cut, that is a failure of leadership, a failure of government and which ought to be ashamed of ourselves. -- and we ought to be ashamed of ourselves. we can baker vigorously and have majority rule at the end of the day. but making hard choices is what the business of government on a good day is all about. applying arithmetic is irresponsible. >> we will get this gentleman right here. you too will be the last two. >> with in the dod strategy, you talked about responsibility -- the reverse ability clause which impacts us tremendously how is that even functionable even in light of sequestration? how can you implement that?

>> i am not sure you can. >> it cannot. [laughter] we have gone pretty far down the road in anticipating in irresponsible way what sequestration would mean in a responsible way what sequestration -- we have gone pretty far down the road in anticipating in a responsible way what sequestration would mean. when we move to a question of reverse ability as a matter of strategy, that is frankly too far out in the darkness to define the challenge with any degree of regularity. all we know is that the national guard now plays a vitally important role in terms of our

domestic security. that role has changed considerably and in general moved in a positive direction over the last 10 years. the reality of asymmetric warfare, weapons of mass destruction, terrorist adversaries and nation states to execute these kinds of attacks prompted policy that moved the national guard to the forefront in terms of the safety of american citizens here at home. most of those missions would be executed intel 32. title 32 is federal funding that is received through the department of defense. and sequestration would cut that funding. so the impact on domestic missions is inevitable and i think unacceptable. >> politico. this may be a good question to wrap things up with. what do you see as the solution? this all depends upon whether congress can come up with a deficit reduction plan, which is a whole other can of worms.

i know there is uncertainty with sequestration, but how do you see this playing out? them kicking the can down the road? or sequestration actually does happen? i know it is a crystal ball question, but i would like to see what you guys think will happen. >> is going to happen or should happen? i'll answer that. i launched into my boys got description of the legislative process in the were the democracy and i talked about some of the men and women have known in the congress of the united states who are truly courageous, or willing to make hard choices -- who are willing to make hard choices and you know that this is more

important than the continuing progress of their political careers. and when the people spoke to stop laughing, i press that point. there are good men and women on both sides of the aisle. i am a democrat. i take a fairly conservative approach to security policy .oul the exhibit of branch of government can strongly influence and inform policy choices that will be made and the power of the purse is in the congress. the budgetary decisions that have to be made and it is the duty of the executive branch to provide the kind of leadership for our country and in providing recommendations, budget recommendations, to the budget -- to the congress of the united states. if you cannot make our

decisions, get out of congress. it may mean that a large number people leave the congress. but this is too important. we're not talking about secondary issues. we're talking about the security of the american people in their own homes. 3000 people died on our own soil. and in our own airspace as a result of the attacks of september 11. 3000 people dead. that type of attack was not an occurrence. it was a case study. and asymmetric warfare in the 21st century. so we only to sober kilobit, -- we all need to sober up a little bit, a lot in some cases. to make hard choices, debate fiercely and sincerely, and then count the votes. we can no longer duck these issues because what is at stake is not a political career.

it is the security of the american people here at home. and the images of september 11 should be burned into our memory, not as a matter of fear mongering, but as a sobering recognition of what warfare looks like when it comes to our own soil. and these issues have to be debated. budgetary constraints have to be made. and responsible judgment has to be made in kind -- in coordination with the executive branch can we decide to draw down the forest research and degree in a way that makes sense that will provide continuing defense to our nation. i am still enough of a boy's got to believe that good men and women on both sides of the aisle in the legislative -- boy scout to believe that good men and women on both sides of the aisle in the legislative branch can do

this. this generation is capable of making the same tough choices. >> ladies and gentlemen, the reason we put this panel together was that a lot of people understand sequestration if they live in fayetteville, n.c., san diego, calif., places where there are large defense facilities. but my concern is that there are a lot of folks in this country that don't understand that, if not done with some degree of , these cutsentsense will affect every single state and territory in america and a adversely in their ability to deal with the local issues, the 1617 states today that have guardsmen called out or, god forbid those events that are

describing here in our capacity to respond to them in a knee -- as a nation. the guard is a huge part of that. sequestration is cutting off the fat guys head when the bad guy really needs orthoscopic surgery on his bad knee and a counselor. we need procurements and that kind of thing, not just lopping off a chunk of the body. that is a poor way to do it. and the guard come in this case, whether we like it or not, the guard will be adversely affected by that. this is an awareness and education session. i would ask you to join me in thanking our panelists. there have been very eloquent. [applause] and we thank c-span and abc radio for

>> the brookings institution is set for tomorrow in student literacy and how schools can better teach reading.

>> i started as a copier in "the new york times." a training program in the army for "the wall street journal." >> they built a facility for 40 people. scarborough for everybody. if you spent $4 million on an elementary school, i bet it would raise some questions.

>> housing experts and civil rights advocates discuss home foreclosures come the cost of rental housing and mortgage lending practices at the center for american progress today. former obama administration housing secretary, david stephen expressed his concern about access to affordable financing. also at the event, national council policy dirt, janis bowdler stated the topic of housing has been at lord of the campaign trail. this is an hour and 45 minutes.

>> good morning, everyone. i am david abromowitz commit senior fellow at the center for american progress, also a partner in on behalf the home for good alliance, we welcome you out here on a warm august day in washington.in washin notably, it is five years since august 2007 at the financial sector in the global economy began to collapse. the foreclosures have jumped the. fear before by 75% over 2006. bankruptcies of subprime lenders have also shot a.2006. bankruptcies of subprime lenders had also shot up but until that summer, many commentators just talked of this as a subprime housing crisis. but in august of 2007, what had

seemed isolated to the housing sector turned into a freezing up of the international financial sector. banks stopped lending to each other. wall street loan securitization stopped. no one was sure exactly who held junk securities in their portfolios and which institution would collapse next. fear and panic spread through the global markets and everyone in this room knows what unfolded after that until today. today, the legacy of the policies and practices that led up to that systemic collapse remain painfully clear. millions of american families have already lost their homes to foreclosure. millions more are still hanging on but we don't know for how much longer, and have lost all their equity. at the same time, production of new homes and new rental apartments have dropped to generational lows, so with people moving back to the rental market and the echo generation looking for housing as it comes

into the work force or looked for work, rents are rising rapidly and already, diminished supply of affordable rental housing is stressed even more. worse still, communities that could least afford to lose wealth or to see opportunity foreclosed have been the communities hardest hit. roughly 25% of african-american and latino borrowers have already either lost their homes or at serious risk of foreclosure. this is double the rate of white families in america. sadly, this legacy of the foreclosure crisis is hardly surprising, when you consider that during the unregulated era that inflated the housing bubble, african-american and latino homeowners with good credit who should have been sold safe prime loans were three times more likely than majority borrowers to be sold risky subprime or high interest loans. naturally the foreclosures

followed in higher impact. unfortunately, almost since the housing and foreclosure crisis began, many in the public arena, including many elected officials, have put forward what i would consider a skewed perspective on the underlying problems to address. it's become all too common to blame the homeowners and absolve the lenders. this perspective tries to minimize or ignore the ways in which the private sector financial community contributed to bringing about the crisis. no one sector is to blame but certainly all share some responsibility. importantly for policy prescriptions, we are told that the biggest problem we face in housing going forward is a need to free up the private sector even more. the home for good alliance is coming together and has come together because we believe strongly that we need to look at the whole picture of the housing challenges. it's time to focus back the issues in the housing policy

area on where it belongs, on the people affected. questions such as what policies are best for the vast majority of americans who are having a hard time keeping up with the rent, what can be done to help those barely holding on to their houses, where's the opportunity for americans doubting that they will ever have the opportunity to own a home no matter how hard they work or how well they save. we chose to hold today's event in mid-august not because it's the best time to hold an event in washington, but because we're entering a critical phase of the presidential campaign for the election of president and most of congress. our speakers today will challenge the candidates and others running for national office to address in detail where they want to take us in housing policy. to accompany this, several of my colleagues have today released an issue brief. it's time to talk about housing and you'll find copies in the back and online, which asks questions of each candidate to be addressed.

now, we are certainly going to hear during the campaigns that americans want equality of opportunity and this is certainly true. it's a deeply held american value. but opportunity takes on many forms. it certainly does not come from building into the structures of our housing finance system another era of leaving many behind. as the home for good open letter to the presidential candidates rightly puts it, despite the progress that we've made as a nation, unequal opportunity and discriminations by banks, brokers and others based on race and ethnicity have meant that community of color are among those hardest hit by this crisis with historic losses in assets and savings. i'm reminded of this in somewhat personal terms. my father-in-law was a poor kid in chicago who enlisted in world war ii, became a navigator and flew many bomber missions in europe. he tells often of the fact that while he was on bomber missions, he and his crews were saved by

the tuskegee airmen more than once. when he got back, he was able to get a low interest, no down payment, virtually no closing cost v.a. loan for a poor kid with no credit. that enabled him to buy a house. that house enabled him to have equity to start a business and to roll into a better house. so when my wife and i, when it came time for us to buy a house, my father-in-law had some equity that he could pass on to the next generation. we don't know exactly who was flying for the tuskegee airmen but what we do know is largely through the policies and practices in the system at the time, that same airman probably also poor from chicago, was excluded from the same opportunity so his generation did not have the opportunity to build wealth, to pass on to the next generation, and so on. what we can't do is create a new system coming out of this crisis which perpetuates a generational non-opportunity to accumulate

wealth. so to help us understand what is needed for effective housing policies and what issues the candidates need to address, we have assembled a fabulous panel of experts today. a little later, my colleague, janneke ratcliffe, will introduce and moderate the panel. first i want to turn the podium over to janet murgu of the national council of la raza. she is more knowledgeable than many in the room and around washington on the issues we're going to address. without further ado, please come up and give us the overview. >> thank you, david. i appreciate that. that sets the bar very high. i doubt that i am more knowledgeable than many in the room. fortunately, i'm not on the panel so i won't have to prove that claim but i want to thank you and our colleagues here

hosting us at the center for american progress, in particular janneke ratcliffe, john griffith, julia gordon and their teams, for all the energy that went into today's events. i also want to recognize that in the room we have manuel ochoa and mandy alvaria from a local ncr affiliate. you will hear more from them later but i want to point them out in case anybody in the room has questions about their own home loan or questions about the local housing market. throughout the summer, the home for good campaign partners have hosted community events like this one, from detroit, sacramento, las vegas, columbus, ohio, miami. we've been hearing from homeowners that tell us that the housing market still needs a lot of work. in fact, our nation continues to face a home opportunity crisis. analysts are telling us that this year, we'll likely see at least two million foreclosures with many more at risk. this means that hundreds of thousands of senior citizens are

losing their economic security. children and families are being uprooted. and neighborhoods are being blighted by vacant properties. making matters worse, unequal opportunity and discriminatory targeting of communities of color by deceptive lenders means that minority families are among the hardest hit. all of this results in a continued drag on the economy and that hurts us all. fortunately, we all in this room know that there are proven and practical solutions that can stop needless foreclosures that can restore affected neighborhoods and preserve fair and affordable lending. we can do this while making sure that home ownership remains a pillar of american opportunity into the 21st century. over the past year, we've actually seen some progress on this front by the obama administration and certain states and by some lenders and that has actually reduced the number of foreclosures facing american families for sure, but

they fall far short of what we need and they're not getting to scale, and many have not included adequate measures to address unequal opportunity or the discrimination that's happening in our communities. the home for good campaign as david mentioned calls on our presidential candidates to commit to addressing our shared concerns. you can support this effort, everybody get out your postcards, i know you got them on the way in, by signing this postcard. together, we're going to tell the candidates to come to the table with real solutions to stop needless foreclosures, expand affordable rental and revive a sustainable path to home ownership. so far, the topic of housing has been all but ignored on the campaign trail. neither candidate has laid out a clear strategy for a mortgage system after this election, and this is troubling, considering the role that housing plays in our economic recovery. the home for good campaign partners are not coming to the table empty-handed. we have offered up our own set

of solutions which we've gathered in a document called the compact for home opportunity. spearheaded by our partners at the opportunity agenda, the compact for home opportunity lifts up proven strategies for a balanced and accessible housing system. in it, we call on policy makers, industry leaders and everyday americans to commit to real solutions and implementing these in a way that are enforced and accountable to make them as effective as possible. the compact encompasses both immediate remedies and long-term objectives. we invite you to go to my home for good.com or you can get out your cell phones now, text the word home to 62571 for more information about the compact for home opportunity and the campaign to make these solutions a reality. now, it is my great pleasure to introduce vicki schultz. miss schultz is deputy assistant attorney general for civil rights division at the department of justice. we really appreciate her

willingness to stand in at the last minute for the assistant attorney general, tom perez, who couldn't make it, but vicki is fabulous. we know her well and we're excited to have her here. in her current role, she oversees the division's work on fair hsing and fair lending issues in partnership with several federal agencies such as the department of housing and urban development and the department of treasury. previously, miss schultz served as senior advisor to then maryland labor licensing and regulations secretary tom perez. i would like to commend miss schultz, assistant a.g. perez, eric halpern and others, part of the doj civil rights division, for their groundbreaking work to investigate discriminatory lending practices and bringing justice to families swindled by steering and unfair price hikes. miss schultz? please come to the podium. >> thank you. it's indeed my honor and privilege to be with you today.

i want to thank the center for american progress for being the forum in which we can have this important discussion and certainly the national council for la raza for spearheading this important effort to keep a focus on this housing crisis. we know there are many families struggling and until we can address those issues, we should not rest. i do send regret from the assistant attorney general, tom perez. he was called at the last minute to be part of a delegation to the dominican republic for the installation of a new president, and therefore, i'm stepping in, but i will tell you that i'm absolutely thrilled to be here today, because this is a critical issue and we are focused on the issues that you care about, because we, too, care about what's happening throughout our country. the promise of equal opportunity is at the core of our american values and our ideals. from the opportunity to learn to the opportunity to gain fair

access to credit, to earn, to live where one chooses and move up the economic ladder, our laws seek to level the playing field and provide the cornerstone of that economic opportunity. and one of the most basic building blocks has been home ownership. as an administration, our job is to enforce the law so that every eligible person has equal access to credit and housing opportunities. free from fraud and abuses and free from discrimination. it was the absence of such enforcement that contributed to the housing and foreclosure crisis and led to many of the abuses we are working hard to remedy. this is why in the wake of the housing and foreclosure crisis, the federal government under the leadership of president obama has responded forcefully. with unprecedented levels of foreclosures, mortgage servicing practices have not only failed

to adequately address the crisis but have exacerbated the problem. these practices along with abuses in the foreclosure process prompted the department of justice in coordination with hud and the hud office of the inspector general, 49 state attorneys and state banking regulators across the country to conduct an extensive investigation into serious violations of state and federal law. these violations included use of robosigned affidavits in foreclosure proceedings, deceptive practices in offering of loan modifications, failures to offer non-foreclosure alternatives before foreclosing on borrowers with federally insured mortgages and filing improper documentation in federal bankruptcy court. as a result, the department of justice with these other federal agencies and state attorneys general have reached a landmark $25 billion agreement with the nation's five largest mortgage

servicers to resolve the allegations of mortgage loan servicing violations and foreclosure abuses. the agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future. the joint agreement, the largest federal, state civil settlement ever obtained, requires servicers to implement comprehensive new mortgage loan servicing standards in addition to the $25 billion. in keeping with the homeowners bill of rights, president obama nou announced the servicing standards require that homeowners be treated fairly. for example, establishing a single point of contact, a commitment that homeowners will get assistance before a servicer seeks foreclosure and that foreclosure will be sought only after other options fail. these standards in combination with vigilant monitoring will help transform the servicing industry. significantly, of the $25

billion servicers have agreed to pay, $20 billion will go toward various forms of financial relief to borrowers, including principal reduction, refinancing and other types of relief. since time is of the essence for a family facing foreclosure, there are incentives for servicers to provide relief sooner than later to homeowners in the agreement. while it is clear that communities all around the country have been devastated by the abuses in the housing crisis, african-american and hispanic families have been hit especially hard. discriminatory lending played a particularly devastating role in the housing and foreclosure crisis, draining significant wealth from all communities but especially from communities of color. our enforcement actions show that too often, african-american and hispanic families paid more for loans because of their race or national origin, not based on

their credit qualifications. too often, african-american and hispanic families were steered to more expensive and risky subprime loans based on race or national origin, not based on their credit qualifications and regrettably, some lenders refused to lend in minority communities, making assumptions based on the race of residents rather than their credit qualifications. to address discrimination in lending, attorney general holder created a fair lending unit in the civil rights division's housing and civil enforcement section. since the establishment of the fair lending unit, thanks to the committed career professionals in the division, we have brought record numbers of enforcement actions in the approximately 24 months since the unit was established. the division filed or resolved 16 lending matters. i think now 17, by ways of contrast from 1993 to 2008, the

department of justice filed or resolved 29 lending matters, an average of less than two cases per year. the division produced unprecedented results in 2011 alone. we filed a record eight lending related federal lawsuits and obtained eight settlements, providing for more than $350 million in relief to victims of illegal lending practices. this includes our settlement with countrywide financial corporation, the largest lending discrimination case ever brought by the department of justice, and our settlements as well as record settlements under the service members civil relief act. no one case, however, can rectify the multitude of unlawful practices in the housing and lending market that contributed to the nationwide housing and foreclosure crisis, but as the enforcement record illustrates, the division's fair lending unit uses every possible tool to address the range of abuses seen in the market in both mortgage and non-mortgage lending.

collaboration, however, is critical to all we have accomplished. much of our fair lending enforcement is done in conjunction with the banking regulatory agencies and the president's financial fraud enforcement task force, particularly its nondiscrimination working group, which the assistant attorney general, tom perez, co-chairs. in addition, from 2009 to 2011, the bank regulatory agencies, the ftc and hud, referred a total of 109 matters involving a potential pattern or practice of lending discrimination to the justice department. 55 of the 109 matters referred involve race or national origin discrimination. a combined total that is far higher than the 30 race and national origin discrimination referrals the division received from 2001 to 2008. our enforcement efforts have been enhanced by the consumer

financial protection bureau, a new and critical partner. we work closely with state attorneys general as evidenced by the countrywide case that was done in coordination with the illinois attorney general's office. from that settlement, that $335 million settlement, more than 50 times larger than the division's next largest fair lending settlement at the time, our complaint alleged that systemic discrimination over a four-year period violated the equal credit opportunity act and the fair housing act and impacted more than 200,000 african-american and hispanic families. at the core of the complaint is a very simple story. if you were african-american or hispanic, you likely paid more for a countrywide loan than a similarly qualified white borrower simply because of your skin color and if you were african-american or hispanic, you were far more likely to be steered into an expensive and risky subprime loan than a similarly qualified white borrower.

african-american and latino borrowers who walked into countrywide's door had no idea they could have gotten a better deal. nothing can undo the damage that hard-working responsible families suffered as a result of these types of discriminatory practices, but the relief for victims of discrimination will begin to address some of their financial losses and make clear that that kind of behavior will not be tolerated in the marketplace. in addition to the countrywide case, we also reached our second largest settlement against wells fargo for steering and pricing violations in its wholesale mortgage lending. there will be a minimum of $125 million in direct compensation to wholesale steering and pricing victims and a commitment to provide additional compensation for any retail steering victims found. further, wells committed $50 million in down payment assistance to borrowers in targeted communities where substantial victims were located. this will begin to address the

community harms that are a consequence of such discrimination. additionally, we have brought other pattern of practice pricing discrimination cases since the unit was established, including multi million dollar settlements with aig federal savings bank and prime lending as well as the first unsecured consumer lending pricing case brought by the division in at least a decade, and a case we filed against a regional lender, gfi mortgage bankers incorporated in collaboration with the united states attorneys office in the southern district of new york. many of the division's pricing cases have relied in part on disparate impact analysis to show a violation of law. this approach has been unanimously accepted by the courts and the division is using all of the tools in our arsenal to root out discrimination, including disparate treatment and impact analysis when supported by the facts. we settled redlining cases in

2011, one against citizens bank of flint, michigan and the other against midwest bank center of st. louis. citizens agreed to, among other things, invest $3.6 million in wayne county and in the city of detroit. midwest agreed to, among other things, invest $1.45 million in african-american neighborhoods in st. louis. our settlements seek to expand opportunities for minority communities and individuals to access good sound credit in areas where lenders had previously denied such services. however, our settlements never require a lender to make a loan to unqualified borrowers. the department's settlement agreements repeatedly refer to extensions of credit to qualified applicants only and we know there are plenty of qualified minority borrowers. further, the department makes clear that no provision in any redlining settlement agreement

or any of its agreements including any special loan programs or loan subsidy fund commitments require banks to make any unsafe or unsound loans. we want to encourage responsible lending throughout these communities and sound products. last year, we also brought our first fair housing act case alleging discrimination against women on paid maternity leave and mortgage insurance against the nation's largest mortgage insurance company and two of its underwriters. that case is currently in litigation. in addition to our traditional fair lending work, we have stepped up efforts to protect the rights of our service men and women through enforcement of the service members civil relief act. we've moved aggressively to protect service members whose homes were foreclosed on in violation of that law. as a result of our settlements, with six national servicers, the vast majority of all foreclosures against service members will be under court ordered review. recently, we reached a $12

million settlement with capital one that will address scra violations throughout cap one's lending arms. our fair lending enforcement has helped shape and define what access to equal credit means under the law for all borrowers. just as our enforcement continues to ensure that people have equal access to housing opportunities, the ability to live where one chooses without facing discrimination is the foundation upon which we build our lives. the opportunity to choose where one lives is essential to enabling individuals and families across a spectrum of race, ethnicity, disability and sexual orientation, the opportunities to have a choice in the selection of schools, access to job opportunities and the ability to engage as fully equal members of their community. for example, the department settled its lawsuit against the city of new berlin, wisconsin,

for discrimination in violation of the fair housing act filed in june 2011. the lawsuit alleged that the city of new berlin blocked 180 unit affordable housing project that a developer had proposed for the city center area. the city's planning commission initially approved the project but reversed course and denied it weeks later after hundreds of residents objected to it, based partly on racial stereotypes and fear that the project's tenants would be african-american. in response to public opposition, the city changed its zoning and land use requirements to bar affordable housing in the city center in the future. our settlement requires that the city not take any further action to obstruct or delay the affordable housing project and also requires that the city take affirmative steps to provide for future affordable housing, including the requirement that the city communicate its commitment to fair housing by

establishing a housing trust fund that's capitalized with $75,000 initially to assist such projects. equal opportunity isn't just about individual rights. it's about community prosperity and stability, and it's about economic growth. this administration and this department of justice has and continues to be committed to full and fair enforcement of the laws that protect people from fraud and abuses, and keep open the doors of opportunity for all. we remain committed to addressing the harmful practices prevalent during the mortgage meltdown but will also investigate and bring enforcement actions to confront emerging discriminatory practices in the credit and housing market. we will continue to aggressively enforce the law to protect the rights of service members and all who face discrimination to ensure fair and equal access

credit and to housing opportunities for all as the law requires. thank you for letting me be here with you today, and i look forward to the discussion ahead. >> thank you. thank you so much. again, thank you for all of your great work over at doj. it really means a lot to the community to see justice brought to our families. so now i would like to welcome up to the podium janneke ratcliffe, fellow with the center for american progress, and the rest of our panelists. >> good morning. i'm janneke ratcliffe, senior fellow here at the center for american progress, and also the executive director for the center for community capital at the university of north carolina at chapel hill. since north carolina's a hotly contested state and we have a

nominating convention coming to charlotte soon, it's nice to be able to get away from politics and come up here to washington today. but thank you all for coming. welcome. it's an amazing range of experience and insight that they bring to the question of sort of looking at where we stand today and how we move forward. as david pointed out, five years since the financial system really began to unravel. so for quick introductions, over here on my right, the far right, david stevens is president and ceo of the mortgage bankers association. leading his industry forward in these challenging times, he brings an impressive career as a lender with world savings bank and freddie mac and wells fargo. in real estate, as president and coo of long and foster and most recently on the public side as former commissioner of the fha. thank you for joining us today. next we have terri ludwig, president and ceo of enterprise

community partners, which provides capital and expertise to create affordable homes and rebuild communities. she's previously led merrill lynch's community development company as well as a large nonprofit lender to small businesses. "forbes" magazine recognized her as one of the world's leading social entrepreneurs. welcome, terri. then to my immediate right is jim carr, housing and finance consultant, and former chief business officer of the national community reinvestment coalition. he previously headed housing research at fannie mae, worked at the center for urban policy research at rutgers, served on advisory boards at numerous colleges and universities and is currently a visiting professor at columbia university. jim is a deeply engaged academic serving many organizations promoting economic opportunity, both domestically and internationally. so thank you, jim. echoing the home for good points that janet has described, i would like to ask you to start us off. let's begin with foreclosures.

the white paper that cap is presenting today reports 3.5 million foreclosures since 2008, notably that is less than the 3.7 million households that are currently either delinquent or in the process of foreclosure, but housing economists are starting to talk about a bottom to the market and maybe even recovery on the horizon. how does this square with what you observe? is it time to stop working on foreclosure prevention solutions? >> thank you, janneke. i think that's an excellent way to start the conversation. i'm amazed, i have been hearing analysts, particularly housing economists, argue that we are seeing a bottom to the housing crisis going all the way back to 2007 before the crisis even really ensued. so it seems we're back there again. the fact of the matter is just as the economy has shown sporadically glimmers of greater hope, then lost steam, the housing market continues to show greater hope, then loses steam.

so i think we need to be careful about being overly optimistic about the current state of the housing market, because if we do, it may lead us to taking actions that will severely hurt the budding recovery of the housing market and that is to stop actually actively working to repair the housing market. it remains in deep trouble. let me just talk about a few reasons why i say that. on the positive side, house prices appear to have stabilized and in some markets, we're actually seeing some healthy increases, but it's important to remember that house prices are still down nationally by more than 30%, and as a result of that, we've lost over $7 trillion in housing wealth. we are nowhere near having rebuilt that lost wealth. in addition, we have more than 20%, closer to 25% of households whose mortgages are valued at more than the houses themselves. that translates into about $700 billion of upside down mortgage debt. again, we are nowhere near having wiped that out.

now, one of the key reasons that foreclosures have fallen and it's one of the reasons we have to be careful about celebrating too much about the data is that foreclosures fell significantly between 2010 and 2011, by about 35%, and that certainly is something to celebrate. but it wasn't due to the fact that consumers are more economically able to maintain their homes or that servicers got more effective at modifications. the fact is the foreclosures fell because of legal impediments faced by servicers to actually foreclose upon. now most of those legal challenges are out of the way, and as a result, one report that i just recently saw has morgan stanley estimating there are about seven million homes in the foreclosure pipeline and the servicers are now free to clear out those pipelines. in addition, if you look at data regarding say mortgage purchases, or new construction, both of those numbers again are

up. mortgage purchases in particular look to be on the right path, but if you tease out approximately 7% of -- 70% of those which are refis, that's good for the economy right now but that's not sustainable over the long term. purchase mortgages are in fact still pretty significantly below what we would expect in a normal market and the same thing for housing construction, up but still anemic relative to a strong market. a couple other points i would like to make. that is, when you're looking at the housing market, it's really important to understand housing and the economy are really linked at the hip. so for the last four years, the largest driver of foreclosure has been the economy, underemployment or unemployment, loss of income. the reality of it is that the economy is still in a very precarious position. anyone who is following the news knows that europe, for example, is each day sliding closer into an abyss and as they do it's having negative effects on our economy but the truth is, we don't need any help from europe

to damage our economy, because we're en route to doing it ourselves. we are not looking at and debating in washington competitive investments in america to actually get america back to work. instead, most of the dominant conversation is around this fiscal cliff that's coming in the beginning of the year. which means the focus of that conversation is on deficit reduction. that's not to say that deficits aren't important and we don't need to address them, but we need to address them in the context of a comprehensive investment program for america because the best way to balance the budget is to put america back to work and instead, we're really focusing on counting the numbers toward the fiscal cliff. so i think it's way too premature to say the housing market has bottomed out, that we're recovering. we really need to be very diligent in doing everything we can to mitigate foreclosures and we need to not forget the damage that was done, particularly to those communities of high concentrations of foreclosure. we need to be addressing those neighborhoods.

we need to be rebuilding those communities. we need to get the housing home ownership market straight and we need to be really leveraging the fact that we have house prices now that are down by more than ten years' worth of loss in price and actually using those and leveraging that as affordable housing opportunities, particularly for low and moderate income and minority households. so i would say the bottom line is we've seen some good news and i think that that's good. i think we should accept the good news as it's better than bad news, but we shouldn't run too far with it and conclude the market has bottomed out and now we can sit back and watch the recovery, because that won't do it. >> thank you, jim. so terri, as jim points out, families still losing their homes at a great pace, and again, according to our paper, a third of the population, some 100 million americans live in rental housing today. that's probably only going to go up as new households are either not able or not as eager to step into home ownership. but there's a growing shortfall

of affordable rental and as rents are rising, it's only getting worse. so it seems like a key opportunity to reposition policies around rental housing, especially quality and affordable rental housing. what are the prospects for getting it right this time? >> let's hope strong. but i would say that the perspective i would like to bring to the conversation is just enterprise is someone who is working at the national agenda but also in local communities across the country, and so as, you know, i kind of share our perspective today, i think it's really important to look into the local communities and think about what's really happening as we talked about, and i think that's right. so i think that where enterprise stands today and what we promote, you know, on a national level is thinking about how we achieve a more balanced housing policy. so there's no doubt today where we are in the cycle, that there's tremendous opportunities for home ownership and we think that's vitally important for building wealth and critically

important. at the same time, as you said, the growing need for rental is there and i think many of us in the audience, you know, read all the statistics, whether -- i was just looking at the joint center at harvard, their housing study which comes out each year and i think what we've seen over the last decade is we've seen tremendous growth in the needs for rental housing and i think in the last six years, you've actually seen demand has more than doubled. and depending on which numbers you would like to listen to, i think by 2010, the deficit between those who need affordable for low and moderate income folks who need affordable rental and what the supply is, there's about a gap of about 5.1 million units which is just enormous. so in the absence of any major policy interventions, we're going to see this trend continue and build, as you said, given the trend that we're seeing with rentals. and we know that we're in this process of going through not only tax reform, gfc reform and

facing a potential fiscal cliff, so i think we all have to be ardent in thinking about how we're going to support the rental sector as we also look at the home ownership policies. and so i guess where we would like to put forward our ideas is to say how do we look at the programs that have really been effective and efficient on the ground and so that ones that can also help us not only produce affordable housing but also preserve the affordable housing that's out there. so one of the programs that enterprise has a long history with and many of you in the room do is the low income housing tax credit. as we know, the low income housing tax credit has been -- it actually was a product of tax reform back in 1986 and it was a reagan policy, interestingly enough, but how do we take a program like low income housing tax credit and make sure that the efficiency that we've seen in that program which i would be happy to argue has been very effective and what it's allowed us to do is create not only

100,000 to 120,000 new homes each year that are affordable rental properties, but it also helps create jobs which is essential. 120,000 jobs along with that. so whether we're talking about housing, we're talking about economic stimulus, i think these all go hand-in-hand. they're incredibly linked. we want to make sure that low income housing tax credit remains on the agenda, remains a strong tool. it's leveraged about $75 billion worth of also private capital. so we think it's vital that we protect some of those critical tools that have worked. in addition, enterprise has been trying to make sure that we have additional programs that also help us address issues around foreclosure. so something like the neighborhood stabilization program, nsp. we know it has been less than perfect, but we also know it's been vital in communities that have been hard hit to try to restore so what we're trying to do to restore. so we're trying to make sure as nsp dollars are used that it's

used effectively and efficiently and we can take the learnings on the ground and make sure the next generation of policies continue to strengthen, and i also think we'll be in a debate. we talked about a balanced housing policy. we're going to talk about homeowner ship tax benefits to benefit more modern income people. we've seen the data out that suggests of the housing subsidies that are out there, over 50% of the subsidies go to people making $100,000 more a year. how do we right size the subsidies that exist to make sure that folks low and moderate income are benefitting from that? we know there's not going to be more money. we know deficits will come down. how do we that in the scope of reality when we think we can make progress in the agenda? i'm delighted to be here today.

the homes for goods campaign, the reason we're here, it's about coming together and crating a shared message for the issues we care about. that's vital for us to think about. how do we really come together about a message with a specific set of priorities so that we do make progress going forward? and then i think we could make some of the progress we hope for. >> great. so on the third point of homes for good shifting for rental and to create a path of sustainable homeowner ship, there's an enormous amount of work in progress and probably more remaining to be done to rebuild the mortgage finance system. and the things we do now will change the way potentially homeowner ship is financed for decades to come. how is it going to look when we're done? what do we do? >> well, thanks.

and i would start off and we would all share your opening point about escaping politics and coming to washington. it's the first time any of us heard that statement. having taken enforcement actions against institutions, starting the dialogue on the service and settlement, which i left part way in between. it's remarkable as we look back, hindsight is perfect. to people who have terrible credit histories and who are high risk families putting them

into programs that they're supposed to get bailed out of two years down the road are assumptions that are unsustainable. we wrap them in loans that are supposedly to give access to homeowner ship. the idea that homeownership wield appreciate in a rapid way in a short period of time, based on history and you could cash out, refinance and take home equity lines of credit. all fuelling the fire can cause extraordinary damage. i grew up in the business. the same industry that i took enforcement measures against while i was at hud. and you hear that. and you hear that message repeated. it's been repeated multiple times already today. those enforcement actions are going to work their way through. the question is, how do we get hope back into the housing system? and the more we have discussions

where you leave wanting to slit your wrists after you hear the debate in dialogue but there's nothing but downside ahead, it doesn't do what we need from a confidence standpoint. at the same time, we don't want to create irrational exuberance towards the future because you don't want people making decisions because of promises of expectations that are too positive as well. balance is really what we need to think about moving forward. i want to talk about a few balances. the first would be balance in homeownership versus rental. when i worked for shaun donovan, he talked often about a balanced housing policy. clearly we have too many families promoted into the hope of homeowner ship and particularly destroyed communities of color, communities of low income levels, communities that were propped up because of 100% financed, nonam rtizing

mortgages sold into the private sector label. you can look at las vegas. you can look at detroit. two different entire sets of products were originated and provided to consumers, and you have similar outcomes for different reasons. that balance has to shift. well qualified borrowers who can prove their ability to repay, that are fully documented, where it's clearly known they'll be able to perform in the mortgages is a critical component. we also need a balanced rental policy. there's clearly going to be greater rental demand. we're seeing shortages of affordable rental in key urban markets now. what is that doing? we're seeing for commercial and multifamily institutions, they're actually having a much better year than they've had in past years, and that's great. it shows us demand for rental housing. but at the same time, how are we going to deal with affordable and rental housing? what happens to tenants who get

displaced because rent prices are rising near where they work? having to move to further out locations where it's more affordable because rents go up in more rent controlled markets simply because there's a supply and demand disbalance. so these are things we have to think about together. certainly the future of subsidized housing finance, where it comes from hud or elsewhere. how we create affordable workforce housing particularly in the rental market is going to be key to this. i'm going to shift to my wes .. access to homeown homeownership. i'm worried in the effort to eliminate risk in the market and eliminate the unfair and abusive practices that existed over these past years that we'll move too far. and so, you know, if you think of the pendulum, small swings in economics in the way the economy functions works, we come from a large swing.

are we swinging too far the other way? i look at rule makings that i participated in. it has a 20% minimum down payment. i don't have to talk about that with anybody here in this room. but we all know down payment is the single biggest barrier to access for first time home buyers. it disproportionately affects people of color, communities of color, hispanics, latinos and african-america african-americans. it ultimately affects these communities the most and the first-time home buyer population. a recent study came out that talked about fha. for first time homeowners with low down payments, fha stands for friends of hispanic americans. not the federal housing administration. if you have a limited payment opportunity in your family because you don't have large amounts of inherited wealth from your parents, and that's due to

cultural generations, you're going to be limited. it's not a matter of fha costing more. it's low level price adjustors, mortgage insurance and other restrictions on fica score, et cetera, end up costing a borrower more. if you go back a decade ago to last year, a decade ago over 80% of all loans to hispanic americans and african-americans in this country were done through conventional mortgages. last year approximately 80% of the same populations of loans for latino community and african-americans were done either through fha, va or -- this shift is really remarkable. and when you look at the rule makings that carve out protections for the hud programs. standards coming down the path. the qm provision, which could have significant constraints to debt income cuts that are defining the ability to repay. we could end up with what i

consider to this be a very desperate impact in terms of access to housing, where fha has a very unique sort of, what's going to ultimately look like a color boundary to it. and then the one percenters are going to get low grade fixed financing because they'll have all those accesses to the economic fortunes that have been passed on and generated through history in this country. and i'm not trying to make this as -- this should not be an ethnic decision. it becomes so simply because of economics and demographics. and so while we're making certain to enforce all the mistakes made by institutions, lenders, servicers of the past, and that work will continue, and we have plenty of that going on. we can all talk about the great things that are happening. the fact of the matter for me is i'm extremely concerned about access to affordable housing

finance credit outside of the fha program, and quite frankly in the fha program, depending on what happens in the political arena over the next couple of years. if we don't really seriously take a look at when do we start reverting our attention to these current rule makings in a responsible way that says we're not going to restrict access to qualify qualified sustainable homeowner ship for a large multitude of participants in the market so consumers get the best options available to them, not ending up with what i call the barbell effect. for people on the margin, you have fha or payday lending. in the middle of the barbell where the bar is are those who aren't going to be impacted by the rules anyway. we have to be really careful about what happens on a go forward basis. to me that's the fundamental dialogue we need to all be having now. the enforcement is occurring in a very rapid way. all the day today about foreclosures, you know, it's

going to be a big foreclosure year. fha only foreclosed on 50% of what they expected to. that's ultimately going to take its course. but we really need o have a serious debate about those impacted by fico, job loss, credit scores. those who need access to homeownership and shouldn't be delayed because of a down payment requirement because we think it's time to be tough on crime and we ultimately over exert the force and create a huge impact by policy, not by lending behavior. and that's the core of concern that i have moving the forward. >> certainly. i would like to before we get into those things stay a little bit more with the question that you both talked about is the balanced housing policy and just to understand. does this imply that america is at some crossroads where we have to choose to support rental or continue to foster homeown

homeownership, or is this a way to connect the dots and ideas on how to get there? >> i think dave painted a really good picture of the challenges and balancing that has to occur. there's just one thing. it's not a digs agreement. it's just a clarification for people who really don't do this every single day, and that is, i think we need to be careful as we engage in the conversation on the balancing of the housing versus rental. and did we go too far? homeownership rates for african-americans, la too knows, never exceeded 50%, even at the height of the bubble. we didn't go too far. and the reason for the foreclosures, and they've said it, just want to write it, is a not because we went to far in pushing affordable, legitimate housing projects. low down payment well underwritten loans. that wasn't the foreclosure crisis. it was subprime loans not

intended to support homeowner ship. so when we're talking about this it can get muddled sounding as if, well, they were using the experimental products and high-end financing to try to get people in who didn't know. that was not it. it was taking people who had the credit score and the the incomes and the jobs and the financial wherewi wherewithal to be good candidates for long-term homeownership and peddling off to them a subprime loan that was intended to require a refinancing within two or three years to trigger fees for the lender that originated the loan. when house prices flattened out, that house of cards fell apart. so when we go back and started talking about the balance in homeowner ship, we need to be talking about what do we see as the potential full homeownership potential using solidly underwritten, well documented low-cost fixed rate loan products called the 30-year fixed rate loan. and since the great depression,

those loans have been underwritten, largely for non hispanic white households, low-income, not really financially sophisticated because the system worked to actually make sure that they got into homes for which they were intended to own, and for which we've almost forgotten this thing called the move-up market. you would be successful in the first home because the lender wanted to connect -- have a relationship with you to go to the next home. that fell apart with subprime. it became we want to stay with you in one home where you keep churning and we keep taking income so you never generate any real income for yourself. we just keep stripping that wealth creation from you. and so, one of the things that also amazes me is when i hear a lot of analysts, economists in particular say we need to rethink homeownership the yo ask if they're a homeowner, they'll say yes. they're really saying we need to really rethink having minorities

as homeowners. so i think we need to kind of not so focus on what's the right balance? we need to focus on what are the kinds of loans that have historically shown to demonstrate that they are the kinds of products that are sustainable, long-term, wealth building. and then let's look and see what are the populations and how do they sort of matchup with the kinds of criteria required to build a strong homeownership market. >> and just a tag to that. people will look back and say it really wasn't needed. if you look at interest rates you'll hear economists talk about it's a free put option for the consumer. this is the way they describe it. it's interesting. you're right. from 1980 until now we've seen interest rates go from 18 down to 3.5. it's been steadily with a couple of blurps, upticks along the

way. if you ever need a 30-year fixed rate mortgage, it's from here going guard on the out years. that's, by the way, to your point, that's why i talk about subprime in the very beginning. seller funded down payment assistant loans on 30-year fixed rate loans, artificially inflated values. half of all borrowers who ultimately got a mortgage are also going to end up in some sort of trouble as a result. and a third are in a foe closure rate. there's a lot of variables in how to how to determine safe and sustainable loans to make sure you're working on access and not pushing people into homes for reasons that won't be sustainable. >> i would certainly echo that from our perspective in looking in local communities i don't think i could say anything different but just echo what

we're hearing. we have a study coming out i don't think it's a surprise. but how we continue is simply not flowing. and so, yeah, we have a repeat of history that's probably really threatening to come our way. we know many communities are low and minority income communities. and i believe we have a tale of two cities. so we have certainly a recovery in some places and credit flowing. but i would say the majority of the places that we're working in are really seeing very challenges conditions. >> if you look at the multifamily environment, their sources of financing are no different than the single family environment. as you think about the demand for rental housing going forward, you know, we need to have a steady flow of capitol to make sure that we can build

plenty of supply in particularly urban communities and the places of work so that there's a supply there. >> and i would also add some of the work that we're doing on the ground, i mean, what we're going to continue to hear about supply rental housing, too, is the overstock of vacancy for the families. so we have to be thoughtful about how we articulate what that means to the economy and how we start to transition the properties to productive uses. which i know all of us are talking about. but i think there's real opportunities to convert some of the single family units to productive stock of rental. certainly rent to own and other sort of programs that we think can lead to either good high quality rental stock or homeowner ship. but there's a huge mismatch between where the homes are and where are the opportunities for jobs, good schools and the other reasons people choose good communities. how we think about the messaging and how we think about the stock

in the face of the conversation as we all go to the hill to advocate for what we believe in, we have to be front and center on that as well. >> so at this particular time to add to that. we need to remember a lot of households who lost the homes to foreclosures were good candidates for homeownership. they were before the crisis. they were before they lost the homes. they still are now. they could not pay the subprime loan and could not get a modification in an appropriate way that allowed them to keep their homes. and so as we're looking at literally seas of single family and/or townhouses, we need to be careful we don't drift to what are the challenges of converting it to rental? we need to ask ourselves what are the challenges to helping the individual who is lost the homes as a result of an

exploited product become a homeowner again? failing on a predatory product is adding insult to injury. as opposed to taking advantage of the fact that we have these incredibly low house prices in many communities across the country and asking ourselves what are the products that go beyond the standard fixed rate. so lease purchase. how do we create a new lease purchase program that's national in scale? that's overseen by federal authorities so that we know it's not a predatory market. and get people back into owning homes in which the credit score doesn't matter because they're leasing it and over three or four years of performing we well it converts to a home mortgage. so we have to think about what happens between rental and owner ship because i think that recoverying from the extraordinary damage that has

occurred is really as essential as building the foe closures. millions of homeowners are just as prepares to be homeowners as current homeowners are today. this is a really important point. it could have been an auto worker who no fault of his or her own because of an economic recession has had their credit score impacted, how do we find a pathway to get them back based on the way we're managing credit standards today? so this is a really important issue. and the current focus on financing, that's great. it puts cash in people's hands.

it's not as stimulative as a home purchase. so the policymakers found the way to get more refinancing done was to eliminate the barriers to access, and i think that's a good lesson. with a lens for sustainability and safe practice. >> that's a really good point. one obstacle from a lot of public policymakers, the resistance to doing more is the perception out there that somehow people are in the trouble that they're in financially because of their own doing. they bought more house than they could afford, et cetera, et cetera, when as dave makes the point and is a really powerful and important point, but it's not as much in the public mind as that a lot of people go into

foreclosure these days, probably the mast majority are a victim of circumstance. the economy, a soft economy, and collapsing home prices and so we're looking at those characteristics of driving foreclosure, then the ability of us and the willingness of policymakers to actually legislate more aggressive foreclosure mitigation should be greater. but we have to first remove the perception that people are sort of self inflicted victims of buying too much home. >> and economic softness was triggered by a bunch of reckless lending at the front end of all of this. and bringing that into focus and because several of you addressed this point are we in danger of losing this? are there concerns about it?

what should we be encouraging the candidates to think about? >> i'll just jump in. you know, it seems almost like blasphemo blasphemous. fannie mae and freddie mac were much bigger in the marketplace. we did 30-year fixed rate loans. we held them on portfolio. we fully documented every loan and we locked in the interest late the night before foreclosing because we couldn't edge forward into what is a vibrant tba market that allows a borrower, a family to buy a home, go under contract, 30 to 60 to 90 days in advance of the settlement and know any interest rate moves won't block them out of the homeowner ship access and keeps the economy moving. if we look at the extreme

versions, in the absence of a complete elimination of a government guaranteed market and a sort of overcorrection on freddie mac and fannie mae's current important role they serve in the housing market, you would see disruption in the current structures of how these 30-year fixed mortgages are being created. the evolution, the volume is created. the securities market, the interaction that's now global in terms of how capital comes in all the depends on this flow. suddenly herky jerk, the water will flow on the floor. it's not going to get to the cup. this is what we have to be careful of. >> and i would say i think there's risk to any policy. given what we're facing today. and i do think 30-year fixed is

a essential policy to retain. i know we see comparisons to markets that have seen fully functioning markets without it. however, i do think it's really important and not only in a housing market, but as you look at the credit crisis more generally and globally, whether in housing or i used to be in small business finance, it's really important to predict the payment. and if you want to get down to affordability and predictability, particularly for low-income families, i think it's essential. and so to have something long term amortizing and has the features that we know allow access to broader range, i think it's essential. >> it's also important for stable renting is to be able to finance the projects with long-term fixed rate funding.

>> i find the whole question surreal. for half a century the homeownership was the most secure, the most stable, the most incredible wealth generating asset. and then all of the sudden in 2000 we had the explosive growth of subprime explosive products. it destroys the housing market. the wreckage of the housing market, we say how do we repair the damage that was caused? and rather than looking at the products that cause the damage, we say, it must be the 30-year fixed rate mortgage that we have to get rid of. it was the 30-year fixed rate mortgage that we got rid of in place of subprime. and the solution is to get rid of subprime and make sure it doesn't happen again. the idea that we need to get rid of a product that for half a century proved itself to be the

envy of the world in terms of building wealth is incredible to me. and you end up with conversations that are strange and bizarre and they tleed to the same products, financial engineering that could lead to another collapse of the housing market. as opposed to sign on the the line. this is payment for the next 30 years. that's what we need. there's no reason to debate if it should exist. >> let's look back 70 years. let's look ahead several years. by 2050 the country will be majority minority, if not sooner. h hispanics lost 60% more than white.

74% homeowner ship for white households and less than 50% for black and latino households. when we look at hispanic households are accounting for more than half of the home purchases in the country today and you look ahead at the growing diversity of the country, what are the implications for how we design housing finance for the future? >> 53% of all purchases in q3 2011 were to the households. in household formations year after year. second quarter 11 to second quarter 12, there was about 893 million households formed, but it was more than that in the hispanic community. we had a net loss in nonhispanics. so resulting in that number, the

joint center fwrafts that the single biggest growth factor is from the latino community. other communities will be growing. but that will be growing the greatest. we need to think about different forms of household formation. i grew up, my parents, and where i grew up, we had single income -- mom stayed home. steady salary. pension for retirement. we need to think about cultural differences. multiple family members that may live together in my community, cash incomes. multiple jobs. self-employment income. they may not fit well in the ability to repay definition or into an existing freddie mac or fannie mae underwriting standard. and we need to absolutely make sure that we're looking at how to include all true verifiable or real income that may not be

able to be counted in a traditional sense. and so it's really an important demographic to drive the u.s. economy and the desire to own a home is extremely high in the new growth communities of the country. and we need to make sure we find a way to meet the need. >> and you talked about the low down payment market as well. >> absolutely. >> i agree. those are important trends to look at in thinking about how we design the next generation of communities to make sure that we're paying attention to cultural differences and making sure that we have products that allow us to look at differences in communities and household formation. i think it also has to do with life cycle. and i think that we're looking at generational housing and seniors. for senior housing, how do we add more density to the housing stock that exists? so if we want seniors or

intergen rational housing, how do we think about that in a more compelling way? people talk about accessory zwelizwel i dwelling communities in a really fancy way. it allows families to be together and have a productive path. it's important if you start to look at the cultural both norms as well as demographics. >> i think probably the first time the census department -- the first estimate of the census department showing that the country would be no longer majority hispanic white. oh well, 2050. that's a long way away. you don't have to worry about it. you got a lot of people's attention when the first report came out to show the majority of

babies now born in america are children of color. that large number of minority children will have a profound impact on every aspect of the economy. every aspect. so how do we integrate the children into the opportunities of america so they can pay the bills? >> they will be a larger share of the workforce as a disproportionate share are retiring. they will be retiring as doctors and lawyers and accountants and people who had good jobs and savings and will be replaced by kids who can't get a job as a cashier. and so we need to think about that. the idea of having a healthy

robust market when half the population are not able to put the foot on the ladder of economic moiblt and economic success. as david pointed out in his comments about his father-in-law, how the housing became the infrastructure to build wealth. not just for himself and his immediate family, but for his children going forward. we need to figure out how to make the ladder of opportunity work for nonhispanic whites get working. it's probably not working well for anyone. but particularly for people of color, we need to figure out that puzzle now. because the latest data show we don't have time to wait. the future is today, right now. >> and i'll be looking for somebody to buy my house at some point as i move down there. hopefully a path will be found. it's time now to open the question up for audiences. we first ask that you give your name and affiliation m and we're

here not to comment specifically on the platforms of any one candidate, because there may not be that much in the housing policy arena, but rather to put things forward that could be useful for them in thinking about their housing platforms. so with that i'm going to start with manuel -- who was introduced previously. he's going to kick us off with the questions. >> good morning. i'm the regional director of homeownership for the latino economic development center. i'm here with a senior housing counselor, and i would like to take a brief moment to tell you about ledc and highlight a story of a real family affected by foreclosure. ledc equips latinos and other residents with the skills and financial tools to create a better future for the families and communities. we help people buy and stay in their homes.

we provide microlending and help start or expand small businesses. we work for stable housing every day here in the region and more than 5500 renters and homeowners have turned to ledc to get the support they need to buy the first home and keep the rental housing affordable and fight foreclosure. so in the past year we provided 2300 hours for in-depth foreclosure to over 400 families. so just two issues that i want to highlight with you briefly today kick off a question. two issues. one is for underwater borrowers, principle reduction is an important tool and we're glad with the national settlement there is more principle reduction taking place. however, the seemingly similar cases seem to be treated differently than we've seen in the past couple of months. we started to see some agree to reduction but it's unclear how lenders are making the decisions.

and we're very disappointed with fannie mae and freddie make saying they would not allow mortgage giants to offer mortgage giants principle reductions. more than 50% of the case at ledc are fann >> also there are foreclosure scams that effect homeowners. o come toy a families come to us needing assistance and they're further behind because they tried to seek help from banks first and then fall victim to foreclosure scams. we are able to educate homeowners on how to avoid scams. yet, more needs to be done because by the time they come to us it's already too late.

to divert vulnerable homeowners of emergency funds, college saving funds, and so we have a responsibility to protect homeowners by reporting the scams as frequently as we can. many are reluctant to support the scams. so rather than rush to foreclosure as we heard other policymakers suggest that we need to clear up the housing market, we believe that it's important to ensure that deserving families -- deserving working families who through no fault of their own have a chance to stay in their home if it makes financial sense for their families. so wendy, why don't you come up here and tell everyone a little bit about one of the cases that we most recently have been working with, and we'll kick off the question. thank you for having us here. i'm a bilingual housing

counselor at ledc. as housing counselors we see difficult cases every day. i want to share a story with you that just walked into the office last month. late last month actually. a few years ago the rodriguez family falls behind on their mortgage when hector rodriguez, the husband, gets sick with cancer. by the time he comes into his office, he's unfortunately already passed away. they're about eight months behind on the mortgage. they have three wroung daughters all under the age of five. they get a letter in the mail promising to stop foreclosure and reduce payments as much as 50%. desperate mercedes caused the

business for help -- calls the business for help to save the house. they ask for 5,000 to try to work out a loan modification. time goes by. now she's fallen about a year and a half behind on her mortgage payments. eventually i tell -- they tell her the loan modification was denied but unfortunately there's no paperwork to back that up. these are the stories that we see on a day-to-day basis. certain stories unfortunately touch the heart of all of our counselors, and we all try to pitch in. months later the scamer tells mercedes the only option left is to sell her house and put the house on the market as a short sale. the scamer tells mercedes that it will be -- that they will buy the house in return -- and return it to her.

to do this they ask for $60,000 to be transferred into their own banking account. mercedes wants to save the little bit that her husband left her for her children. and she make the transfer. the house is put on the market. mercedes tells the story to her psychiatrist. who tells her to come to ledc. we tell her that the story is illegal. what they're doing to her is illegal. there is no way. what they have promised is with those $60,000 they will buy her house and give it back to her, return it back to her.

and she unfortunately believes it. when she comes in as a normal client would come in and sees one of the counselors, the counselor tells her no. there is no way that they're going to do this for you. it's not legal. and they tell her to go back to this person and try to get her money back. she tries to get her money back. they give her $40,000 out of the 60,000. she comes back to our office. kind of happy, kind of sad. at least she has 40,000. but at this point, all of our housing counselors are involved in this case. and we all feel there's no way we can settle for her only obtaining 40,000 out of the 60,000 she has already given this person.

we continue forward. unfortunately this client does not want to come forward and report the case. burr we feel it's our obligation as a housing counselor, just in the case as any medical doctor would report a case of child abuse. it's our obligation to report this case. we did so. we reported it to the maryland department of labor licensing. and this is where we are right now with the case. now, fortunately it got to the point where the third person got a little bit threatened and gave mercedes back the additional 20,000. so she has her 60,000 back. mercedes did go back to the

person's office. unfortunately the office was closed. but the good thing that came about it is three other people also that wanted to know, follow up on this case with this person, they started talking to mercedes. and mercedes told them that what they're doing is not legal. out of the three people, an additional person did come to ledc, who was willing to this week, by this week was given a deadline to deposit 45,000 into this person, the same person's bank account. it's sad. there's nothing we can do about this. the scamers are busy. they're working. so the only thing that we can do is we can come forward and we can share these stories so that more people know. and more people go back home

with questions and those people might have friends and the word does get along. thank you. [ applause ] >> so we debated asking a question of principle reduction or foreclosure scam. we decide to focus on the foreclosure scamming issue. so many people come to us when it's too late. if they came to us early, the options would be different. the importance of reporting scams, it's difficult. we debated just until yesterday on whether or not to use her name. she did not allow us to use her name because she's nervous about it. so just wanted to highlight the question and what you believe can be done at the federal, state or local level to protect homeowners scam and other homeowner scams. >> so the story really shows here at the the department of

justice. there's two things alive and well. and that is scammers and people trying to rip others off on real estate but the strong desire for homeown homeownership. the drive to preserve the home to for the family. as to the scammers, what can we do? >> this is an issue the president made statements about early in the administration. it was something the secretary has been focused on. a lot of counseling dollars flow through hud. i used to travel around the country and visit with housing counselors and certain hard hit markets. i spent time in nevada and other communities, but the thing i thought was a shortage of money. and it's one of the biggest debate debated items of the hud budget.

as a result, the resources, no matter how good the work is being done, there's not enough money to deal with the need. and if the consumer who is being afgted by the scam artist doesn't have a resource and doesn't know where to turn, they're going to be exposed. at the end of the day, it's a difficult one. and looking at the department of justice representative here, you know, it is illegal. and the president has been firm on it. the administration has talked about it. anybody who cares doesn't want this to happen. >> thank you. one thing that's always sort of mystifying is that so much of the abuse of consumers and misbehavior of consumers can be purged by having good quality testing and having the testing results turned over to institutions such as hud.

>> by testing? >> i mean calling the scamming artists and establishing a case against them and bringing legal action against them. relying on the consumers isn't a good way to do it. the fair lending needs to be increased substantially. if you purge discrimination, you purge these abusive behavior from the market you have much less federal dollars to actually compensate for the financial damage done to consumers or for the lack of economic mobility of households. my solution, one of them is just to fund greater activity around per suing scam artists of the surveys of them, the testing of them, and turning over the result an having federal agencies aggressively pursue them and put them out of business. a lot of that has been done by

hud over the past couple of years. a lot more could be done. >> before they take their toll. yeah. >> i would say it sounds like you debated between talking about scams versus principle reduction. you know, it's so important to talk about the the scams and to hear this kind of feedback. what i would also want us to do as a community is to think about what is the back end process of all of this? we have millions of homes being transferred to new owners today. whether on trading desks are are selling nonperforming loans or whether we have bulk sales going on. there's so much activity facing individuals that you touch in your office as well as communities that we serve more

wholistically over the next five years. so one of the conversations whether we have it today or not, it's important to have the other part of the conversation. as we look at -- we established in partnership with tablization trust and mersy housing a facility to buy up nonperforming loans. we felt it's important to have a responsible player to come in and do principle reduction, being able to look at debt and think about how do you keep the homeowner in the home while it's still there? we're playing in the reo space, too. we need people that are responsible players doing the activity so we're using the hardest hit funds in illinois that many states have sitting that haven't been utilized. why not take the money, deploy it, buy nonperforming loans and

try to keep people in the homes and give them the training or counselling to be a productive homeowner. we're doing that in a way where they have equity in their homes. and you can restructure it in that way. at the other end, once we get through and you have property sitting there va kantd. yesterday i was with a responsible player who has been in market for five years. they are vrn concerned, as we are, about the bulge purchases getting bought up by hedge funds and others. there may be good performing assets in 50% to 70% of the homes they buy. what happens to the other 20% or 30% of the homes bought up in bulk purchase. they're sitting in the communities. they'll be disinvested. they'll be resold. we need to think about what is

the next generation of issues that the community is going to face? so let's not forget the back end and coalesce around the solutions. otherwise we'll face the issues again in five years time. >> i'm glad you opened up the conversation there. probably the best solutions aren't waiting for the legal at any rate. for example, one of the recommendations of the home for good campaign is to mandate needuation such that this particular consumer was never in the process of losing their home if they were required to sit with the servicer and had legal representation. they would have had good advice. they would have had to discuss all the options and alternatives. the process would have been very clear to turn the house over to the lender through foreclosure.

but in many cases, as we know, there would have been in fact ways to modify the loans and allow the consumer to maintain the home without ever being desperate and having to start randomly making phone calls to institutions that they had no way of valuing their legitimacy. requiring that the servicers immediate the standards of the program, which is still not done. there's a whole list of recommendations in the home for food campaign brochure. if we follow those. zh just one point. if you lead the proposed standards, it has two obligated touch points to be made by all servicers early in the default

cycle. the first is a mapd tondatory l. then there's a requirement to make an attempt to have contact with the servicer. so the forced intervention, those standards were relatively mirrored in the proposed role. it's to this kinds of provisions that can require everybody to behave the same way in the marketplace. >> so we have time for a few more audience questions. i believe i saw one. thank you. >> yes. i'm with the national association of hispanic real estate professionals. you mentioned mediation and made a reference to principle reduction and also refinancing. there's a lot of talk out there about pushing principle reductions, including chair equity possibilities and massive refinancing at historic low interest rates available today.

what you see the prospect of success for the approaches? >> personally i believe principle reduction thoub done by f should be done by fannie mae and freddie mac. initially the argument is it wasn't cost effective. according to the revised analysis which saved the taxpayers a billion dollars and still isn't done. it needs to be done. there are other things that can be done that we haven't talked about so, for example, bankruptcy protection. this is something the center recommended four or five years ago and estimated 30% of a foreclosure crisis could be dealt with this that way. you can get brupgs protection on

the luxury yacht. but it makes no public policy sense. that needs to be put into place, as dave indicated. more effective standards. that's a real piece. i think you're talking about a proposal recently floated on capitol hill. one of the problems with that is if you see how long it takes to get even a rule written, the idea that you're going to create some new financing structure to buy mortgages probably would be at best in place at 2015, and i think we really can't afford to wait. the flip side of it is i don't think there's a need to wait when we have mediation that could happen immediately. when we have principle reduction that could happen immediately. enforcing the rules of hamp, so the real penalties and real consequences for not following the rules. these things could be done right now. we could mitigate hundreds of thousands of foreclosures, but

we're not doing them. i think the things we should be doing are things we could do right now. >> i would disagree. you heard my view on principle reduction. we've seen cases where it works very, very well. and there have been studies talking about the the cost of foreclosure and why this makes sense from an economic standpoint. don't need to restate that. i would echo the strong comments to say principle reduction is an option that i think we should, as we do -- i guess i do believe that we need to clear the housing stock in a way to get our economy and the recovery going in a stronger direction. so there's no doubt principle reduction could be a really important tool in all of that. >> just a last point. aside shouting out to alejandro,

good job with everything that you do, and the thing i would suggest as it relates to the financing proposal, it does have life to expand the program to provide more access to consumers and par tticipants and probably improve interest rates and speed up the process. that's one advantage. there's some issues with it, but there's opportunities there. and then the bill that proposes refinancing those into fha is very close to the fha short refi program that we rolled out when i was in the administration. so there are things in play, and those could happen quickly if the kinks were worked out of them. as we all know, you have to take it all or nothing. so getting this right to a point where it could move forward is one option. but harp is really working.

it's having an extraordinary influence. it is clearly improving the cash flow of millions of americans, and it streamlines and it is having an impact. and it takes a village of solutions here. >> and so the sponsors of the home for good campaign are offering to bring you each up a card here to sign off, as well as members of the audience. don't forget the channel of the home for good campaign to share the ideas as well. sorry, jim. >> i want to say i was not referring to those proposals. i thought you were referring to one that creates a new trust. i said 2015. i think realistically it would take a couple of years to put something like that into place. in addition to this that, i think it could distract the focus from doing stuff now. that's why i'm saying -- good point, jim. any last burning one, though, because we're sort of at time. if we can keep the questions and

answers. thank you. >> my name is the executive director of the homes on the hill and we're a non-profit housing in columbus, ohio and the network affiliate. my question relates to credit issues. there are a lot of folks who have been damaged during the crisis by foreclosures and they declare bankruptcy. they have high medical bills. are these people are going to be able to access the homeownership market again in such a way that they're not going to be perpetually punished for things that happened to them? we see folks every day in this situation and it may take some real creative type of innovative program, but i'm curious of what your thoughts are and is anything possible for folks like that? >> i'll just go back to something i said earlier which was i think we need to be

looking at credit scores and how they're being used for practically everything these days and really understanding how we can tease out of those damaged scores the damage that's caused to a damage score as a result of an obviously exploitive mortgage product. we have enough evidence now from the legal challenges that were discussed earlier by -- this have been pursued in the department of justice and the 49th state settlement that clearly, was there a lot of illegal behavior happening in the market. and the second thing that goes back to my point about innovative products such as lease purchase. if you're working on a lease purchase the credit score doesn't matter. in terms of ownership because your credit behavior will be determined over the three to five years of being a renter in that property and if you perform well on that, then automatically that loan should be designed to convert to a mortgage. so there are ways to deal with the credit score issue, but i

believe that it is absolutely essential that we do it. >> that always raises the question of having a viable and credible place to live and that also would be part of the concern. >> absolutely. i think there needs to be products also that allows people to rebuild credit history that are very intentionally designed to be credit builder products. there needs to be policies that allows people to excuse certain things like medical, you know, things well beyond someone's control. and i think one of the things that we try to do is think about innovation and products. i think it is a very interesting idea for a certain sort of set of issues. is there a way to think about an innovative product that has some kind of, you know, non-traditional funding that actually allows you to do some demonstration for some specific needs i think might be quite useful.

ourselves up? >> it's not like that's the direction we're going to have a marketplace that looks for these create of ideas and tries to find ways to provide home own areship and stable housing in the sustainable way. >> i think the question is key to a very important dialogue we have to have going forward. i spent the weekend in the southern virginia where the unemployment rate is close to 15%. people have lost their jobs and their credit is being impacted and their ability to get and buy a new home and they've gone through some credit impairment and you talked about medical liens, you can talk about predatory practices and talk about simple job loss. credit impairment is a huge barrier. the two biggest barriers we'll be debating is what should the minimum down payment be and how do we deal with this issue around credit scores and those and being able to isolate periods of bad credit creation

as a result of issues that were of no fault of that family and that now they're sustainable going forward and distinguish between that and someone who took advantage of the markets, speculated and walked away from everything, and we have to find a way to distinguish those because we need behaviors going forward. i think that's a very important debate for us collectively in the housing industry to talk about as we move forward. >> ending on that note and looking forward to the upcoming dean, gives a discussion about calvin coolidge's economic policy and what we can learn

from it. the heritage foundation looks at how budget sequestration will affect the national guard. any discussion about the housing market for the center for american progress. >> tomorrow on "washington journal", the cofounder of no labels talks about his organization's new making the presidency were campaign. that aims to help whoever wins office be a more effective leader. then an examination of for-profit colleges and criticism by lawmakers. steve gunderson, president of the association of private sector colleges and universities will be our guest. later, a discussion on issues facing the self-employed on today's economy. we will hear from the president of the national association for the self-employed. "washington journal" airs live starting at 7:00 a.m. eastern on c-span. >> which is more important?

well, our honor is. it is not dead. it is the kind of nation we are. it is whether we still possess the wit and determination to deal with questions, including economic questions, but certainly not limited to them. all things do not flow from wealth or poverty. i know this firsthand, and so do you. all flow from doing what is right. >> look at what has happened. we have the lowest combined rates of unemployment and inflation and home mortgages in 28 years. >> look at what happened. 10 million new jobs, over half of them highway jobs, 10 million workers, getting the raise they deserve with the minimum wage law. >> c-span has aired every minute

of every major party convention since 1984, now we are on the countdown with this year's convention. you can watch live coverage live on c-span, c-span radio and streamed online at c-span.org, starting on monday, august 27. calvin coolidge was president from 1923 until 1929. a recent conversation at dartmouth college discussed what advice he might offer candidates running for president. we have former vermont governor howard dean is a speaker. this is an hour and a half. >> thank you all for coming. you know, we were going to call this panel what mr. coolidge would tell mr. obama that mr. coolidge was singularly

short on his words, you probably heard the famous story that mr. coolidge, i made this big bet i can make you say three words. and coolidge looked at him and said he will say -- you lose. [laughter] and then he went into this big explanation as to why he was doing what he was doing. and he said not. or he might say my man. i will take just a few minutes to frame this distinguished panel we have. what is really unusual about this panel is some of the best minds in the country, but they are not just experts in the fields, but they have played a role in public policy. so that nobody -- everyone wants

what it takes to make public policy. if you happen to go to work out and coolidge is born, which i would encourage all of you to do, you would find a crowd gathering by the general store in this village surrounded by hills that looks as it did 100 years ago. and visitors and tourists, and they would be gathering at the store that was run by president coolidge's father. after a wild, the vermont national guard, as you know,

calvin coolidge was the only president born on the fourth of july. after a while, the color guard leads this group across the road into the cemetery where they are aligned. aligned with tombstones. unless you saw the bugler play, and it's moving ceremony, i mention not only to give you an idea that this president became president when president harding died. it took him four hours to know that the president died. h his father sworeo him in with a jersey lamp. giveou a just to give you a picture of the times, there was no internet, there was no radio. there were no interstate -- interstates at that point.. calvin coolidge had to send the marines to nicaragua and he had to use a secondhand germanit waf

planes to work during ame. different time. r the tools they had worked with were rudimentary. but the country had come out of a war and had come out of a recession. what i wanted to tell you was te that during the coolidge years, real wages growing w significantly. unemployment peaked at 25% in some cities.wright, it came down to 4%.ow the stockth market was in the tp marginal tax rate, hammer down to 24%. think of the tools that he had h to work with -- no radio, internet, twitter or facebook -- how can anyone work without twitter? let me take you forward now until today. to so we have a situation where the

economy is interconnected. the 7 billion people of the world areinte interconnected.gse we are struggling. e is is a question that thecommg calvin coolidge foundation askse and this is a question that we posted a panel that i'm about to that is just a frame the topic of the panel.

i'm going to introduce professor matthew slaughter is an associate dean and professor of management and also is currently a research associate of a the national bureau of economicn research.ats. a senior fellow at the council of foreign relations, member of the advisory board of the international tax policy forumd and academic adviser at the lloyd center of investments and icmber of the u.s. departmentitl international tax policy forms. he served on the national council ofal economic advisers advisors, affiliated with the, federal reserve from the international monetary fund, the world bank and national academy

of sciences. he received his bachelor's der degree, phi beta kappa permankaa university of notre dame. and his doctorate from the massachusetts institute of technology. governor howard dean currently works as an independent consultant focusing on the areas of healthn care, early childhooe development, alternative energy and the expansion of grassroots politics around the world.rld he is a former dnc chairman, a presidential candidate, he is f powered founder of democracy foo america and also serves on thec board of the national democratic institute where heal focuses on where southeast europe and china europ.

dean created and implemented the 50 state strategy and is credited with helping democrats make historic gains and of course he used the internet in the tools and pioneered a nose. he graduated from yale and a ba in political science and received his medical degree from albert einstein college of medicine in new york city. he cracked this internal medicine and shelter, vermont. mr. roger brinner is partnering chief economist of the parthenon group, global strategy consulting firm headquartered in baltimore, london and bombay. he spun on its expert economists come articulate analyst at the u.s. international economy. he has he has many long-term relationships with corporate clients on issues relating to the strategies, market growth in the pricing equity valuation. dr. brinner extras include

positions at businesses, academic and government institutions. dr. brinner received a ba from kalamazoo college and phd in economics from harvard. and last but not least, professor douglas irwin is the robert e. maxwell professor of arts and sciences and department of economics at dartmouth college. and that economic historian and he will open our panel and a moment. he's the author of trade policy disaster, lessons from the 1930s can't particularly pertinent to the topic today entitling protectionism, the great depression and other books. he's also working on a history of u.s. trade policy from colonial days to the present. as a research associate at the national bureau of economic research, also served on the staff of the president's council of economic advisers and the board of governors of the federal reserve system.

he has a phd in economics with distinction from columbia university. so what we ask these tenement gentleman to do is take a few minutes and give his opening remarks. at 10 of which we may engage in some discussion amongst ourselves or we may open it up to questions from you. so professor irwin, me ask you to start. if you come to the podium, it will make it easier for c-span. [applause] >> well, good afternoon. my role is to set the stage for the panel that will follow and talk a little bit about the economy of the united states the 1920s, presidents coolidge role in the economy during that period and perhaps raise one or two analogies that the economy of the 20s versus what we have today. you might've heard the phrase, the roaring 20s as a description of the economy during the 1920s and actually

that's largely true. it is untrue with respect to one sector come to in a moment. as the introduction ofa, economic growth is really strong during the 1920s. 4% or so. there was a major recession in 1920 and 21 but for the rest of the 1920s and was fairly smooth sailing. also technological change. a lot invented in recent decades really became imprinted on the u.s. market. for example, the number of houses that had electricity rose from 35% in 1922 mike 70% by the end of the decade. the number of cars in the united states returned 6 million in 1919 to 23 million by the end of the decade. newspaper -- radio became widespread in american households and this is thought to be the death of newspapers, something we hear about today.

now, president coolidge presided over this economy, not to say he was possible for it. in fact, he did little to interfere during this period, but there was a few blips in the road. one was a mild recession in 1927 and one of the reasons, not the only, but the one with the henry ford decided to shut down all the ford plans for six months during the one year to retool them to transition from the model t. to the model eight. i was wondering what would have been today a major u.s. corporation or shutting down for six months while we retool? what would be as a comic as she "silent cal." we've already heard one story about "silent cal." my other true story of a "silent cal" was in the white house he was asked once, how you chose pressures of the office like so many people asking for favors, ask you to do this and not. you just can't do it all. how do you cope with all these

demands? said well, i listen. i don't say anything am eventually become so uncomfortable they leave. last month while i've never tried this myself, i've often thought when students coming to ask for a re-create, maybe i should invoke the "silent cal" treatment. i have yet to do so. it went as far as i know unremarked at the white house did produce a little bit of a downturn in the economy. they henry ford was not adequate for steve jobs to this day because he didn't want to do it no model changes. he resisted coming out with the model a pose for us to buy the market. one thing that did happen is people were so excited in anticipation that a million people turned out to get a glimpse of the new model. i don't know whether that's a

half the people turned out to get it clumps of it. when i think about people waiting overnight to get the new ipod, the same thing was happening in the 1920s, owners automobiles of the time. now of course i was not the only stretch for the economy with rabid technological change. the caveat to the 1920s was of the roaring 20s is agriculture. agriculture at the time was 20% of the force was not doing well at all during this period. the story behind agriculture was turned over one demand during record levels and farmers respond to higher prices by buying more farmland, buying more machinery and equipment, investing in firms and expand output as they naturally would. surprisingly, prices to collapse at the end of the war and this kept the going on. he reached. what happened in 1920 and 21, farm prices collapsed by 50% and

they didn't come back. it was a permanent flow. what happened as farmers very much in debt with through the entire decade of the 1920 during the massive foreclosures on property, second mortgages, high rates of indebtedness that they just couldn't deal with it and tremendous political pressure to do something about farmers during this period. some of you may have seen ken burns recent documentary aired here at dartmouth on the dustbowl. as a wonderful documentary that i do quibble with implication left in 20 minutes his films to the 1920s as agree. relative to 1930s. it was not agree. for agriculture. farm tek was very hardheaded. the labor force being hit with hard times i'm summer farm prices edge in combat, what to expect them them to do? asked the federal government for

assistance can exactly what they did. twice in congress during 1920s, congress passed and from supporters for american farmers to target prices back to the prewar level. what do you think "silent cal" thought about this? he would give them the silent treatment because he didn't think government interference was warranted. but of course this is a nonpartisan or bipartisan effort. it was a midwestern republicans, southern democrats represented that wanted us to come of the calvin coolidge twice vetoed the legislation. what is interesting or ironic is that in vetoing the groundwork because the farmers said we had rejected twice, won't get anywhere with resident huger in the 29th and 30, so instead of asking for price, and for his

spirit daily deceit for seeds for what later metastasize 1930 which had a lot had a lot to do a trade wars of the 1930s. so there's perhaps a lesson there up unintended consequences if you don't help at the sector, they're not going to wait. he's going to come back in the form data to support could be detrimental to the economy overall. that is a very brief sketch of what was going on in the 1920s. let me conclude by talking about two perhaps analogies with our current situation. what can we learn from this. the issues coolidge dealt with. the first one is agriculture. as we speak, congress is debating trying to pass a new farm bill which they do every five years. lo and behold we do with the legacy of the 1920s and 1930s because even though the farmer scott the terrace, which they later said repudiated insane to give too much to manufactures and not enough to the farm. and could help exporters as well, what we do with president

roosevelt new deal was priced support and age reproductions, were third of the crop in 1933 was flouted as our notion that we somehow reduced supplies that could increase the price. the problem is not the generalized assertion. dude is overproduction, no evidence for production from past years. price supports of the 1930s was a legacy of today. we are still dealing with and this is what calvin coolidge had to say about price support at the time. government price-fixing when started is no justice in no one. it's an economic fallout from which the country has every right to be spared. in the 1920s and 30s come in the sector was poor relative to the rest of the economy. because they were redistributing from the rich to the poor. but there's a situation today? we are helping out

agribusinesses and redistributing income from the port of the rich. that is one thing i hope congress keeps in mind in terms of the farm bill is who's getting the subsidies? of course ethanol policy is the most egregious example. as governor dean can attest, most presidential candidates had to go to iowa. i'm what you have to say? faced with farmers i support the ethanol program even though it doesn't make economic sense, environmental sense, doesn't make agricultural sense. $6 billion tax subsidy to refiners and blenders. we have massive tariffs on imported sugar ethanol, which is much more environmentally friendly coming from brazil. this corn farmers in dealing with that legacy. where's the other point which made, no and appeared it would be an end to subsidies. but congress is now instituting is not direct payments for

farmers, the crop insurance. if you know any other commodity prices, they've been a high levels. what this means is if those prices fall as they probably will at some point, guess who is on the hook? everyone in this room and everyone watching this broadcast. so no justice, no end. coolidge was present in predicting not. second point, just as in the 1920s, we have some economy and society to his difficulties for structural change. here are things easier in the 1920 sickest most structural change between agriculture and shrinking the culture of moving labor into the manufacturing sector and services sector. coolidge had it easier because the economist karen rapidly. much easier to transition from one sector to another when creating jobs and you can facilitate the transition as difficult as it may be.

were faces today is another transition, not from agriculture and services. the sector is small in terms of employment, as is the manufacturing sector. that is good news because that comes out because of privacy sectors. we produce more manufactured goods than we ever have before. we produce more farm goods. we just don't need people to do it because we advanced to launch a time intensive methods. consider structural changes within the structure to more certain jobs are obsolete because of new technologies, weatherby bank tellers because of atm machines, or readers because of kiosks that will soon appear because of tables for your order by tapping the screen, rather than telling a person what to get for you. not making this transition will be very difficult one with a stagnant economy that's not creating jobs. so i think the challenge for current and next president is much more difficult than the one

by calvin coolidge in the 1920s. on that rather somber note, alternate over to the next panelist. [applause] >> that was pretty somber. i also did a little research about president coolidge and he's identified with small government conservative. he backed that up by keeping federal spending fairly flat. now, our next president is likely to reside where the federal databases by 40%. that is even with some action taken that congress is currently envisioning. we're in a path that everyone but washington does is unsustainable and we don't seem to find a bipartisan middle that can tackle it. we have commission after commission that's bipartisan, that comes out of sensible recommendations have been against torpedoed by both

parties. part of the reason why we can't have any bipartisan agreement i think is fair at dean in washington on the basis and it does rather than facts. there are things they believed they just simply aren't true. i have two daughters, both of the science background, once a pediatrician was a phd organic chemists. and they told me the internet first became popular that if you searched for roger brinner, but you found us a quote, plural and anecdote is not big on. last night i set that up to cut sometime in the early 80s, just made it up and that scientists use to bash one another when their presentation actually isn't exactly. so let me bash some populist myths that are not based on fact. one theme of this election coming up this certainly class warfare. in the end of the american dream.

there is this feeling -- the assertion that middle-class incomes are shrinking and that this middle class is doing far worse than it has in the past. precious absolute falsehood. not a shred of evidence from many statistical agency in washington. they just make it up in the media and the politicians read the media and follow it. another myth is that the tax legislation reagan, clinton and bush benefited the rich and the expense of the middle class in the lowest income groups. nothing could be further from the truth and i'll share with you facts are not. first of all, let's talk about this poor middle class. it turns out that their incomes if you look at the u.s. divided from top to bottom, turns out the groove three from business

cycle peak to business cycle over the last 40 years has been almost identical. 1.5% per year compounded annual growth year after year, decade after decade, no deviation maker of the citizen power, republicans, democrats, would we are talking about would translate into higher pay, higher income and the middle class is doing just fine. those numbers i cited are for the second, third and fourth of the five quintiles. what about the bottom? they do have the lowest growth, but it's still positive. and the growth over the last business cycle is about the same as the previous. they only had incomes rise by about half% a year. and the top portrayal or quintile as always is rising at about 4% a year. so the gap is getting bigger. the pie is being displaced in

similar proportions and the pie is growing. this notion i've heard the president talk about 50 issue today is not about growth, but about redistribution. it is clearly based on this false premise that the middle class is suffering and the rich are the beneficiaries. part of that of course is a story about personal income taxation. it turns out if you do look at the bush and reagan tax cuts with some changes in the middle by president clinton, what you find is the bottom to quintiles of the population, that people with the lowest 40% of taxable income actually remove from the taxpayers to net recipients of the earned income tax credit, both quintiles, not just in total, both the bottom and second from the bottom quintile

went from being taxpayers to check recipients. returns are filed, they get a check back a notch in the government. but about the middle class? actually had its tax burden cut by 40% to 50%. what about the top to quintiles? or tax burdens were almost unchanged in total. what was done first by a bacon and then amplified by bush was to create this very large zero bracket because taxable income to get it to a certain level and then a smart piece of bipartisan policy, instead of raising the minimum wage, they created an earned income tax credit, which says the market isn't really working to generate a living wage at the bottom end. rather than raising the minimum wage and forcing people out of work because of create automated

teller machines and parking lots in new dispenser of soda at a convenience store with a fast food restaurant, both are going to do is say the government, if you're working hard enough and you're trying because you've got the wage, we will match part of that. that's it the earned income tax credit is. smart bipartisan legislation, but that is the reduced and taken it so that now and 2010, 45% speed zero federal income tax actually cut a check back here before the break in years his 19. at the end of the reagan years who is 25%. at what the bush tax cuts, which expended vast, it went up to 40%. so, it would be useful within these debates in washington there is actually a fact, just now and then. i look at the ibm can see the

shocked looks, like how could i've been told so many lies for so many years by reputable newspapers? .. they didn't come to one another's aid on a proud basis. they are in recession and it is impacting us. so when i talk about the need for a move to budget balance, what i have in mind are gradual adjustments coupled with

long-term fixes and entitlements. we are going to have to realize that the current promises we make and the cap. the vice chairman of the concord coalition started by two senators, tsongas and rugman, different parties. they said during the reagan years, this doesn't make sense. we have got to do something about it. finally during the '90s we got to surpluses again so i am and anti-deficit hawk, but i am a -- and by the way the coalition has its membership highly concentrated in what age group? senior citizens. why? we are saying cut social security, fix medicare, do things like that. the senior citizens say, my grandchildren's standard of

living is at risk and less we do -- it's the only responsible addresso do so we do need to >> they are 5% headed at 8% of our total national income. we need incentives put incool's place i got a quote reform legislation period that saidquon business must stand on an independent basis because gvernm government control cannot be fro divorced from political control.y we and he said we shouldd regu modernize and reduce costs rather than regulating the.

that sounds like health care. i will post some charts soit's t you can see but look at the national health spending it goes up. som every three or five for 10 get years the federal governmentero, decides to get more generous. and guess what? we ain't stupid.o take we will take another pillor and let's do the five test. that sa things better not reallyeces necessary. we need to bend the costwe curve be smart of our tools

and those are the kind of things they may have thought about it today's environment. thank you very much. gepplause]ll, thanyou ro it.ther >> he left us a lot into disagree. [laughter]ouple of but i do want to say astart couple of things. it is interesting at was in introduced as the secondhe stake longest governor in vermont. that people say it is in the history. but i served 12 yearsthe tate

vermont was an independentw h republic for 14 years.yed twic we seceded and brought not allowed to join as a state intel's 7091. new york claimed half of the san hampshire the other. we could not agree on our capital we plotted their twice think you they would stop trying to get our land. but the governor for a lot during of time during the republic served 171 year terms.e of just a piece of history when i was called i felt theidge b passion to defend calvin coolidge.

his home town is beautiful. he e is not hard and to defend from the progressive democratic point* of view. it is true she was in favor .llustrioee market but he left his political career as a straightforwarddece. person he is known for plice breaking the of boston police strike.anr tr reagan actually quoted him what i in 1981 with the air traffic control union.ndustry. but he said we must humanize the industry or it will breakdown. down. legisl he was also asked to lead a iref

committee to the the bread and roses strike that is a champion of the committee was a significant wage increase for the workers. he was extremely for civil-rights includingic a african-americans who were am persecuted at that time.k was vn at that time the kkk was harry powerful.gned as we think it could clucks clan was formed to persecute african-americans it was first in that midwest formericad catholics and jews then half the americans.the unit people were afraid to cont contradictra them and had no problem with the rights ofue ath

minorities. in 1924 to give american indians who citizenship rights. given our history that was a major step forward. also a big supporter of women's suffrage.utwho ee was vivacious and th outgoing and the life of thet sa party i suspect she had a think fair amount to do with that.t, m how many are residents from vermont? about half?nt. people don't understand muchabo we do not have a democratic governor over 100 years. eccons 100 dieing consecutivet years.with

we have not changed we are libertarian with a strong feeling. you have to live there even today were people argue three hours at a town meeting. we used to making our own decisions andci al sous used to doing things for ourselves together. that is what made it calvinythig coolidge.y todato our if he had anything to say i get think he bush say hong it with the program but people will call you a demagogue

worthy ideologue they

butchered grant for each hiece of land. t list they would double lot.nial that is how things went in when colonial america.arted to bin to one of legislature began to exercise their claim, heo would send his buddies up to spe montreal to goad drinking. that was british territory.onarr everybody understood the and bae tactics was to split off newclai

england from the valley. when word got back at the drinking buddies were in montreal the wind to say it knockoff the nonsense if they made a deal with the they annadians and they were in big trouble. he carefully maneuvereds these important states to either side of us.so they d so they would give up their claim amid greater interest a of unin ty for the unitedng to states. we d but to look at washington to the eyes of a very determined people.

this we have to kick this off but i do disagree with roger. to not let the facts get in a way of a good story but buffett secretaryhan pays a higher percentage thcause payroll taxes do not go down if you put payrolll taxes into that into theuation,n equation people still pay a. higher percentage of their income. terest i took a bunch of these notes what i do agree is a good way for redistributionree i

started by ed died today wasn the business democrats. i do agree with the notion that i am tata, the deficit and you will remember when my friend across the riverrmicko was once quoted why do we need republican governor? we have got dean. [laughter] that was before the i was scream speech. [laughter] >> i do think we should go over the fiscal cliffs.shingtonb there is no chance we will go back to the tax rate of he bto t clinton and we need to. se also the defense budget

rters to be cut.ua they're both the things that are painful for us on the progressive side according to the cbo and we will see the 1.3% decline and then an increase.reit's a ver it is a tough price but it these guys are out to lunch. th we cannot go one with these w deficitse. that was a long time ago the anore t regime has gotten worse. i' as a liberal democrat all ofe

fo those schools changes is because we had a stable budget. when we cut taxes and cut expenses end laid the framework you can do that if youf don't care. o u have h to have a base ofseet fiscal responsibility. i think th that is important and iink anytn don't think anything wille get done. i don't blame the democrats. caere will not continue withk y social security and medicare. do it you will do it byign significant tax increases.do it sstill don't think you willal

getec bipartisan agreement. that will not me cut with the 435 congressional districts it is a lot of jobs but it is not just medicare and social security.mme fell last saying is this. if you could only make one ma on change to control costs the allh biggest driver of all healthwher care is if you continue to have a fee-for-service costs system you'll never get health care. the market forces help to drive up because we get rewarded the more expensive

and more often. doctors are and -- are not any more crooked the lawyers are teachers but the 80 it is to spend more money. they need to be paid by the patient not the procedure. it has happenenid on the eve of because mitt romneyioneeredba pioneered obamneycare and lin five years down the line they are doing interesting things once you gethospital th s integrated care, verticallyrticy eight integrated and actuarial strengththe you now have a mechanism to pay hospitals by their patients not by

procedures. the entire system changes to reward them for well this the only way to bring health care costs under control. thank you. [applause]of see. >> i could listen to my three panelist. to i want to share and is a key to the coolidge foundationinv to participate.ent i learned more of that economic perspective and try to connect that with where we are today. eriod the twenties was a roaring period so today we have

23 billion under a and not employed americans them private-sector jobs is a little over 111 million this same amount as 12 years ago. we have had no net growth but the labor force has grown by 15 million. we're seeing in the wake of a dramatic financial crisis and we do that to while we -- al look dover the of it to ha cushion to see what is happening and spain, portugal, and port increaseug. little -- priests. b whe we a soto reflective where we are can magi today if we could magically bring him to reverse what challenges to the estates

face of one word is humility. with the political economy. the labels change and dean and others have said where we place president coolidge in what party isch undeclared given the parties of the country. democts, it it is for independence in democrats and republicans at the federal and state and local bubble.ote. gwill explain this with ain eae quote early 1925 he gave ofresss speech to the u.s. press and association the second of half of which it is probable

pepros to remain in touch with the currents of the "business nation" is more viable than if it was a stranger. after all the chief business of the american people is business. or from a connected was selling and prospering in the world. that last section want to unbundle. coming from a backgroundhest ss if anythingb to do with business. he went to elmhurst or hewas studied philosophy and went to economics then went into theaw practice of law. someone w he is not someone who spent direct a great deal of time in thei private sector. of the americ the chief business is veryabt hs profound for they humility

he brought to his office. think of humility of what drives economic growth and the damage it continues to create with no sustainable job growth. what was happening with the real economy withnologicachangea technological change work wor to? we did not have twitter and the internet but things like electricity, automobiles the coming more viable. growth households this 20s as astonishing wayn the productive period.about.

you cannot find any quotes the president to allege laying claim to that innovation and economic activity. the indicators were good. the other is a round but it was becoming a problem.re for the overall economy thanks to innovation part of the reason the tax cuts ma durih could be made it is easy to do that with attacks revenues.ne if yolook a look at the late 1990's partparf that had to do withand repuans republicans as well readits in

same margin no tax rates but an awful lot had to do with the surge of productivity with growth and income. number of computer, the first at the impressive buts them pleasantly and expectunexpe should've vertical growth tax revenues soared. in an. >> but i hear politiciansay that lay claim to economic activity that have been stirrings there period it often is. is h how do you sustain economicsome growth?d,

as sage try to unbundle someng things to do with support for research and education but a lot to do with the incentives of them private sector much printers and large businesses.as and has a new the increaseg seen global economy thinking and about where they want to peopl hire people is in the brickcauso countries because they have the few billion people and we're kidding ourselves if daind we have the ordained right to. us humility is one theme of economic growth.a

second is a little more speculative that came shortly after the reign of president coolidge. he said the american people are profoundly connected buying, selling, prospering in the world. one dimension is what k acid but the stocmarket, during this period there u.s. stock market, rose to medically he left office on the cusp and later came black monday and the crash co and that contributed to theve co financial calamity. the had financial crisis forf

a century and probably will continue when we think about i think if this warrant to today. not the middle of sound but it starts from a couple ofathi places that don't think is accurate. individuals they are in all industries. name the industry.and t i can find it.h a lot of people think ofs. tform of the capital markets all crisis can be done away with if they are smart enough and efficient enough. i don't know if he bloodedalizel