whatever it is. you'll be able to just confidently communicate the truth. and you know what? the people hear the truth. don't know it. i can't tell you the responses i get from people i just go around and talk about these basic values. they hear and say yeah, that makes sense. i was telling ron earlier today, i went to some of the most liberal institutions in this country and win now. these are people protesting the outside and getting a sabbatical at peter, terkel guy. and yet you go out there calmly present the truth. i can't tell you the number of people they say i've never heard

that before. never heard the truth and you just need to go out and teach at. teacher we are, how we got here and how our country is that the precipice and they can make a difference. i was reminded her that the greatest generation of america is the greatest generation because we look back and see what they accomplished, holding off not the germany, fascist italy and say wow, they were amazing. they were no different than you. but what they did to make them great was they were willing to stand up, fight to the bitter end. their lives are fortunate in sacred honor. they're willing to sacrifice at all to maintain freedom. now is asking you to put a uniform on, pick up a gun arcaro

summer to defend us against an enemy from abroad. though thank god some do. but i am asking all of you to put on the cloak of citizenship. do your duty as a citizen of this country. know your staff and be not afraid to proclaim the truth. thank you. [applause] >> now, the soviet bear may be gone, but they're still wolves in the woods and we saw that when saddam hussein invaded kuwait. they might have become a nuclear patter cake. our energy supplies held hostage, so we did what was right and what was necessary.

we destroyed a rat free to people and lacked a tyrant and the prison of his own country. [cheers and applause] >> tonight, 10 million of our fellow americans are out of work. tens of millions more work harder for lower pay. the income president has unemployment always goes up a little before your recovery begins. but unemployment only has to go up one more person before it really recovery can begin. >> every minute of every convention since 1984. this year, watch republican and democratic national conventions live on c-span starting monday, august 27.

>> as a community organizer and journalists in new orleans, is jourdan flaherty is currently covering egypt for al jazeera. in june, flaherty spoke to the world affairs about activism and future of journalism. this is an hour. >> introducing to you tonight, jordan flaherty. mr. flaherty is a journalist and community organizer based in new orleans. if he looks familiar to you, he has appeared on much of the national international media and

cooper 360 and reverend jesse jackson. mr. flaherty was the first journalist to write for the national publication as you may remember from about four years ago. bringing back the international attention. he was also -- his post-katrina writing shared a journalism award from the american media and the aspect pass. he is produced for democracy now and other news organizations, which makes them particularly qualified to discuss tonight digital activism, resistance, resolution friend --

[inaudible] she's the author of a new book available over here after your dinner called "floodlines: community and resistance from katrina to the jena six." please join me in welcoming to the world affairs council, mr. flaherty. [applause] >> thank you, everyone. it's really an honor to be here and be aghast i want to especially thank flora and the rest of the board at the council for really making this happen. can people hear me okay? there's a double microphone going on here. there's a double microphone going on here. i think it's so important that an organization like this exist to have these dialogs in the city. we have such an incredibly lively story but sometimes we

don't get to think about issues outside the city and country. it so important to have the new site this when these issues can be discussed. café new orleans needs to learn more about dorland's. outside members in the greater new orleans area contribute to creating this culture that i think people from around the country have a lot to learn from. to everyone who has been mayor and citing through hurricane katrina on the drilling disaster and this culture alike, still good to be part of you all. i came into journalism in a different way than a lot of people. i didn't go to journalism school. easterbrook is a union organizer and a move to new orleans a few years before hurricane katrina. getting a little feedback here. a few years before hurricane

katrina. and then i was living in the neighborhood, staying in a apartment in midcity actually -- do i need to back up? is that better? thank you. sorry. and i evacuated a few days after the storm. and when i evacuated, what i saw affected me to this day, which was the way many people are treated especially african-americans through norland and very true here, campaign i tend causeway. when i got through the city and saw how the city was being treated in the media and people of new orleans for to pick it and the media, so much is really missing from now. and so, i wrote a short article

about the city i come to know in the previous few years and what a pain in those previous days as i evacuated. and that e-mail that i sent out end up getting forwarded around and referrer data recorded in all smugness translated into several languages with published publications around the world, was on websites. and i started receiving feedback from people i respected here in new orleans that this is something i could do that would be useful to the city to try and tell the stories of people fighting for rebuilding, so over these past several years, and try to find a way to learn how to do journalism in a way useful to the people of new orleans and to communities in a way that is accountable to the truth and also accountable to this community i am from. this idea of accountability is some rain and members of journalism, but often misting in journalism today. this idea of being accountable to the truth and your community.

that is something journalism needs to learn from and get in touch with. when i talk about media, people talk about the mainstream media as opposed to alternative media. i think that those boundaries are less and less important today. you know, i think that right now sort of all media is mainstream media. you can be a 14-year-old with a blog and send me can be seen by millions of people. there's incredible level of distress of what is seen as the mainstream media today. for better or worse, these boundaries are breaking down. it is actually more useful to look at this label as some people use a corporate media versus non-corporate media because it's important to keep in mind what the media is accountable to. some media is accountable to the states that find it.

you can someone say that about al jazeera and somewhat about the english-language russian channel, or the new english-language channel from china. other media is more accountable to the advertisers, ultimately at the bottom line. again, it is not to build a value judgment against it. i think what we think about media, think about who the media is accountable to, without funding comes from and what that means. there's also a listener supported media, whether that's npr to a certain extent and other independent radio station. and so, these different brand names are something that's often not talked about. people talk about how many read it, is the mainstream? is a nonmainstream? there's other barriers in now. people talk about the new

influence of bloggers, facebook, twitter, social media as an important force in world affairs today. people especially talk about the recent events in the middle east, arab spring, revolution and each had. i was fortunate enough actually last year shortly after the revolution in egypt to speak to a lot of people on the ground, including bloggers have been active in organizing and getting the world. i asked them for their thoughts on the medium of grassroots had been in that struggle and a soda for a couple minutes am not that i want to read out because i thought it was really interesting in this context. i talked to a woman named brabant à la moxie, an activist and blogger they are. you know, i asked her what she thought of the importance of social media, facebook, twitter

she said when people don't talk about is the importance of soccer hooligans. all the people that get violent at soccer matches. they said you could light a fire in three sections which is staring them prices. they said they said police informants in the crowd and i was very helpful in people organizing police informants in the crowd and i was very helpful in people organizing interior square. this created a lot of pressure on the government. i think it's important to think about forces on the ground and every person i talked to any chipset, you know, one thing that was most important was

tunisia and that often gets forgot about your disinformation at me shake it these moments in time, whether it's tunisia, each at, occupy movement assert this really important function of breaking the spell. we are living at the end of history, this idea that change cannot happen, that we are stuck with whatever system we have, whatever leader we have. and the moments where the stylus broke and in a mass movement can change things. it creates this period of history that martin luther king is responsible for the civil rights movement. it ignores the masses of people. the fact there is no one person in a jet, no one person that we know of certain key figures in both those cases, but this idea

there's a mass of people coming together. it opens up to a different of history. there is another activist and blogger named hasan abdul lally and he made the point that there were 12 million protesters that were not online. they were coming up and didn't have internet. millions of people didn't have access. he said also people would post news about a protest in the newspapers and al jazeera tv would say these people posted on facebook. so i'll be sued for online, but we seen a are getting this report in an facebook gets the credit, but in roiling this

traditional media that actually really got that word out through that our people. in general al jazeera was a force that is really important in getting the word out. somewhere in breaking a certain silence in the medium and the middle east. going back to the u.s. and our crisis in media, we are at this really key time to talk about thinking in media here with the course announcements going down to three days a week. and you know of course i think probably none of us want to live in a city that doesn't have a daily paper and you know, what that means. we also ought to look at it in this longer chain of the fans of the fact that there used to be two newspapers and this can

surely had four or five or six newspapers. and that collapses happen. also the collapse of a more independent medium, especially in new orleans and around this country are really strong african american media. you know, i think those that are fighting right now that the chair for a long time in louisiana weekly slowly started losing all their staff and influence and ability and the new orleans tribune similarly lost that. i think we need to ask why because that has been so important. there is an article a few months ago and columbia journalism review talking about and the lack of diversity around the u.s. they give a history of talking about before 1968 and would be very hard to find any people of

color reporters, steny are in the u.s. and in this article they spoke to many of the longtime reporters at these papers. many said that they could remember the riots that caused them to be hired, sort of these rights in the late 60s and early 70s in various cities in almost every city and the newspaper would say, we don't understand what this right came from, but we better hire someone from this community to report on it and in many ways they were cut plan by these changes. that really says why we need this diversity in media. it is not just because it's the right thing to do, that the media cannot report correctly if it does not have voices from that committee. and columbia journalism review of an article that many newspapers in the country

continued to have this issue of a lack of diversity on their staff. they interviewed one person who had just been in an editorial meeting at the "houston chronicle." there was one person of color in that editorial meeting. so this is a problem continuing to plague these papers. in a city like new orleans is still african-american, we need to really fight or a media that represents the whole city again not just because of the right thing to do, but because it makes for better media. and i don't want to give the impression that identity is the only thing. you know, there's many, many clear examples of people not from a community able to do great reporting from that community, but it absolutely helps to have that representation from different communities and it does make the journalism stronger and the reporting stronger.

.. >> we have been trying to do something about public housing. we gave the opportunity for this change.

you know, in both cases we are told it is an invisible hand of the market that is going to make these systems better. it was said that the first 100% premarket public education system in the country. and i think that this example gives a really good challenge to the market, that it will solve these problems are fundamental needs like health care and education and housing. here is this paper but all reports, it is the most profitable newspaper by the new health jane. it has to, you know, it is something like penetration, thank you. penetration of the news daily. it has the lowest internet access of any cities in the country. and yet, if you ask, almost anybody in the city of new orleans, if they think that we

should lose our daily paper, nobody thinks so, yet we don't have a say, ultimately and what happens in the daily paper. immediately people were saying, let us buy the paper but they don't want to sell the paper for it is the most profitable paper they won to use this paper for this experiment in this experiment is about the bottom line and not about the community newspaper. when we are talking especially about love the fundamental needs, like information, like education, like health care and housing, it cannot just be about -- we need some sort of lever to make that happen. this process has to make it happen. i want to give one other example

from a situation that i think is relevant to this diversity of media. and that is the case of the jena six. it started after a year of when hurricane katrina occurred, in the small town of jena, about 80% white, a very small parish. they have the highest percentage for a particular candidate than any parish in the state. the first day of high school they are having an assembly. a school administrator asked a student, does anyone have any further questions? one student said yes, i have a

question. can anyone sit wherever they want in the schoolyard? >> and he was referring to the schoolyard of the jena high school, not by rule but by sedition had been divided by race. white students sitting in one area and black students sitting in another person white students generally sat under this tree. in the school in minister said yes, anyone can sit where they want. the next day, there were nooses hanging from under the tree. the black students took this as a message from some white students, that they were not welcome to sit wherever they want or under that tree. then they acted in the old way of civil disobedience. they went as a group and gathered under that tree and there was commotion in the school, and the district attorney of the parish, the law officers were called in. the schoolyard was mostly divided by race.

he said you need to stop making trouble, i can make your lives disappear with the stroke of my pen. what followed was several months of racial tension in the school and in the town overall. and this feeling that black students were punished for things that white students were not punished for. there is an incident where some students were threatened with a shotgun and were charged with theft, while the owner of the gun faced no charges. a few days after that shocking incident, there was a fight in jena high school. a white student was badly beaten, and in fact, required medical attention. he was out at a ceremony later that night. he was brought to the hospital and he had serious injuries. six black students were charged with being part of that fight. there were six of the leaders in

the protest. and they were charged with attempted murder for that school fight. they face life in prison. again, there is a feeling that this was a fight between these students, this would not be charged. now, the parents of the students didn't know anything about media or organizing, but they knew they wanted that they wanted to stand up. and so they started having these protests in the town. at first it was just them and their friends and neighbors, beginning in late 2006 and early 2007, and they were coming out every week. they have never before held a press conference that they started holding press conferences and sending out notices to the media. sending letters to state legislators, senator mary landrieu, whoever they can think

of. at first it was just one local newspaper that was covering it. the alexandria paper. and then people from surrounding community communities, community television stations from lafayette, started coming up and covering the valleys and word started getting out and i actually heard from some people from new orleans who had heard about it. the juvenile justice project of louisiana had been involved because of the prison there. one of the lawyers sent out an e-mail to various people from legal and social justice communities in new orleans. more and more people. i went to the first one in may of 2007. they had been going for around six months with almost no attention outside of that town. but every week or every couple

of weeks, continuing to come out and protest. i wrote the first article about that, it was for a national audience called the independents in new york and in san francisco and a couple of other publications and also on the web. soon after, there was a bbc report, a "chicago tribune" report, associated press, reuters, it was bubbling beneath the surface. all were e-mailing the articles, people started posting it on my space, others have social networking sites. people had never been to jena and they were making youtube videos about it. it was really due to the grassroots. some of the most regular media coverage was from black radio stations around the south that were having the members call in and talk about the story. it was percolating like this for a while. in late june, i did a story on

it for democracy now. that was a radio and tv show that circulated around the u.s. that again is not seen as mainstream media. but the ship that happened after that report was remarkable. the families, for more than six months had illegal defense fund set up, a bank account, but there was virtually no money in it. within five days after that democracy now reports, there was about $40,000 in that account from viewers and listeners around the country. this nonmainstream media had really broke in and broken the story in a new way. the black independent owned newspaper did a story soon afterwards.

two syndicated black radio shows, the steve harvey show and another show that was not generally known for their content politically, started talking about this regularly. all of this combined ramp the story up to a new level. again, the mainstream, they were taking more of a look. it started becoming a big story. in late july, the family members call for another rally and 300 people came out that was the huge number at that time that anyone had heard of. a friend of mine who works for the newspaper said that we were out there and we started marching and jena was so small, we were marching and said no justice no peace, and then we marched the whole town and were gone. [laughter] it felt like a very large group. and the message was being sent to us.

color of change did a petition. it was delivered on that day in july. then we looked at another protest on september 20, 2007. michael basin and steve harvey seem to be talking about this at all points. people and communities around the country were organizing. jesse mohammed, who i mentioned before, part of a national conference call from student government associations, especially in schools throughout the south and historic black colleges and universities and they were organizing on how to come out. many students who had never before been to a protest were actually not only planning to go, but were organizing entire buses from their community or their school to go. on that day, september 20, it is estimated about 40,000 people came and marched in that town.

soon after the charges against the youth were dropped, and those 69 men are now in college today instead of in jail. that absolutely happened because of this national grassroots media that kept the story alive and these family members, they fought against this wall of official silence for months to make the story come out and fight the story to come out. it does remind me of what happened later with egypt or it these people have been protesting in numbers of five or 10 or 20 people, and immediately arrested. nobody knew of the protest movement really in egypt at that point. the muslim brotherhood at most. suddenly, millions of people were out and it happened instantly at this moment was broken. because people did not believe

that we are at the end of history or that change is not possible and were not waiting for one single figure but realizing that many people had come together. when i talk to families from jena, they are so glad that the children are free and in college, but more than that they want people around the country learned this lesson and to learn this lesson of building this struggle that many people of different talents and skills can get involved in. making youtube videos, organizing buses, some are on conference calls, some are lawyers, some are lobbyists. but all of them, under this vision of this change, in this case, the case of egypt or whatever, creating a revolution in changing the government, that many different people can come into this movement and it continues to struggle, it even

after weeks and months and years of no one paying attention of it seemingly impossible with the knowledge that it could one day be not impossible and change can come. moving forward, i think that we need to look at some of these heroes in the media that are not generally recognized. one person that has been a hero of mine is either the wells. a lot of people in this room have heard of her. i don't wells. her voice is sort of missing in journalism. ida b. wells. she made it her mission to uncover the story of lynchings in the south and to spread the word around the country about the lynchings were the young black men in the south. she was also, and a lot of people don't notice, in 1875, she was on a segregated railcar,

and refused to get up. rosa parks considered the more acts of disobedience. she was an activist and a journalist. this line of journalism, you can do both, i think journalism needs to be accountable to the truth. but i think we actually need to be honest about who the journalists are as individuals and we should not hide if they have an activist past or if they have police, but we should be honest about the people and transparency in journalism. so i just want to close with a quote from ida b. wells which sums up the passion that she had as an activist and journalist. sorry i do not have it

memorized. it is better to live anti-injustice than to die like a dog in the street. there is no educator to compare with the press. it is up to all of us as a community to shape that and to fight for a media that represents us and can make change possible and can give alive this idea the end of history and the change is not impossible. [applause] >> and now we have some time. i don't know if you need me to moderate with you, but if you have any questions, we can ask jordan in the next few minutes.

>> [inaudible question] >> you know, it's an interesting question. i think it -- by the way, did everyone hear that? she was saying -- in london, i believe it is the evening paper, it is free and so to advertise, it's paid for and it reaches a wider audience because it's free. >> [inaudible question] >> it is all over. the question is can new orleans do something like that.

>> that's the thing. it is profitable. >> [inaudible question] >> well, we are to have a lot of free papers here in new orleans, all of our weekly papers are free. actually, louisiana was -- [inaudible question] >> these papers. >> but these papers are not limited editions that have some amount of newsletter for you. i think that they have all tried some levels of giving out a certain amount of free papers. >> i think all these things are possible. money is not a problem. the problem is, i think, two different versions over the

future of newspapers. i think that these owners have decided that the future of the newspapers is not in print. they have made that decision. and they have believed that they could make more profit with this new model. people talk about how sometimes these venture capitalist firms or other owners will buy a factory or whatever and will sell it out piece by piece to make profit and then dump it at the end. there was an article the other day, i forget who wrote it, but they said that in some ways new house is selling goodwill but the commune has, by dropping it down to these limited things. they are sort of squeezing this money out in a shortsighted way, but maybe in the short term, they will make more money and then in the long long-term, they won't have to pay for it but whatever -- they will sell it off and do it. it is the short-term vision,

partly because they have no stakes in new orleans. they are looking at this and saying, that's why i think again we need to look at how we can just be about the market. we need to find other ways to support the media. not just with newspapers. but we are in a crisis of media in general in this country. and it's not just about media not making money but media not doing the hard work of investigating. media could all the powerful accountable. and we lack a vision in media and need to find a way to find a good and advertising will not necessarily fond of media these challenges. all of us need to think about how we can solve that question. there is no easy answer. >> the new nola.com will not, in

its current model, ever touch this. >> as she said, nola.com will not touch what they're trying to deliver. and i agree, nola.com reminds me of a 14-year-old my space page. >> [inaudible question] >> so her comment and i want to get other people involved, but the comment is rather but not a question. we believe more what we read in the newspaper than what we read online. it is a fair point. >> interested in your thoughts on how government tries to control the digital media there

has been basically more activity by governments to control what gets out that country when there are problems. the question was what i think about governments trying to crack down on social online media. i'm assuming you mean, for example, in egypt when the government actually tried to shut down internet. you know, i think -- china, for example, has been pretty successful at silencing online stuff. in egypt, it really backfired and made people more angry. you know, so i think it is not a surefire tactic for them to try. again, it can work for days or weeks, it can work for months or years. but the change can still come and that no matter what means, the government crackdown. the will to be free for people will overcome it.

>> yes? >> although i like having a newspaper in general, if we feel like the news is one-sided, acrylic i would almost rather have no newspaper than just one study on one side of the story. i mean, i think that it might help change, you know, what people see. you think it could be good as a chance for the inclusion. >> the question is, she does like the media in general -- that it didn't represent legit. she wonders at the times falls, maybe something will rise up in its place. is that a fair summary? >> or the people will have to go through multiple places to get what they need.

>> okay, so maybe people go to multiple places instead of that one place and that will broaden what they do. it is possible, but i am very skeptical. i think that we need the times to be better. i think losing the times is not the answer. you know, i think that even if we are we should fight for this for the two daily papers, fight for there to be changes in the system. you know, going to an annual gathering called the allied media gala, a gathering of people with various kinds of progressive media around the country. and lester i was speaking to a couple of people who were in mainstream media. and they were talking about those bad show that they had both women who worked in the media and they were talking

about a very male workplace and they were dealing with. you know, one of the people i was talking about, she would sneak out of the office to the back or cry because of this environment she's facing. we are talking about how regularly after work, she would have several drinks because of what she was facing. i think that people that are within this media that are trying to do good work are facing a really oftentimes dysfunctional environment. what i would call is a dual power movement outside the government to call for change within the government. the same is true for media. we need to build up our alternatives and fight for a strong robust alternative for corporate media. at the same time, we need to support, especially those voices within the mainstream media, those who are trying to do good

work. a lot of brilliant reporters that are at "times picayune" and any other paper that you can talk about. we need to support those people to let them stay in the network. in new orleans, people are getting their news from those websites. we can't say that we are going to ignore it and claps. >> getting back to egypt, can you tell us more about the independent media association that you encountered while working with egyptians and, you know, activists? >> the question was about media sources i encountered an egyptian activists. i don't want to present myself

as an expert on egypt. i've spent a certain amount of time after the revolution. but i don't read arabic, so that is cutting me out of a lot of it. there were a lot of independent bloggers and people who were doing organizing on facebook and i think, you know, some of the facebook organizing, they did it in a way that was really smart about bringing people into the process. they would not just say that there is a demonstration on this day, but they would say that this is a demonstration and we should all wear one color. what should we all wear. bringing people into the discussion and giving him some ownership over -- people felt this is my movement, too. i help decide what color were awkward to wear or whatever. people using media in a way that was interactive that really brought people in. and i think that that was helpful. >> i think that digital access is actually a very risky proposition for two reasons. one is i would like to know

where we get the funding and the money to really fuel that machine. and second, the ability to communicate, just like with any government, and we are born to shut that down any chance that we can. whether it's wiki leaks or things on the internet are things that you do. if we are going to have a free [inaudible] system, we have to find the money and we have to regulate those who make the laws. you can't. you need to find a way to make the internet impossible to shut down. how do you make it impossible to not censor the internet. we can't do that, if we can't do that, then this is actually not were not happen at all. >> okay, summing all that up, you are saying that this idea of what you call digital action is

specifically digital online media, it is not a solution. that it is a risky path to take for any number of reasons, being, you know, how do we know it is reliable, how is the system of accountability and how are we going to fund it, how will we be sure that the government does not shut us down. is that an accurate assumption? >> i think that all of that is very true. again, i think that as a wider community, we need to find an interest because i do think that the media is, it should be this basic kind of, you know, part of government. it could -- it should be something that we have. and i think whether we are talking about the so-called mainstream media or the digital online media, we need to talk about how it will be funded. so much of what is the online media is not journalism. it is not investigating.

it is comments on other people's investigation. that commentary can be interesting. but you need somebody who is doing the actual investigation and that is actually looking into that. that cannot be done for free. commentary is really easy to do for free. journalism is really not. and so we need to find a way to fund that. whether that is happening online or in print, it is not always something that advertisers are going to want to fund. we, as a people, need to find a solution. and the path forward. it is not an easy answer, but it will not come strictly from the market if that answers your question. >> [inaudible question] i think maybe it is a generational thing and i understand that it is embarrassing -- [inaudible] >> maybe we are also a little

bit ahead of the curve. i think most people in their 20s don't really read the newspaper. i never read the newspaper, maybe i am at a point where my phone customer service. isn't it possible that religious moving away from it and that is really okay? i think that all my sources are very legitimate. when i go online, do the same thing and i would be more likely to believe it on 20 sources been on one. is it possible that we are moving away from that? >> that's a very good question. for the folks who didn't hear, she was asking is this a generational thing. herself and people she knows and their 20s are not really concerned about reading the daily paper and maybe none of us should be concerned about it. maybe we don't need that because other sources can fill that need. you know, i think it is a fair point. it is interesting at the rally

with "times picayune", there were several hundred people there and really only a handful were under 50 years old. only a handful were not white. i think that that does beg some real legitimate questions. you know, i think it goes back again, what will take its place? i don't think that nola.com can take the place of "times picayune." i don't think it prioritizes importance. the multiple part series on incarceration around the state, and i think people that saw the paper, they saw that a type reference, but you could barely find on the website. it is possible that we are moving into an era beyond print.

you know, i am amazed that we still have really great radio, you know? people are still doing radio. whatever it is, we need to find a way that we are going to support good media and sport powerful media. i do believe that we should have a daily paper. but i hear what you're saying, and i definitely think it is not the only answer. if we do have a daily paper, we need one that will do a better job for all these things. and we do need to build up these alternatives, absolutely. >> wait for the microphone to get to you. >> i just want to comment on what you said. when i got out of college many years ago,. >> i have to move up here you. >> i lived in boston for two years. never read the boston globe once. i could care less about it.

there was no internet. there was no npr i didn't care about the news. and i'm a college graduate, okay? i moved to new york, occasionally i will read the sunday times. but i never subscribed. there was still no npr i didn't care about the news then. i really didn't. there were two good papers. after two years in new york, niners in seattle -- i started subscribing to the paper. i came to new orleans not have and i have been subscribing ever since i came here. what changed? i got older. okay? young people, college kids, they don't care about the paper. [inaudible conversations]

>> i think that we should not get into a back-and-forth discussion. maybe you guys should move to another table. >> the journal said how many of you read the "times picayune" and none of them said that they did. it surprised me because you're not reading the newspaper when you're studying in college. unless you want to know what is going on. but the thing that changed is that now i am a news junkie. i listen to npr,, you know, i watch news on tv and i read the paper. >> thank you for that. i'm just wondering if anything is different in college and

journalism schools -- is there a different emphasis, i wonder if you can make a living and journalism in the way that maybe when i thought about going into it about 30 years ago you thought about and whether that, for reasons that have been branded back-and-forth, kids still want to journalism school, and if they do, is it any different? you know, i would think it would have to be changes in how it's taught and what is taught and i was thinking it would be hard for someone like you do make a living. >> the question was are there changes happening in the journalism school with this changing environment. and he would think it would be hard for me to make a living, which is pretty true. >> you know, i don't know the ins and outs of what is happening in journalism school. you know, when i talk to young journalists, they are very

scared about whether they are going to get a job and when i talk to journalists that are recent graduates, yeah, i think they're all thinking in the back of their mind what profession would have to segue into. especially those working in print. those in tv maybe feel a little more secure, but those really doing the hard work of journalism. it is in crisis. and i have done a lot of my work and over the last decade or so, al jazeera has been expanding and we have a lot of critiques about this as well. it is not really advertising independent. we need to think about what media will look like in the new

era. and every time the media has its problems and conflicts are, or where the funding comes from -- you know, we also question how well can we do their job and how much can they do their job. it is somewhat of a crisis. i believe that you had a hand up right here. before you do, let them i can get you. >> "the new york times" has the perfect model for incorporating this into your website. i personally don't agree that young people don't value a newspaper. actually, they do. it is the message of delivery, it is going to radically change as we go forward with a new the new generation and we have to accept that to some degree. what is pen on paper has become an outmoded method of delivering the news. it is a new reality and one that we are going to have to accept to a certain degree. >> thank you.

>> i think that where is the money going to come from to pay journalists to do some reporting and not just individual -- [inaudible] [talking over each other] >> i did better reporting now than i ever did with print and print media. i believe any newspaper in the country any day, and i do believe that there will be a demand and a message to deliver it. >> i don't want to risk it too much back-and-forth, but it does show us that after the q&a, i think we will all be able to have a robust discussion. because this is something that we all have very passionate opinions on in a lot of different arguments on. i will just say one other thing to that.

the issue of what will fund journalism and how we perceive it, speaking for myself, i am someone who likes to consume all kinds of media. i used to buy a lot of cds, i don't really any more. used by magazines and under really do that. i think i pay less for teenage movies, and i think that we have all kind of become accustomed to this idea that the media is free. and i think that the corporations that deliver the media will always find a way to make profits off of the media. they will always find -- they will always have a part of the recording industry in crisis or the movie industry in crisis -- but they will always find a way to make profits. the people doing independent worker, and especially independent journalism, all kinds of independent media and arts, arts that makes the powerful uncomfortable, that is

what will not necessarily be funded. i do encourage us to think about and encourage myself because i'm guilty of it, changing how we think about media. some media is worth paying for and we need to find a way to pay for it, especially that media that challenges the powerful. that media that is not immediately practical. >> i see another hand of. >> [inaudible question] >> all right, do we have anyone else? >> more an observation than a question. something that is happening today, right now -- what we read and newspaper, we cannot ignore that aspect. >> i want to know what's going to happen. not two or three days ago. we have to keep that perspective in mind also. >> thank you, thank you. i think maybe this will be the last comment or question.

>> [inaudible question] >> the defense movement, what is the ability to mobilize the people. >> [inaudible] >> facebook and twitter and so on. that is why we need to look who the sources and the media. [inaudible] >> thank you. again, i just want to celebrate

this organization that brings together these gatherings in these kinds of discussions. they are so important and really i am honored and pleased to be part of it tonight. thank you all for inviting me and thank you all for the help. [applause] >> new jersey governor chris christie will be the keynote speaker at the republican national convention later this month in tampa, florida. it is a campaign that is announced that mitt romney will be introduced at the convention by florida senator marco rubio. turning to c-span and the live gavel to gavel coverage for the republican national convention august 27 through the 30th. >> in a few moments, a discussion on taxes and income

inequality. in an hour and a half, former republican presidential candidate rick santorum speaks to the young america's foundation at their annual student conference. and then we will re-air the discussion on digital activism and the future of journalism. >> you're watching c-span do with politics and public affairs, weekdays featuring live coverage of the u.s. senate. on weeknights, watch key public policy events and every weekend, the latest nonfiction authors and books on booktv. you can see past programs and get our schedules at her website and you can join in the conversation on social media sites. >> the cato institute discussion on taxes, income inequality, and the role of government in the economy. this is an hour and a half.

[inaudible conversations] ladies and gentlemen, my name is dan mitchell and i'm here as a senior fellow at the cato institute. it is my privilege to moderate today's panel and i want to start by welcoming everyone to our auditorium here at the cato institute. i want to welcome our friends here today and those watching on c-span. today we will talk about inequality, which is behind almost every controversial economic issue that we have today. it is fundamentally, i think, in my way of looking at it, an issue of whether or not it gets bigger over time, the tide gets bigger, we can all get better outcome if it doesn't get bigger over time, then one person

becomes wealthy it must mean other people must become poor. on the tax policy, you don't want to hear from me, what i'm going to do is introduce all three speakers in order that they are going to speak and then they will come up and give their presentation, hopefully 15 minutes or less each, which will leave us time for q&a afterwards. we are going to start with brian domitrovic, who is a chairman of the history department at sam houston state university. he wrote a great book about the rivals who resort american prosperity because i was on my coming of age and interest in public policy books. he got his education from harvard and columbia. we will then be hearing from alan reynolds, who is a senior fellow at the cato institute. he was formerly the director of research at the hudson institute and national commission on tax reform and economic growth, and most important for today's

topic, he was the author of income and wealth from greenwood press in 2006. and then batting cleanup, scott winship at the brookings institution. before that he was a research manager at the economic mobility manager. and a senior policy adviser for the ways and means and he was educated at harvard and northwestern. without further ado, i'm going to turn the program over to brian. >> thank you so much, dan. it is good to see you again and it's great to be here at this institution, the cato institute, which in my mind just becomes more and more content more relevant with every passing year. for years into the failed

recovery from the great recession, we now know what the 2012 election is going to be about. incredibly, it is not going to be about -- it is going to be about economic status. that's right, not about recovery or growth or solving a problem, which is the 800-pound gorilla in the room. namely come to puny state of ex- government gdp expansion, not to mention jobs, this nation has been suffering with since the apprentice run down quarters during the class of 2008 and 2009. forget about all that. even if they are as great as they are in three generations. the question at hand as the two parties prepared to nominate their parties, is whether the rich are getting more than their fair share and circumstances. until republicans truly change the terms of this debate towards the clear alternative economic growth, we are heading for a referendum on inequality in november. how can it possibly come to

that? it does represent one of the great episodes of changing the subject in recent political history. instead, we come here today to talk about the research, the academic research that lies at the bottom of the consensus on inequality at the center of the president's worldview and that the democrats expect the electorate to be given. the opening passages of presidents of obama's first budget of 2009. the research was so far out of the ivory tower that he gave the slogan the occupy wall street notebook. we are the 99%. i speak, of course, the icon of modern research on income inequality that was put out in 2003 by the french economist thomas mcentee and his counterpart from berkeley. an article in the quarterly

journal, here it is. on the release of that research, we soon met a formidable challenge in the form of alan reynolds, a counter counter who gets what in the contemporary american economy. they start a little bit, back then in the years before the great recession in the wake of income and wealth. who knew then that the paper would soon take on a huge new face after the recession had. security budget of the most significant protest since the 1960s in the form of occupy wall street. because the research has taken are politics and social life, it goes beyond reason. it took it upon myself to add and emphasize some of the

essential corrections in the paper just issues with supplied economics. the paper that i wrote last month is thick with historical narratives about how inequalities have always been well understood in american clinical economy. actually better, even in the days of andrew mellon. the country was pretty good, long before income taxes will drown in 1913, making sure that the baby was not thrown out with the bath bottle. inequality would be kept at bay as growth was maximized. the results weren't too shabby. to the foundation of the income tax in 1913, we have 100 fold increase in gross domestic roddick, coupled with the invention of the middle class. please consult my paper for these historical contemplations.

making large evidence in a generalization about the social norms of their perception over the course of the 20th century. rather than being the historian today, i want to } one terribly fatal muscle of electrical this that has never been addressed. they use pre-income -- pretax income. here it is in 2003. income according to her definition is computed before individual income taxes and individual payroll taxes, but after employers payroll taxes and corporate taxes. let's forget about the latter part of that definition having

to do with corporate income. john cochrane reference the sausage factory has explained well enough while in computing corporate individuals is one tricky endeavor. anyway, corporate income tax rates really haven't changed all that much over the last decade. to take online in this definition says. income according to our definition is computed before individual income taxes. now, the big discovery in this research was that over the course of the 20th century, income inequality in the united states has followed an up-and-down pattern. in the teens and in the 1920s, income inequality was high. a green down by the 1940s, stayed in the 50s and 60s and 70s and shot back up. the killer correlation but they were able to identify what was that the marginal rate of income

tax, inversely with inequality was there this whole time. when the marginal rate was low, inequality was high. when the marginal rate of income tax was high, between 70% and 94%, in the 40s and 50s and 60s and 1970s, inequality was low. when the marginal rate was low again, 50% less than the 1980s and beyond, it went back up. intuitive conclusions one draws from this sequence. it could not be clearer. the income of the rich goes down and low taxation goes disproportionately up. somehow it has gotten lost in the shuffle that none of these differences have anything to do with rich individuals paying taxes. it seems that what they are telling us is that when taxes are high, inequality is low.

it seems that when taxes are low, the government refrains from winning its hands on the rich is income and the rich make out like bandits. but none of this whatsoever has taken place. even that definition of income that they are using. his pretax income. it wasn't because the government was taking it. it is because her income was not reported to begin with. when the rich is income soared in the 1920s and the 1980s and beyond as tax rates were lower, this represented an enormous enormous presentation on the part of individuals. it became available for taxation. you can see the deadly problem with the benefit. it is fatally compromised.

after all, if they arrange for it to come in high, they will get tax rates lower than 70%. and vice versa, during a treatment of low taxes. then the rich will not bother so much to prevent this income from being represented for taxable income because it's not tax so much anymore. it makes the income far less than their real income. it makes the -- therefore, taxable income as opposed to real income over the decade, they told you nothing. now, you may say, is a very nice device in economics and tells us how much the rich are hiding their income from the irs? well, there is, of course, something called elasticity of taxable income or eti.

studies tried to determine the rate at which the rich take their income in non-taxable fashions. it is several decades old and fairly durable. the consensus has been for years to develop for every 10% increase in the marginal rate of income tax, the rich text their income by 10% or more. the other study is the way the rich are able to absorb real income in the form of tax benefits and capital gains, loan and loss, right down to the prophets and as a way to manipulate their taxable income. obviously the values are taking real over taxable income goes down with the marginal rate of income tax. if the marginal rate of income tax was down by 56 points as it did from 1944 until 1988, you could be talking about the ratio of real income and taxable income on the part of the rich, going down by something like two

thirds. piketty-saez in the 1950s were doing taxable research. then they inexplicably dropped it at the end of 2000 as they concentrated on the taxable income and inequality. the obvious question is, why not marry the two? if we have decent mythological means for ironing out the kinks in it possible income means, why not go ahead and apply them? i did in my paper, using consensus from eti and it required some serious econometrics. the basic patterns that emerge are theirs. the real income of the rich and in particular that of the top 1% in the inequality research, has been flat throughout the 20th century. that is right, flat. not up and down but flat. it actually would not be so hard for him to apply the eti, but

he's chosen to do something else. he hasn't said -- and the paper earlier this year, going back to the 1980s had a propensity to overstate that eti by big orders of magnitude of sevenfold. tellingly, it included in the paper by saying that we really do need more time to sort out the eti effects. he said that he is trying to build a database from the basis of not reject proposed tax and it will be huge enterprise. in other words, it would be hard. just like it is hard to measure eti. ..

only if every worst a look at a pretax series have any provisional validity. no matter what piketty says, they thought they arusha that the impact, social on the staff is responsible for the bragging transfer of the golden era of the middle part of the 20th century. the thing about science in general is that you have the

data, you should go ahead and use it. but at the same time you should be extra sensitive to the shortcomings of any conclusions based on the acknowledged limitations of the data. you should book of many improvements in when they come be willing to toss the original evidence to begin with. if the scientific method one-to-one. here's so we need to do a society informed commentators. this is realized that as economists as it is practiced in advance for debate is absolutely no license to accept the claims piketty-saez of inequality. only a judge piketty-saez over the 20th century as closely exaggerating the highs and grossly exaggerating the lows. this simplistic economic research is now moving politics to the segment of our youth and wall street. this is becoming far more than just an intellectual curiosity. thanks.

[applause] >> now we'll hear from my shy, retiring bashful and humble colleague, alan reynolds. >> only if i can get through this thing out. the title -- by the way, you should read the history, i naturally going to focus on the numbers because that's what i do. this use. they make it an example of misuse of these numbers. i'm not going to misuse them. amnesty is to be joe stiglitz never come at never come at a price of inequality. chapter one is america's 1% problem. he doesn't present much data it can assert it talks about the data and then he concludes, cocoa and simple story of america is based. the rich are getting richer, poor become poorer and more

numerous than income in the middle class are stagnating or falling. why is that a misuse of the data? the numbers only cover the top 10%. they are as the authors admit, silent on any other part of the income distribution. the congressional budget office has a better job of including everybody and what they found was the average incomes of the top 1% of pay 37% from 2007 until 2009. this increases go, that is pretty rough. they also found that real median income, stagnating or falling as stiglitz refers to, verse 48.8% from 1880 until 2009 including 13.9% between a high of 2000 in the peak of 2007. as for the poverty rate, we'll get back to that in just a minute. the second major errors in the use of these numbers all relate

to you for getting the point that brian made, these are pretax numbers. they are also pretense for numbers. they don't include any transfer numbers, social security, earned income tax credit, food stamps, unemployment in the face, et cetera, et cetera. if social security isn't income, i have beef with the irs because they keep trying to tax mine. but they leave it out and they leave out benefits. they only talk about tax compensation, not health insurance paid by employers. pretty serious mistake. in spite of the fact this is pre-transfer, pretax income, people use these numbers. stick with states, piketty and saez themselves do. as numbers for increasing transfer payments to the other 99%. that is just ridiculous. it would make any difference.

the numbers exclude transfers and tax so that if you are somehow able to increase tax on the rich, it wouldn't show up in the numbers. they don't have that. if you are able to double transfer payments or triple them, that wouldn't show up either. and yet these numbers are used that way all the time. this graph shows that problem number one with the data set as it is not a credible measure of income. what i show here is the total income -- a member of the top 1% is a great shield 1% and cut into everybody else's income. if you're not counting everybody else's income, then that ratio is increasingly false. what i'm showing here is what they call total income as a percent of personal income. icc, they are missing a large and growing share of personal income. why? health benefits become more important in transfer payments

are getting bigger and bigger and they are leaving this out. so this factor alone makes the top 1% rise in quite evolutionary manner simply because the denominator of total income is shrinking and increasingly understated. they also instantly as a measure of personal income, 80% for prewar data and use it for european data. here they just use whatever is reported minus transfer payments, et cetera. that measure. the second big problem is that it's not a credible measure of inequality. this gets back to the property that someone was talking about. what this graph shows is the top 1% share price is, notably in the 90s. the poverty rate goes down. when the top 1% of common notably in the last few years, the poverty rate goes up. so we've all learned to say when

the rich get richer, the poor get poorer. according to this data comes in that's absolutely backwards. if you're going to use this as the top 1% as a measure of inequality can be put in the paradoxical position of saying that. much the poverty rate goes up is a good thing because it's a reduction of inequality. recessions are a good thing. they always produce inequality by that measure. every recession but one since 1913, top 1% has fallen, so these folks i be hearing. the 99% should be cheering because in the two years between 2000 to 2009, their share of income rose by five percentage points. wow, this is a bigger share of the shrinking pie. welcome to it. it's not much fun, but that's the number they use. there are better measures that encourage everybody. the gini coefficient. the gini coefficient one is perfect inequality, so they're

usually in between, like .4. the cbo's gini coefficient can't even though it includes the same numbers for top 1% income was unchanged between 2008 -- between 1888 and 2009. in other words, for 20 years it's gone up a noun, but ended up the same. some academics, rick or cause there, larimore and simon put out a paper in 2010 from where they took a gini coefficient from census data and made a couple of adjustments. included cash transfers, not food stamps, but cash transfers included the insurance benefit that includes medicare, medicaid, but also health insurance. but these just a cyclical peak. so the cyclical peak of 1989, that gini was .372 in the peak

of 2000 was lower, .364 in the peak of 2007 was lower still, .362. so that's a fairly broad measure of inequality and it is cyclically adjusted and not racing for what it's worth. the last thing i want to talk about is the behavioral response, changes in tax rates. i will do this in the simplest way i know how, which is to say that the real dollars for top 1% receive. after rights be simply enough. they do it as percentage. i do real dollars. and the blue line a salary, bonuses and stock options all income and labor. mostly business income is taxed at the individual level, unincorporated business, s. corporation, partnership and the

deadline as capital gains, of course the thing that drives that most of the time, particularly in the cbo numbers. what is movie amazing with? people rushing to sell assets, businesses, stacks before the tax rate goes up in the following years. it's part of the tax reform. its bikes they have been in stays very, very low. but the capital gains rate was high, 28%, that part of the top 1% income was low, understating making it look like there wasn't much and in 1997 we cut the capital gains tax rate back down to 20% again and capital gains spikes rather dramatically with the help of the internet and the technological revolution going on at that time. piketty and saez see the top trend has been labor. not a bad thing to say when the attack about that. until 2000. that is the blue line hit the

big spike after the 86 tax reform plays havoc with all of these numbers and that is exactly what you expect from easy avenue cut the top tax rate from 50% to 20% almost in half. detailed literature tells you should expect the amount of income reported to practically double limited practically double and a couple of years. another kind of levels often goes up again. the green, the other spikes at the time of the 86 tax reform, simply shifting from corporate to noncorporate forms. the corporate tax was higher than the individual taxi, which dropped to 20%. it made sense to convert to partnerships or subchapter s. or llc and also made sense for new corporations to be created in that form. see guinea pigs by eight, but it's totally moving money from a corporate form to individual

form is just a different way of reporting and yet, brawl, bogus. increase from 97 tonight 2000 is largely german by the capital gains bite from a mixture of lower tax rates and technology boom. but there's also something going on and that his stock options. by the end of 2001, the survey of consumer finance reports the stock options were 11% of americans had stock options. i miss that goes somehow or another. the proliferation of nonqualified stock options, which when realized after three or four year waiting period were taxed as ordinary income coming davis-bacon ordinary income. since then there has been no gain, and even at the peak of 2007. you get another spike in capital gains and in the 2003 capital gains to 15%.

what does eti tell us? we should expect a big spike. as per the business income come but the big thing is a tripling in real terms of dividend income of the top 1%. i never held dividend paying stocks when the taxes 40%% 15%, but i'm saying dividends that are eager to me and apparently a lot of people agree with me. you've big increase in the amount of income. by the way, it's arguable that the reason. it's not enough to probably have to the lower rate. and then of course we have to recession, which is the grand nastiness of it all. so this is just a simple y but driving ati. -- eti. this is a quote from piketty and saez, implements whose son -- i

forget her name, stephanie i think. a clear negative correlation between top 1% and the marginal tax rate in this graph from another publication involved in, i couldn't get the axes, but i stole it as best i can, but basically you can see for yourself in the top marginal rate was high, which was basically from the 1932 on, top 1% are smart enough not to refurbish income, comes down the 80s in the top 1% rise is. and what saez says in the top tax rate, this translates into an elasticity of top incomes with respect to the net of tax rate of around one. this statement can be turned around. it is reversible if elasticity is about one, that means we can

explain all of the rise in the top 1% share as a behavioral response to lower tax rates, which is exactly what i think is true and that doesn't even include taxability and peer the response of capital gains is obviously important in the charred edges showed you. tony atkinson and andrew lee studied five anglo-saxon countries from 1997 until 2000. toni atkins is a co-author. and what they found and lee soundlessly estimate that reductions in tax rate explained between one third and one half of the rise in the income of the richest percentile grew. now even if it was only half -- i'm saying is more than that, this makes these numbers really not appropriate for the use and which they are being put. it certainly doesn't make them appropriate as an excuse for

raising tax rates are increasing transfer payments because tax rates in transfer payments are counted in the data. that's all i have to say. thanks. [applause] >> scott, over to you. >> if any speakers of cell phones on by the way, turn them off because it causes a little impact. >> i am a senior and therefore i am entitled to a portion of his income. [laughter] let me thank the cato institute for inviting me to be on the panel today.

i am pretty excited. really i don't get to be the lefty on the panel. i actually considered to be myself on a about half a dozen libertarians running wild in the world today. i appreciate other cato does emphasizing the importance of market for benefiting greatly from within the last 24 hours i should say from grappling with ellensburg specifically and am really glad to have the chance to respond to brains provocative paper. so let me start out. i want to disagree -- i want to agree rather that the question of brent race is about taxes and the quality and living standards generally. and the question he raises about the research of piketty and saez are important ones. to appoint a sympathize with his answers. at some point, high marginal tax rates almost surely do hurt

growth by reducing investments in work among those who make the most money. diminishment inequality resulting from higher taxes can translate into harm done to the middle class and to the poor at the very least it can be benign. so i have argued elsewhere that the fact that inequality dropped from 2007 to 2009 presumably did not help anybody in the middle class or at the bottom and therefore the idea that it necessarily rising inequality before them harmed the middle class, you have to really seriously consider the idea that it's just not true. finally, the post-1980 increase by piketty and saez may be exaggerated. i spent a lot of time over the last years analyzing data from a skeptical perspective. all that said, i want to argue that the case for each of the empirical claims is far too late

to make them convincing. so consider first whether high tax rates hurt economic growth. brian's discussion of the growth of federal income taxes and income tax is informative. reminds us just how much the new deal and world war ii changed the federal income tax. as he describes from 1913 to 1931, income tax rates were low at the top rate no higher than 25% except for eight years during and after world war i. starting 1832 however, the top rate was above 50%. just as important from 1940 to 1943, personal exemptions for the rich the point where first time most americans were affected at the federal income tax. rate hikes driven by the new deal. the exemption cuts were driven by the physical demands of world war ii. contrary to the experience after world war i, after world war ii ended, top rates remained high.

they remained above 50% perhaps a century after the 1932 hayek and personal exemptions remained low so that taxation in 10 continue to be much more universal than it had been in the past. you can argue since st. andrews gone through third era tax rates have come down across the board and more and more people on the bottom half have been removed from tax rolls entirely said today half of households actually pay no federal income tax at all. so it's almost certainly true changes in marginal tax rates have had some impact upon economic growth. brain wants to argue they then determine it is of growth. for example, perhaps the most telling statistic and cost of high taxation is before the introduction of the federal and can tax cut annual growth with 4% come on to your senses that only 3.2%. this sort of comparison metellus next to nothing about the relationship between growth and tracks is, even if it was valid,

and many other things are absent of the federal income tax change between those two periods. but these numbers are misleading because they don't take population growth into account. higher population growth rate in the pre-1930 era grew the economy, but those were found more people of course. i per person basis, gdp from 1790 to 1913, the pre-income tax aircrew not by 4%, but by 1.5%. from 1913 to 2011, grew by 2%. per person growth has been nice if the income tax was introduced, not lower. these come from the same source that brian is and they really showed there's no basis for arguing that had conditions not changed in a 13 count the poor and middle-class to be better off today. the very mechanism and income tax contribute to a precipitous decline in the trend is slipping standards for those not at the top of the income.

so to be clear, i'm not arguing the introduction of the income tax increase growth. i'm only pointing out to properly analyze the evidence actually contradicts the claim. and by the way, the piketty and saez data shows for the bottom 10%, they are three times richer now than in 1917. so whether this precipitous decline of living standards comes from. okay, brian also says the high tax rates of the 1930s were responsible for respectively the strong and weak growth of those two decades. similarly, he argues the post-build was to find a small period of 60s and attributes timing to piketty's tax cuts, but in neither case does he disentangle these changes in tax rates from other changes affecting the economy. an easy way to make this point is to take a look at this chart. i put together several business

cycles. i commend a few small ones between 193757 to get these roughly to be 10 years. i plotted gdp per capita against the average top marginal tax rate of the business cycle. what you can see in the shaded area is there are actually two of these transitions between business cycles that support brian -- i'm not using this right. basically the two. cc from 1937 to 48 and from 1948 to 57, you can see the tax rate increase in annual growth declines precipitously in the next. from 1957 to 69 tax rates decline and growth increase. all of the other periods, evidence mostly goes against brian see how. so when tax rates decline,

growth rate -- i'm sorry, when average top marginal tax rates declined, you saw a decline in growth, not increasing growth pace again i'm not arguing. i am making a point the evidence of the paper really doesn't help why make the case he wants to make. okay, so when i compare marginal tax rates to gdp per worker rather than per capita, the picture gets better from three out of the seven transitions. they go to the direction of brand hypothesizes. but interestingly from 1940 -- 57 from 57 to 69, what happens is taxes decline in growth for workers float. again, it is noteworthy because brain wants to argue the 1960s was really the only part of this era that experienced any growth that was largely because the tax

cuts. that is a function of choosing the golden era starting in 1944 when we were in the middle of world war ii, but a lot of are prime age workers were fighting overseas. in 1960 arbitrarily is kind of the point where things got better. if you measure things for business cycle to business cycle, but this chart shows exactly than 1848 to 57. looks good. 2% annual growth over those nine years. if you look at gdp per worker, it looks better from the 1957 to 1959 era. from 54 to 48 there is a precipitous decline in growth. that stands to demobilization from world war ii that occurred in one year between 1945 and 1946. when gdp per capita dropped by

12%. didn't have anything to do with high tax rates. the economy. so to repeat, i strongly believe the high tax rates in the area had a negative impact on growth, but brian's paper doesn't support that case through the second part started arguing that increases -- declines in inequality of trade up in the form of slower growth that hurt the middle and bottom. the second party is now arguing that actually there hasn't been an increase in inequality or previous decline in inequality. it's all kind of an artifact of tax data. suppose both can't be right, but let me assorted tackle the second argument as well. brand brian argues the art

inspired that we should take condensation forms that don't show up in the data or shift and otherwise ways that are obscured from the data that is showing first declines in net increases inequality. this is almost surely true to some extent of an empirical question of how much. and so, i think where i disagree -- i agree with brian ensured that allen, who everyone's should read his book, it's an important question and potential weakness of piketty and saez data appear but i disagree about how much tax avoidance is likely to affect piketty and saez figures. brian noted in his work just saez is sensitive to marginal tax rate as to elasticity that you were talking about. he asserts despite the evidence of his later quote, famous work

on income inequality, saez makes no income. that's just not true. if anyone has access to the quarterly journal of economics, they can look at either page four or 30 went to see for themselves. one doesn't have to agree with piketty and saez conclusion that it doesn't affect the result, the piketty and saez to acknowledge the issue. in may 2004 paper that empirically tested this sort of income shifting to affect its results. he concluded two points out of the nine-point increase from 1960 to 3000 could potentially be explained by the marginal tax rate changes. again come you don't have to agree have to correct conclusion, but she take a look at this and take it somewhat seriously. furthermore, there is an issue that elasticity of taxable income than mixologist complicated. so the fact that reported

taxable incomes could be sensitive to tout marginal tax rates could derive from several causes. so what brian is talking about what allen has been talking about is that the rich concerted move their income, avoid income taxes or capital gains taxes depending on race change. if that doesn't show up in the data and produces an artifact of change in inequality. but another affect embedded in this elasticity is that the folks at the top may simply work less or to invest less in which case you'll see a decline in income are increase in income because of that response. but it's not an artifact. a quality to change as a result of that. so it doesn't actually hurt their conclusions at all. so the big question is what is income shifting elasticity