political parties in algeria matter. you know, if we assume hypothetically that political parties don't matter -- and personally, i don't think they do -- and that they're largely for show, it's cinema, it's theater, um, and we also assume that key political decisions are taken by a group of elites spanning commerce, military and politics and we assume that political leaders arise from outside the system, then it's possible that some of the political decision makers who have backed the elite's interests in the past at the expense of a long-term vision for the country could return to the political milieu of after the president's gone in 2014. in the past decision makers in algeria have been shown a profoundly ideological, nationalist, statist, protectionist and isolationist tendency. essentially, what the past leaders created was algeria for

algerians, but even then it was only for a certain class of algerians, the oligarchs that dr. roberts referred to. if these political leaders return whether it's men fleece in the future, you know, it is a strong possibility that algeria's going to once become a fiefdom. it'll become their fiefdom and algeria will fall back into the sluggish pace of recent years. i don't think there's going to be a rebellion. i think algerians would focus on surviving in the informal economy, but algeria will effectively return to the it is status quo. it'll be this big, glaring absence in north africa. the largest country in africa disengages from the international community, solutions to the instability that dr. zoubir mentioned, solutions to the instability in sir car or northern -- syria or northern mali. what would make this all the

more glaring is if our worst fears about libya were to come to pass. as i mentioned before, the libyan government is very much committed to the road map they've laid out, they're very committed to the political process, but i'd like to bring you back to the middle of 2011. at the time, gadhafi's head of external security defected. and when he defected, he warned that libya would become like somalia. and at the time i think most frames of references were to mogadishu, to a black hawk down moment. and, unfortunately, we have had a black hawk down moment in benghazi. but i think he's, you know, a are nuanced guy. and what i think he was referring to was a much broader frame of reference. how would libya look like somalia. not just a black hawk down incident, not just a benghazi incident, but other dimensions as well. and i think what he meant was probably this: that militia leaders are going to transition into warlords, that some parts

of the country are going to fall to islamists akin to somalia, that other parts of the country will be relatively manageable like puntland or somaliland, but they're going to be hamstrung by their lack of sovereignty. oil revenue will be divvied up by the regions that produce it, but it will be deprived -- those parts of the country that don't produce it will be deprived of a historical fiscal and financial resource. the u.s. would be forced to try to support tripoli's attempts to assert central north other the entirety of the state, but i think the u.s. would find itself -- its libyan interlocutors unwilling or unable to help the u.s. or to advance u.s. agendas. and at the same time you could have a hulking, inintroverted, disinterested, disengaged algeria right next door. and this would be a very negative she their yore for the entirety of north africa. but i'm perpetually the optimist, and i don't like the chick l little role. i think there are a lot of chicken littles here in d.c.,

and the sky's always falling. so what if in the happy circumstance none of these scenarios come to pass. where does the u.s. fit in? i think there's a real potential for the u.s. to build new relationships with algeria. it's going to have to be predicated on algeria being in the driver's seat. algeria will never be anybody's proxy. algeria has enormous potential that i think the u.s. can help it realize both domestically and economically. if algeria manages the political position in 2014, i think it may have its moment in the sun, the one it's been looking for since 1962. in libya the u.s. has to remain engaged, no question. in addition to all the political problems in libya, there are logistical and pragmatic ones, and the libyans need u.s. support in solving them. the libyans don't have the administrative bandwidth to deal with the challenges they are facing on a day-to-day basis, and they don't have the technical capacity to address serious shortcomings trout the

country. with sustained support, i think libya could stay on a positive path. without u.s. support, the negative scenario, i think, might become a real possibility. thanks very much. [applause] >> thank you, geoff. bill. you're up. >> good morning. an all-star lineup, i think i'm the right fielder. i'll do my best. i'm a bit discombobulated. there's a verb in arabic which means to arrive in a foreign country without your luggage, well, that happened to me, so i had to walk down the street and get clothes. but i'm here, and i survived, and i'm going to try to round out the discussion with some further points.

i think given what's been said this morning, we've heard a lot more about continuity than change, and and i'm going to talk about what's changed. in the context of the arab spring. and i'm going to talk a little bit more about libya because i think that was one of the missing pieces this morn, and that's the country i've probably spent the most time focused on. the two biggest changes, and they're related to each other, that came with the arab spring were -- and this is in terms of the actual movement spawned by the arab spring -- were what i call old order/new order dynamics. there are new ideologies of change coming from youth which are radical and are having profound impact on every aspect of life in this part of the world. um, unlike some of the tropes and continuities we've been

looking at, they're anti-tribal, they're anti-patriarchy, in the case of morocco, anti-ma husband mean, anti-corruption, pro-transparency, inspired by things like wikileaks which as a former state person i'm still upset about, but we can't deny it had a huge impact on the region. and then the other sort of major change in terms of the movements of the arab spring, um, is the hybriddic nature of these contest story movements and the major hybrid, i think, is the secular islamist divide. there's this show that at least in the countries -- there's a con testation between the sort of islam is and secularists at a certain level of society, and then there's a rejection of that at the lower level of society, and we saw it at the february 20th alliance. we've seen it in all the countries. we saw it in algeria in the

'90s where it began. there's a strong desire among young people not to have this secular islamist debate, and most social contestation these days is actually, probably -- just to pull a number out of the hat -- 90% in tunisia is economic and social related, and 10% is modern islamist related, but to read the international press, you'd think it was the exact opposite. um, now on -- just briefly since i have from a national crisis group, a quick recap. eighteen countries were shaken by the arab spring in ways that any other year or two would be front page news, but a lot of the stories were kind of drowned out in the cacophony of the change. it's also been very, very bloody, and i think that plays into the narrative you heard this morning of why there was

relate since in -- reticence in algerian -- [inaudible] for those keeping score, you know, i heard a long time about how international intervention in syria had to be avoided and that the libya model was a disaster, but for those keeping score, syria's just passed libya in terms of a consensus figure on death. we're over 28,000 now, and it sort of, for me, reputes in relief the trauma of nonintervention of the o international community. um, and then the other sort of cross-cutting thing i wanted to point out before i get to specific countries is the whole self-imno la story trend which i think is pretty significant. hernando desoto's done incredible work on this and interviewed all the families of the self-imno laters across the region. i think we had 37 in the first

53 days, and 170 across the region. more in algeria than elsewhere. almost all of the self-imlaters were economic actors, underscoring what we heard about the importance of the social and economic issues to what's going on. and i'll get back to informal economic sector in a minute. now on to libya. um, contrary to popular misperception, libya had its arab spring. libya isn't that different from the other north african countries. the east fell in a way quite similar to egypt and tunisia. tripoli fell, 80% of it in 24 hours and took nine days to finish the job there, and the west was liberated in a way that was much more complicated than the fuse would have us believe -- than the news would have us believe. of it was between tease newly-formed armed groups, there

was actually more negotiating than firing going on. and you can read about it in our september 14th crisis group report about how, how the deal making was made. because the new libya's very much about these deals at the local level. um, the -- and one way that i find libya's very different, and it was touched on this morning s that libya has kind of an anti-islamist thing going on. ya brill's party did get 39 of the 80 seats, his group, and 18 went to the muslim brothers, and t backlash in benghazi and other things, basically, every young person i met in libya voted for ya breel. so there's a very different die namic. libya's the only country where positive views of america are higher than negative views. it's most comparable to iran in terms of views of the united states. so there's a very different dynamic on the world vis-a-vis western intervention, vis-a-vis

islamism notwithstanding what we're seeing in the news. and i that thought the uprising in benghazi was hugely important to think about when 30,000 people rose up a couple of weekends ago to throw out islamist militias. the population once again taking control of a situation where a dysfunctional government wasn't able to. and i found the intervention very interesting because in many ways i think the main bogeyman was the fear of what the 30,000 would do if things got much worse, which brings up another thing that i should have said in the introductory remarks, that the arab spring -- the dynamic we view it is people against regimes, but just as important in the arab spring is regimes against regimes and people against people, and i'm happy to talk about those dynamics in the q&a, but it's not just people against regimes. following benghazi, a well known libyan academic said something which stuck with me, he said

libyans have no idea where they're going, but they're going to get there faster than everyone else x. in a funny way that's libya right now because there's a huge consensus about moving forward. there's a kind of civilian activism which is even superior to egypt and tunisia and certainly no morocco and algeri. the thing that most concerns me right now and doesn't concern the libyans was the attack on the shrines. there have been 40 attacks in libya and hundreds across the country, and most libyans dismiss the this as, you know, buildings being attacked, you know, big deal. nobody died. um, but it's much more significant because the salafis are starting there, and they are unearthing 400-year-old graves and smashing quranic verses and just gutting these places, and in one place a madrassa i

visited, he had fled for his life. then they attacked a greek orthodox priest, so they're starting to attack christians. so the thing that most concerned me was not the fact b that this was going on, but the fact that most libyans didn't care about the attacks on the shrines, and i find that kind of problematic. when you start looking at what's actually going on there, this is the first part of a worse trend that is probably going to lead to some bloodshed. on the positive side, libya has responding to some of the things said earlier today better, more resources than other countries and a very well-educated population system, although the libyan education system lacks in many ways as we know. but libya, their scenarios -- and i'm happy to talk about it in the q&a -- where libya comes out better than tunisia and egypt because it has those

special, special types of resources that could come together to avoid a somalia-like situation. um, just quickly on tunisia, um, and i apologize to those who have heard me speak on this before, i saw the tunisia arab spring as kind of two, split in two to oversimplify. but there was a rural, male, older, more working class, more up employed, angrier arab spring based a lot on the algerian protest which has been sort of roiling since 2005, and there was an urban, both gender, younger, more middle and upper class, more socially networked, more employed, more hopeful, more human rights-oriented arab spring which kind of pushed the revolution over the top. and that's that secondary wrap spring in tunisia revolution that worked because of that. but the first one hasn't been accomplished, and i think the main source of instability in tuni that firs arab spring that didn't, that didn't succeed. um, we did a crisis group at

justice and security report that came out last may, and our main concern there was an overwhelmed justice system in disarray, and i believe everything that was said this morning about the importance of transitional justice, but i'm even more concerned about the demoralization of the police force, and that played out in the recent rape case, and there's some very serious problems particularly in libya and tunisia, but i'm talking about tunisia now with the police that need to be addressed. but the most important thing that needed to be addressed in all these countries is the economics. as we've been hearing this morning, um, in my opinion notwithstanding the fact that economic success does depend on political success, but let's talk about economics for a minute because i don't think it's been understood. tunisia had an economic miracle. remember all the reports? through 2011 tunisia was the most diverse, fastest growing, best performing arab economy. so what did we get wrong there? a lot of people said the books

were cooked in tunisia, they were cooked a little bit, but that wasn't the main thing that was going on. the three main things in my mind that failed in tunisia was the issue of the -- [inaudible] the university graduates who weren't getting deployed because it tipped the balance in the revolution, the urban one i was talking about, and the problem all across the region, it's not just all youth, it's the university graduates who are organized and pressing the state. that's failure of the distributive state and the solution, in part, has to come from the distributive state as we were hearing this morning during the economic panel. the rural rebellion, though, comes from from a failure of free markets to create jobs in rural areas, notwithstanding these mining areas in tunisia, morocco and elsewhere. but basically, the free market cannot create rural jobs, and i don't know what the solution is. it's not going to be in agriculture. but we need to sort of realize that this very high unemployment in the rural areas all these

countries, including tunisia, and that needs to be addressed. and then as i said this morning, i completely agree that corruption was the most important thing. i won't belabor the point, but just to pound out a factoid that ben ali and try bell si families had their hands in 180 of the top 200 tunisian firms. our main concern going forward is that there's a transfer of ownership or control of these monopolistic business interests to even more insaw lube rouse -- sliewb rouse characters, and that's going to have to be addressed going forward. but, so i'd say the number one ways to address these instabilities are economics first, security second, justice third. not gonna dwell on algeria except to quickly point out, as i said before, that the, um, the language of protests among youth is largely made in algeria, and

it's part of this whole sort of roiling youth rebellion that's been going on for 20 years. and until algeria stops having those sort of spillover effects to the region, we're not going to get progress in the region either. um, i have very little time left. just quickly on morocco, the february 20th movement which we didn't talk much about this morning reached last spring 800,000 protesting and 70 -- the previous spring, 2011, 70 cities and towns. they're not completely gone. they've been written off by the international media, but 70 of their activists and leaders are currently in some form of detention. they have regular protests in the hundreds, sometimes in the thousands. the bigger protests in morocco are in the labor movement, there was a recent dispute in the last few day, stuff on youtube you can see online. but my main concern about morocco is that it becomes more like algeria in terms of this

sort of constant, hyperlocallized instability. you saw it in taza, all these towns in morocco. every week there seems to be another town exploding, and these are local, social and economic issues that aren't being addressed and, um, and this sort of feeds into this highly alienated youth. um, i'm not going to -- i met with -- [inaudible] for two-and-a-half hours a week or two ago, and the pgd's trying to address this issue in various ways, but i don't think they've gotten into the fitty gritty of how to reform the private sector. there's a lot more that could be done in that area, but let me point out something important, i think, that came up this morning. pjd won landslide victories with very few votes. pjd got 1.2 million votes in a

country of 33 million people and won in a landslide. in many districts of morocco, spoilage of ballots was the second winner. so there's pjd, spoilage and then another, and another party. so you still have highly alienated and disconnected young people for the most part who are willing to register to vote, go to vote and then do something unorthodox to their ballots which reveals what i'm mostly focused on here which is sort of youth disconnectment although i entirely agree with what mr. terrab said about the importance of seeing youth as an opportunity and not just as a negative thing. um, finally, in a revolutionary moment the most important thing is entrepreneurship and innovation. but not just in the narrow sme economic sense, although that's really important, but it needs to be in every single sector of life in this part of the world.

i gave a speech in tunisia a year ago -- [speaking in native tongue] conference, and we were talking about reforms in the education system, and i remember saying we have to shake up the universities from education, and then we have to shake up, release the professors from the control of the university administrations and let them innovate, and all the professors were happy, and then we said we've got to release the best students from the control of the professors. and there's some interesting examples of universities across the region, university in cairo being one, morocco, tunisia, there are huge possibilities. okay, opportunity, there's a massive amount of highly-educated youth who want to solve problems. it's not necessarily about these macroeconomic things although those are hugely important, it's about putting youth to work probably organized around university campuses to solving the whole range of social and economic issues. can be done, it's not that

expensive to do, and it involves kind of throwing out the old ideas about how institutions need to be organized to address social problems and kind of redesigning from the ground up. thank you. [applause] >> thank you, bill. that was very concise for you. [laughter] so thank you. thank you for staying within your half hour. [laughter] no, that was great, thank you. i heard sort of a couple of themes when we talked about morocco and algeria today that demands are for not for revolutionary change, but for incremental reform and incremental change. and i'm wondering how governments today, old governments or existing governments, new governments are managing popular expectations of people that things can change quickly enough or in a substantive way fast enough. and so i guess the question that i'll ask the panel, and i'd request that you answer them,

answer the question very briefly, is what will it take to trigger or reignite more widespread protests in a place like algeria or morocco or even tunisia now? what kind of, what kind of triggers could ignite more demands for quicker change for more substantive change in some of these countries? yahia, would you like to start? >> regarding algeria, my quick response is what the new government is trying to do, that is to do away with the informal sector which employs thousands and thousands of people. and there are -- the object i have is -- objective is to have it eradicated by next ramadan, in other words, by july next year. that could trigger, i think, if there is no substitute for that a, then we are up for big, big, big trouble in algeria. and, again, for tunisia it's probably the same problem. not regarding the informal

sector, but the economy in general. if it continues like this, i think we are also up for trouble, and it applies to the other two countries as well. >> i'm going to jump out of order, and if geoff wants to speak, he's going to have to wait until i go on too long again. but i totally agree with what yahia just said. i mean, the major source of employment and place where people work is not -- the private sector which needs to perform better, the it's not the traditional private sector, it's not the public sector which needs to perform better, it's second smes and first informal sector jobs. and until these governments stop seeing informal sector as the enemy and start actually turning the informal sector into a source of tax revenue for macroeconomic stability, but more importantly job, sustainable jobs, you're going to have terrible, um, terrible

economic situation if all these countries. and in tunisia we're seeing the exact opposite, a clampdown on the informal sector as opposed to turning it into an engine of growth. i think the correct term is outrage. you talk to young people, it's all about humiliation and, you know, and if people get outraged enough about whatever the thing is, removal of subsidies was mentioned this morning, that's that's what gets people out. you do have these cecks in morocco and algeria which don't exist to the same degree in libya and tunisia in terms of restraint both by the population that doesn't want revolutionary change and by the police which doesn't want to provoke revolutionary change. police forces have gotten a lot better in morocco and algeria, although they've been using a heavier hand in morocco in a bad way.

but whatever black swan outrages the population collectively enough is what causes these moments of turbulence and turmoil. >> um, yeah, i agree with dr. zoubir and dr. lawrence, so i'm not going to belabor it. but i think it is important to, um, that when we talk about, you know, potential drivers for change or catalysts for change or -- we have to assign, you know, a certain like likelihood or probability to them. you know, otherwise we could envision all sorts of implausible scenarios that could bring about dramatic change. you know, so while i agree with yahia and bill about the possibility of a crackdown on the informal sector or in algeria or, you know, the possibility of some large scale corruption case, um, indicting

the -- [inaudible] in morocco, serving as a catalyst for widespread protests and demand for political change, you know, i think these are relatively low likelihood scenarios. i mean, i think, you know, we've talked about quite a bit this morning the algerians, as dr. roberts said, are the master planners. they've built a system which is, perhaps, better than they had even intended. morocco, likewise, as was mentioned this morning, you know, it's also built a malleable system. which is designed in the such a way as to mitigate against the likelihood of these, you know, catalytic moments occurring. >> i'll open the floor up to questions. yes, i have one over here. >> hi. i'm isabelle, i'm a research intern with the middle east institute. um, i was just wondering if --

>> [inaudible] >> yeah, it's on. um, if one of the greatest challenges in moving through these transitions towards stable states is curbing, um, curbing military power and centralizing the legitimate use of force, i was wondering if any of you foresee feasible scenarios in which stability is achieved without a centralized, um, military force or power. and if so, what sort of implications that might have for regional security. >> well, the tunisian military performed amazingly in the jasmine spring by not the civilian-led military, you know, by not playing the role the ben ali regime wanted them to play. so i don't really see military in tunisia as a major issue. in libya there was no ministry of defense under gadhafi, and we don't even have a minister of

defense in the newly-reformed, so curbing military power in the narrow sense of an army isn't the main issue in tunisia either, and i actually think -- excuse me, libya -- and i actually think that probably, you know, 95% of the 250,000 or so libyans walking around with weapons are trying to keep the peace, not make mischief. ..

and the security forces and in defense of the regime that is where the action is, not in the military. you're the geopolitics guy. >> i thought the worst-case scenario for the algerian military is instability in northern mali. and you know what is going on in the eastern front with libya. i know that some troops had to be redeployed in the eastern front because of the, the traffic of armaments and drugs and other issues. this is the worst case so. >> i just want to take the opportunity to answer a question that hasn't been asked.

but, this is something that i was thinking about. it's slightly related to your question but it's something that dr. roberts mentioned this morning. he talked about, you know, the possibility for a triple transition in algeria where the chief of staff are all, indisposed or die in either together or in short succession. you know and one of the things that i think is important to understand is that he has largely professionalized military. pushed it out of the halls of the presidential palace. now there does leave the dos but, you know, this debate about what's going to happen after buotska.

it is no secret that he is old. everybody knows it and everybody had these discussions how is the transition going to work and, i suspect while there is the potential for instability surrounding a triple transition, at the same time i think it would be misguided to think that the individual actors within these groups haven't been putting in place their own plans for a transition. you know, i don't think anybody in the algerian leadership wants to see instability. what you do see is, whether it's amongst the oligarchs you do see compromise. my more optimistic view the military has you can walk -- walked back from the halls of the presidential palace and even if we have this triple scare scenario it will not lead to instability.

>> i would ask the panel for your assessment as to the refugees as the security factor, for example, the, cams -- >> missed that one word? what is the security factor? refugee? >> can you hear me, in algeria and beyond, as we know from the historical record that refugee camps they constitute a source for recruitment and instability throughout the world. so specifically in regard to the magreb how do you see the situation now? is it the same continuity that we're going to see

frozen situation regarding the solution of the refugees in the area? >> say something outside as jeff did and answer the question. three other stressors when we're talking about instability in the region in addition to refugees. it was mentioned this morning but flesh it out a little further. euro crisis, energy crisis and food crisis. the euro crisis has affected tourism receipts which was not mentioned. they're down some 40%. that is quite profound. the economic impact of europe. the countries are surviving, well, algeria and libya surviving on oil receipts. morocco and tunisia surviving in parts due to moves of their governments smart through the banking sector and elsewhere support

of international financial institutions they're getting which has to remain or you could have serious problems there. energy prices are high. that is major destablizer. moroccan budget is calculated on $100 a barrel. at 114 that is couple hundred million per year of budgetary, so we have algeria, libya, benefiting from high oil prices. tunisia, morocco very seriously impacted by high oil prices. i'm last person to say food riots. there are almost never food riots. january 2011 was called a food riot in algeria and it wasn't but with the huge world crisis in food hitting us now, russia, american and we're talking about the potential of food riots in this part of the world and in the coming future. to refugees, mali is throwing off 200,000 in all directions. we didn't talk about

mauritania although it is a maghreb country. although has detablizing impact on mauritania. around algeria and mali you have big refugees. i would mix with that the constant flow of migrants from africa north and all the trafficking that goes with it. the numbers in morocco, numbers of people coming through, seeking refugee status, seeking to get to europe. they're hiding in the forests and they're sent back to the algerian border. just country by country, region by region you have flows of population as significant and as destablizing a as the refugee flows. we have got really significant problems and all of the sort, this is the bad side of it from economics. i talk about economic engine in this case all this black economy is mixed in with these people flows and the results can be quite nefarious. let me conclude by saying one thing. we do in washington, with

our kind of 9/11 prism and reinforced by the recent benghazi attack, overemphasize counterterrorism at the expense of other things. the u.s.'s counterterrorism policies in north africa are highly unpopular. so we need to get better and smarter about how we do counterterrorism. i think a big piece of it is economic. counterterrorism, i don't know how much it is shifts because they were really smart about it early on. then all the resources got put more into the military side and less on the economic side even though it tried, it tried to be more social and economic early on. we need a much more holistic approach to counterterrorism. >> thank you, dr. alexander, for your question. i think one of the reasons for the situation in northern mali is precisely the issue of refugees. i happen to have recorded some of the, what happened, i mean as a spawn of libya what happened already since the return of the, of the people serving in the brigades under qaddafi.

mali, in may, 284,000 malians fled northern mali. they, about, 60,000 went to boo keen talking about the neighborhood. al gear has 15,000 or 20,000. if the situation, if there is a situation, intervention as the french are willing to, go or, for their own reasons, i don't need to get into it. so it could aggravate the situation. if you're referring to the refugees in the saharan camps that is another big problem which has been lingering for 35 years now. and for those who are, promoting democratization and so on, so forth and stability, you still have, this morning when i was talking about the

intermaghreb relations and so forth, you still have those problems that have not been resolved. as long as you don't resolve those problems there is not a move forward. we're still at a stalemate. relations between algeria and morocco will still be tense and i don't know whether behind your question there was some insinuation that thinks, refugees of one part or another may join terrorist groups or, or something of that nature. of course this is, you know, this is a possibility, you know, in with the northern malias and so on. according to all the security people i talk to, if you look at the groups, this weird mujow and so on they're composed people coming from all parts. they come from some other groups but the big issue in my view, when we decide to

intervene somewhere in and so on, is that either the consequences of it, especially today, if you look it is not just the refugees. you have a very, very serious drought issue that is coming up. there's a huge food security issue that also needs to be taken into account if we want to avoid a disaster in the entire region. >> thank you. we have about three minutes left and i see a lot of hands up. right here in the front. i think we'll take one more and wrap it up, thanks. >> it is on the same issue. david ottoway from the woodrow wilson center. that you will have intervention in northern mali. what is attitude in algeria and other countries about a force and supporting it? can they stay on the sidelines while there is military intervention backed by ecowas or france?

what impact is going into northern mali to have a military resolution of the situation there, going to have on the maghreb countries? >> i think algeria's position on the situation in northern mali was to sort of have a comprehensive approach. they have set up committee of major chief of staffs what they call the four countries to try to address that. they came up with intelligence units for those countries. i think the strategy for algerians if i understand it correctly. try to separate legitimate local issues, which algeria was the mediator several times. the tariq issue was not born today. it has been lingering in the

'60s. the first rebellion was in 1963. then in 1990s, the early 1990s the algerians mediated between the tariqs. they basically lived under dire conditions. under the deals brokered in algiers was for the mallian government to address the social economic problems. algeria has been saying in order to deal with security issue in northern mali you have to address the economic problems. the legitimate. what they were trying to do is separate for instance, the mmla and ansar al-dean, as you know the head is wahhabi. he was malian counsel in saudi arabia in riyadh. the algerians are saying let's separate the two who have legitimate issues,

legitimate concerns because att, the previous president of mali, and surprisingly why was he overthrown? what was the coup, three months before the elections. he was going to leave anyway. there are suspicions the french were behind it. algerians try to separate issues. the tari qs have legitimate claims. the government had not lived up to its farther of the deal and akim. but in al qaeda in islamic maghreb and this mujawa who purportedly is for west africa jihad in west africa but only affects algerians and went to the camps and kidnapped foreign workers. so the algerians are saying wait a second. they suspect ecowas has france behind it.

precipitous intervention will not solve anything. don't forget algeria has a important tariq population as well. that is why they're against and initially i think algerians thought that the united states was on the same wave but, from "the washington post" this morning i have some doubt about that. >> thank you. jeff, you get the last minute, half minute. >> okay. i'll try to answer your question, just, simpler fashion. you know, i think it is important to remember that algeria has three hostages in northern mali. members of the diplomatic services corp. we've all seen the tremendous political consequences of putting your ambassadors putting your ambassadors in harm's way here in the u.s., right? i think algeria is extremely concerned about the fate of its diplomatic corps members

in mali. algeria lost two members in iraq following the u.s. invasion there. so algeria is very wary of the unintended consequences of military action and, is very mindful of the lives of its foreign servicemembers, just as any country is. thank you. >> thank you. this has been a very rich look at the domestic politics in each of the maghreb countries and looking at stability internally but also across the region and i've certainly learned a lot. i hope you all learned a lot. this is concluding the first part of our conference today but before we go on to thank our speakers i just want to make a couple of announcements. one is is lunch buffet lunch served in the back of the room. we have a little less than one hour to eat lunch. everyone has to eat lunch and be in this room because secretary of state hillary clinton will be coming shortly after that. i hope everyone is hungry. and, please join me in

thanking all of our speakers. thank you. [inaudible conversations]

[inaudible conversations] >> live picture here on c-span2 as a csis symposium on north africa begins a lunch break. that is the center for strategic and international studies. they're expected back around 2:00 p.m. eastern. secretary of state hillary clinton will speak at that point. we'll be back to show you that live. elsewhere on the c-span networks we have other live events to tell you about. the new america foundation is looking at north africa today, too. their focus will be on the

arab spring and the civil war in syria. that gets underway at 2:00 p.m. eastern and that is on c-span3. and the beat goes on the road to the white house. vice president biden, fresh off last night's debate, is in wisconsin today with his wife jill to campaign at the university of wisconsin in lacrosse. we'll have live coverage for you starting at 2:45 p.m. eastern, on our companion network, c-span. and later republican ticket mitt romney and paul ryan host a rally in lancaster, ohio. and we'll have that live for you as well, starting at 5:40 p.m. eastern, also on c-span. >> can we focus on the issues and not the personalities and the mud? i think there is a need if we could take a poll here with the folks from gallup, perhaps. i think there is a real need at this point to focus on the need. >> how do you respond, how do you gentleman respond to -- >> i agree with him. >> i think in general let's

talk about these, let's talk about these issues. let's talk about the programs, but in the presidency, a lot goes into it. caring goes into it. that is not particularly specific. strength goes into it in, that is not specific. standing up against aggression. that is not specific in terms of a program. this is what a president has to do. so in principle though, i'll take your point and think we ought to discuss child care or, whatever else it is. >> and you two? >> ross had his hand up. >> no hedges, if, and or buts i will take the pledge. the american people want to talk about issues and not tabloid journalism. i will take the pledge and stay on the issues. now, just for the record, i don't have any spin doctors. i don't have any speechwriters. probably shows. [laughter] i make those charts you see on television even. that shows. [laughter] now, but you don't have to wonder if it's me talking.

what you see is what you get. if you don't like it you have two other choices right. >> wait a minute i want to say one thing, ross in fairness. the ideas i express are mine. i worked on these things 12 years. i'm only person on here who hasn't been part of washington in any way for the last 20 years. so i don't want to implication to be that somehow, everything we say just cooked up and put in our head by somebody else. i worked 12 years very hard as a governor on real problems of real people. i'm just as sick as you are having to wake up and figure out how to defend myself every day. >> before president obama and mitt romney face questions is from undecided voters watch the first town halls from our archive at saturday, 7:00 p.m. eastern. senator john mccain and senator barack obama from 2008. at 8:35 george w. bush and vice president al gore from 2000. at 10: 10:00 p.m., president george h.w. bush, bill clinton and ross perot. next tuesday watch president obama and mitt romney in their town hall debate.

c-span's coverage starts at 7:00 eastern. yesterday the newest member of the federal reserve said he supports the fed's most recent round of asset purchases aimed at boosting the economy. jeremy stein also said concerns about the effectiveness of future stimulus efforts by the fed are well-founded. he gave his first public speech since his appointment at the brookings institution in washington. mr. stein is a former economics professor at harvard university and a former senior obama administration advisor to treasury secretary tim geithner. this is about an hour. >> good morning. i'm the vice president and codirector of the economic studies program here at brookings. i'm pleased to introduce one

of the newest governors of the federal reserve board, jeremy stein. governor stein swore the oath of office on may 30th, 2012, to fill an unexpired term ending january 31st, 2018. this is not his first tour of duty in washington. in 2009 governor stein served in the obama administration as a senior advisor to the secretary of the treasury and on the staff of the national economic council. prior to his appointment to the fed board governor stein was a stafford professor of economics at harvard university where he taught courses in finance and undergraduate and ph.d programs. previously governor stein taught finance at mit's sloane school of management. before that he was an assistant professor at the harvard business school. governor stein has a distinguished research record. he has covered many topics including behaviorial finance and stock market efficiency, corporate investment and financing decisions, risk management, capital allocation inside firms, banking, financial

regulation and monetary policy. in 2008 governor stein served as president of the american finance association. he is a chicago native and received his undergraduate degree from princeton university and ph.d in economics from mit i would also like to note in a shameless plug for brookings, governor stein has been a participant at the brookings papers on commission activity serving as a discusser for former fed chairman greenspan's 2010 paper entitled, the crisis. jeremy, i'm wondering whether our comments on chairman greenspan span's paper would be different now that you have four months under your belt at fed. upon his nomination the "harvard crimson" interviewed fellow economics professor who said jeremy stein is a brilliant economist who understands monetary issues extremely well. he will be a great addition to the board. the article goes on to say that he noted that stein would serve as a strong bipartisan candidate maintaining core democratic

set of ideals but retaining the trust of republican figures. today marks governor stein's first public speech as a board member. we're pleased to host him what is sure to be an interesting talk about recent fed actions. after the speech brookings senior fellow and former vice-chair donald cohen will monitor a discussion with governor stein. with that, please welcome, please join me in welcoming fed governor jeremy stein. [applause] >> thank you very much. thank you, karen. thank you for that nice introduction. so it's a pleasure for me to be here. and i want to say it's a special thrill and honor for me to be here alongside don cohen. one of my only regrets coming to fed, maybe the dress code, is my timing. i wish i had the good sense to get here a fewers earlier so i could have had don as a colleague and had the opportunity to learn from him. now only way i get to learn

from him is indirectly. it is notable some of the best advice i've gotten from people at the board since i joined has often come in the form of here is what don cohen would have done in the situation. don, indirectly thank you very much and i look forward to our discussion. what i was hoping to do was take this opportunity to describe the framework i've been thinking about monetary policy and current environment and focus primarily the role of large-scale asset purchases. before doing so let me note the usual disclaim, the thoughts are about to give you are my own and do not necessarily reflect the views of others on the fomc. there is a considerable diversity of views within the fomc and within, among economists more generally about the use of large-scale asset purchases, lsaps and other unconventional policy tools. this healthy given unenviable circumstances we find ourselves. let me be clear where i stand. i support the committees

decision of last month, namely to initiate purchases of mortgage-backed securities, mbs, at a rate of $40 billion a month in tandem with the ongoing maturity extension program of treasury securities. and to plant a con to continue those purchases if the committee does not observe a substantial improvement in the labor market outlook. given where we are and given what we know i firmly believe this was the right decision. in my comments today, i'm only going to briefly review the kise for taking that action as that ground has been well-covered most notably in chairman bernanke's recent jackson hole speech. instead i will explore more detail the decision that make l saps more challenging. the chairman discussed this estimates of effect of nontraditional policies on inflation are uncertain. use of nontraditional policies involves cost more than generally associated with more standard policies.

consequently the bar for use of nontraditional policies is higher than that for traditional policies. okay? so with that principle in mind, my aim here is to lay out the thought process that i'm bringing to bear in an effort to decide just how high the bar should be and whether proposed action clears that bar. along the way i hope to highlight some gaps in economists collective understanding of lsaps and maybe provoke a little further research on some of these questions. let me start by studying the context. the point of departure for any analysis of monetary policy is our dual mandate to foster maximum employment and price stability. and in my view the first past year is pretty clear. that is to say, unemployment remains painfully high and in my opinion, well above the long run structural rate of unemployment. moreover if you smooth through the ups and inevitable ups and downs of incoming data it appears the economy is growing at such a pace absent policy action progress on reducing

unemployment will likely be slow for some time. in the meantime inflation is subdued, running at or below our long run objective 2% while longer run inflation expectations remain well-anchored. so if the federal funds rate were say at 3%, we would have in my view a an open-and-shut case for lowering it. now the complication of course is that the funds rate is essentially at its lower bound which means we can't turn that dial further. instead we have to use unconventional tools such as lsaps and guidance about the future path of the funds rate. with respect to lsaps, my belief, this echoes the views that chairman bernanke expressed at jackson hole, is that prior rounds of lsaps played a significant role in supporting activity and in preventing a worrisome undershoot of our inflation objective. case is especially strong with respect to the first round of lsaps which was a very potent piece of policy action that helped to bring the economy back from the brink in 2009.

however we now face a harder set of questions not about the value of past lsaps but about marginal cost and benefits of future lsaps a number of observers raised concerns either about diminishing returns or escalating cost. i think that at least in the limit these concerns must be right. we could in principle push this tool to the point that the hurdle for additional usage would become very high. as policymakers i believe it is our responsibility to be as clear as possible about the nature of these costs and benefits and how they might evolve. . .

was a key part of the september see statement with a committee stating a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. and i believe that the lsap component helps to bolster the credibility of the forward guidance component by pairing an immediate and concrete set of actions with a statement about future intentions. i suspect this complementarity helps us to understand the relatively strong reaction of the stock market, for example, in the immediate wake of the release of the statement in september. in addition to the signaling channel, lsats also as i just said have a variety of directive affects on the economy. now to understand these effects it's useful to compare them with

those that make monetary policy work in normal times. away from its euro lower bound monetary policy is typically thought to work through and expectations channel. that is to say, when the fed cuts to fund rate long-term rates also fall, primarily because expectations of future short-term rates are moving down as well. by contrast, a principal motive of doing lsaps is to influence interest rates not too just expectations but to effectively just direct supply and demand effects in the long-term bond market. as the fed buys long-term bonds, their price goes up and their yield falls, even holding fixed expectations about the future path of short-term rates. another way to say the same thing is the so-called term premium on long-term bonds declines, which is sort of a jargon way of saying after an lsap long-term bonds are

expected to perform less well as an investment relative to short-term. there's a relative price pressure mechanism. there's a large body of evidence building that's suggested else happened to infect exerts significant pressure in this way on long-term treasury yield. so estimates of the cumulative affect, this is starting with qe1 and through the present, estimates of the cumulative effect of past lsaps on ten-year treasury yields are in the range of 80-120 basis point. these past actions are one reason why treasury term premiums are now near historic lows. these are somewhat model dependent but according to one well-known model that issues by fed staff, the term premium is in the neighborhood of minus 80 basis points. so here's the central theme or a central theme of my talk today which is the following. when policy works i moving term premium as opposed to by simply

shifting the path, the expectations about the path of short rates, the transmission to the real economy can be altered, in subtle but important ways. these differences can have implications for the benefits of the policy action for its costs, even its consequences for financial stability. moreover, to really address these issues we need to understand not only the hydraulic question of how much an lsap moves but also the underlying economics of why it does so. and i should just know that in many macro models this distinctive that i'm making between moving rates via expectation versus moving rates via term premium is essentially set aside. so for example, in the board staffs main workhorse model, the frp u.s.-born, the fallen long-term rate is assumed to have the same effect on you as i

-- activity irrespective of whether the ball in the rate was caused by a change in expectations of future short rates or caused by a move in the term premium. so for the sake of concreteness in what follows, let's just think this is purely a hypothetical but let's think in terms of a $500 billion else have conducted entirely by buying long-term treasuries. later come back and i'll speak to the differences that arise when the lsap is conducted with mortgage-backed securities. buffer concreteness i will start with treasuries. a reasonable as the base of the empirical literature would be that such a program reduces the term premium and thus the ten-year treasury yield by something on the order of 15-20 basis points. that would be the effect of an incremental 500 billion. in my mind this is the best empirical he understood and least controversial piece of the transmission mechanism. not surprisingly because we can observe relatively directly the effects. moreover, i should say i have no

reason to expect diminishing efficacy is on this particular piece of the transmission. all evidence suggests that the pass is likely to be a reasonable good guide to future outcomes. now, of course, this evidence on the direct treasury market impact is just the starting point. to fully develop great the effects of an lsap one needs to take several further steps, some of which are more open to debate. in so doing it's helpful to clarify the specifics of the supply demand story. one version of this story works by the market price of direction risk which is another word for the interest rate risk borne by an investor in long-term bonds. in this version of the story, all bonds, the treasury bonds, corporate bonds, mortgage-backed securities can roughly be thought of as close substitutes for one another, and an lsap by reducing the total quantity of interest rate risk or duration risk in private hands lowers the

price of this risk and thereby lowers the yield on all bonds, roughly speaking, by and about proportion to the duration. going further we might argue that to the extent that equities as a long-term asset also embeds some risk, the investors required to open should fall commensurately, giving -- the stock price. however, in other versions of the story markets are somewhat more -- intrusions into the bonds are not such close substitutes for one another. they're effectively separate investors who hold the different assets. in such a case an lsap would have differential effects, and an lsap that absorbs treasury supply might be expected to do the yield on treasury's relative to the yields on other assets or alternatively to increase the treasury corporate spread or to increase the treasury spread. in a similar logic would say in this case that an lsap might

have on a more modest effect on stock prices. so this is a backdrop. let me start with the efficacy side of the question. take our $500 billion else out, and as mentioned earlier let's just stipulate based on evidence of the literature that is going to reduce the ten-year treasury yield by 20 basis points. assembly to proceed would be to essentially plug his 20 basis point change into one of our macroeconomic models and ask one of the consequences that emerge for gdp growth and for unemployment. to be concrete if you did this exercise with the feds were course frb u.s. market would tell you that a $500 billion lsap which moves the 10 year treasury rate by 20 basis points should be expected to bring down unemployment by approximately two-tenths of one percentage point at a two-year horizon. this is economically meaningful effect. so natural to all models relying

a host of assumptions of the true effect could be larger or smaller than what comes out of the frbus or any model in that thing. i would like to focus on two focuses of uncertain. the first relates a point i mentioned which is that a given impact on treasury bonds may not pass through fully to other rates that are more relevant for consumption investment decisions such as corporate bond rates or primary mortgage market rates. now if you read a recent academic literature on this question it seems somewhat divided. some papers argued effectively the pastor is quite strong, near 100% but others argue it is quite low. my own kind of attempt at synthesizing this evidence is thus far there's been fairly substantial pass through from lsaps to things like corporate bonds and two mortgages. somewhat less, some but considerably less, has to do

more distant asset categories like, for example, equities. that's kind of my reading. leaving aside this one set of complications so that we suppose that a $500 billion to lsap will have a 20 basis point impact not only on treasury rates but on orbit bond rates, there's a second, and the more fundamental issue. how should we expect a company to respond, how should we read expect the company to respond what is long-term borrowing costs fall, but they fall not because of the change in the expected path of short run rates but rather they fall because of a change in the term premium? as i noted before, many macro models assume the effect will simply be the same. but is there any reason to believe that in reality the response to the two types of movements and rates might differ? a basic corporate finance analysis suggests the answer may be yes. to see why, let me suggest the

following example. imagine a firm that faces a rate on its 10 year bonds 2%. long-term rate is 2%. at the same time that firm expectation of the rollover sequence of short rates is 3%. so that's what i mean by a 1% term premium. long rate is 2%, expected path of the short rate is 3%. so there's a term premium of minus 1%. so what should this firm do? well, clearly it feels like it should take advantage of the cheaper long-term debt by issuing long-term bonds. but it's less obvious that this bargain at 2% rate on these long-term bonds should exert an influence on its capital spending plans. after all, it can take the proceeds of the bond issue and use these to pay down short-term debt, to repurchase stock, to buy short-term security, that is to say, to make a friday of

capital structure adjustments as opposed to just capital spending changes. these capital structure adjustments implicitly field an effective return of 3%. you can see that most clearly in the case when it basically issues the long-term bond and uses the proceeds to invest in something to pay down short-term debt, let's say. as a result the race for new investment might remain at 3% even as the long-term bond rate continues to fall. so as a result at least in this highly style example, the negative term premium matters a lot for financing behavior, but investment spending is somewhat decoupled from the incremental movements in the term premium and is instead more influenced by the expected path of short-term range as opposed to simply the long-term rate. so in my view the reasoning that suggests why one might in principle think that future rounds of lsaps might be expected to have diminishing

returns. as i noted above, the data are quite clear that passed onto the lsaps have pushed down rates and that pushed him term premium, but this argument would suggest that the further term are driven into negative territory, the more the previous logic comes into play and hence the weaker is likely to be the response of aggregate spending to further downward pressure on the long-term rates. this example is also, this corporate finance example is also consistent with what we have observed in market in recent months. issuance of both investment grade and high yield bonds has been robust. in fact, domestic nonfinancial corporate bond issuance is on pace to set a record in 2012, and to speculate rate, the high-yield segment, may also register a new high for the year. at the same time a large fraction of this issuance has been devoted to refinancing either to retiring existing debt or two payouts to equity holders, either dividends or

stock buybacks. these uses the proceeds have accounted for about two-thirds of all issuance by speculative rate firms so far this year. and as i've tried to suggest, such patterns are what one would expect in a world of segmented markets and negative term premiums. this caveat about the diminishing effectiveness of lsaps can be thought of as a specific version of what's sometimes referred to as goodhart slaughter committed under normal circumstances, changes in ten-year rates have significant explanatory power for economic activity. perhaps in part because they are a proxy for expected future path of the short rate or for other aspects of financial conditions. it doesn't follow that when one sets out to invalids attenuate directly via asset purchases without changing the future path of the short rate that the usual historical relationships with continue to apply. >> why we should acknowledge these it's also important to keep that in perspective. in addition to lowering interest rates, lsaps also boost equity

prices and other asset value. taken together, these effects of lsaps seem likely to be meaningful even if the benefit of the kimmitt and his are less than the baseline scenario sketched above. to be sure, is a wide confidence interval around any testament we might make of the benefits. moreover, it's worth repeating a point made earlier, which is whatever direct hydraulic effects lsaps have by pushing down term premium and discount rates, their overall effect may be substantially reinforced via signaling effect whereby they enhance the credibility of forward guidance about the future path of the funds rate. the scheduled benefits strikes as important part of the argument for lsaps in the current environment. okay, let me now turn to the cost side of the equation. several potential cost of lsaps have been discussed by others. one of the exit problems, namely that a large balance sheet may make it harder for the fomc to raise rates when the time comes.

between to go to the interest on reserves as well as various reserve training methods the fed has been testing, i'm confident that we have the tools to raise rates. if the fomc needs to act in the face of an emerging threat to christ to price stability, there's hope that in my mind we can. as to whether we will the federal reserve has repeatedly made clear its commitment to both sides of its mandate to price stability as well as the maximum employment. a second set of costs has to do with the possible effects of an asset purchases on various aspects of market function, including did ask and spread. it would be a concern if the fed ownership was to cause market liquidity to deteriorate significant. we've seen little evidence of the problem thus far, and they continue to closely monitor market conditions. if problems to begin to crop up we will know it and we will be able to adjust. a final notion of cost relates

to the current yields and premiums on treasury bonds. at an intuitive level one might think that the fed us or any other bar contemplating and large asset purchase information on prices and expected returns should be a relevant factor in the decision. fed -- said to believe the case might seem more appealing every term premium on treasury bonds was plus 200 basis points instead of its current level of roughly minus 80 basis points. this turns out to be a little subtle and to make sense of this intuition we have to return to the underlying question of what lsaps move term premium. one interesting, and i would say speculative possibility is that in a world where other sovereign debt has come into question, long-term treasuries, the recent their value is so high is there uniquely able to provide a money like safe haven to certain investors. think of currency which investors are willing to hold at a low, in fact zero yield

because the flow of services that currently provides. similarly, the negative term premium on long-term treasuries may in part reflect the scarcity of this money like asset. if so, it would be economically costly to remove treasuries from the system. and this logic is really an application what is often called the friedman wrote in honor of milton friedman. he questioned to what extent the analogy holds, to what extent is it the case that removing treasuries is like removing currently. it's a hard question to answer and it turns out to depend on the details of how you tell the story. if you believe only nominal treasury but not something similar like agency securities or aaa corporate bonds, and phenomenal treasuries provide money like services to investors, you can try to measure the value by looking at the spread on a treasury bond relative to something else that's very safe but not exactly a treasury bond.

so for example, look at corporate bonds, coupled with a credit default swap to eliminate the credit risk. northwestern university has done a study along these lines, and the conclusion is that between 24-70 basis points of a yield premium on treasuries is attributable to this effect. numbers in this ballpark suggest the cost of further lsaps on this dimension are likely to be nonzero but modest relative to even a conservative estimate of their potential benefits. a couple of caveats worth noting, first this methodology properly provides a lower bound on the cost of lsaps since it's plausible not only treasuries but also agencies, securities and aaa corporate bonds could have some degree of mining is to them in which case a spread of the sort that i just described my conceivably underestimate the value of the

monetary services provided by safe in their safe as it. so as i mentioned before in terms of future research this area is one in particular where both a conceptual understanding and our measurement techniques remain somewhat underdeveloped and where more work would be more value in forming policy. >> second thing to do, things can change over time. the clinton era debt buyback program, which in many ways was analogous to an lsap. as many of you might remember between early 2000-late 2001 the treasury repurchase long-term bonds with a face value of 63 and a half billion which was about 10% of the then outstanding stock of treasury security. much as with an lsap, and this repurchase program appears to have a powerful negative effect on the term premium with long-term rates falling sharply relative to short-term rates. but in contrast to what we've seen with an lsap so far it was also associated with what

appeared to be a quite pronounced increase in treasury specific scarcity. one way to scarcity manifested itself at the time was a wide income and this is a bit of a techie thing, with a widening of something called the treasury swap spread which rose to something like 120-130 basis points in the spring of 2000. we have not seen anything like that in the current employment. so it's a lesson i want to highlight is that we should continue to develop and monitor a provider of metrics of this scarcity phenomenon because they may be helpful on a going forward basis in terms of providing early warning its lsap costs do begin to rise relative to benefits. now for the sake of concreteness i've been talking in terms of a hypothetical treasury lsap, in light of our recent initiation of mbs purchases it's natural to ask what the differences are between buying treasuries and buying mbs. in my view there are two.

both of which suggest that mbs purchases may offer a better cost-benefit profile than treasuries, at least in the current environment. first on the call site i just allude to the idea that treasuries may provide money like safe havens services to certain investors such that removing them from the system could entail a cost. presumably mbs are somewhat less money like than treasuries, so this element of costs would be reduced when buying mbs. second, if the efficacy of treasury purchases diminished by the fact that many corporate borrowers already have plentiful access to low-cost funds, it's natural to focus on a sector that is more sensitive to thank nancy cause. the housing market would arguably fit this bill in the current and former. so to the extent and this relies on market segmentation, to the extent markets are segmented and india's purchases there for a more direct and powerful effect on primary mortgage rates into trish purchases, this possibility might be another

route. finally let me touch on the implications of lsaps for financial stability. some observers have argued that allowing good of low rates can create an incentive among market participants which is banks, insurance companies, pension funds, to reach for yield by taking on higher levels of risk with potential adverse consequences for stability. these concerns should be taken very seriously and there's lot of work ongoing at the fed devoted to monitoring such risks. a short summary would be to say that there is some qualitative evidence of reaching for yield behavior in certain segments of the market but we are not seeing anything quantitatively alarming at this point. of course, the worry that one often sees the tip of the iceberg in these kind of situations, so one needs to always be careful in interpreting the data. but taking is given that reaching for yield could be a problem. what are the implications at the margin for monetary policy and for lsaps in particular? first it's just a fact of life

that we're likely to be in a low rate environment for a considerable period of time given the economic outlook. it's not a choice in the margin. why we have to pay close attention to the attendant financial stability issues and be prepared to intervene with supervisory and regulatory tools as needed, i would find hard to accept the proposition that we should attempt to preemptively resolve them by starting to raise the federal funds rate today. the potential damage that could be caused by choking off the recovery is too great. second, one can argue that by reducing term premiums lsaps in particular action have potentially significant benefits in terms of financial stability. if you think about the recent crisis, the major source of problems was excessive maturity transformation by financial firms. that is to say, these firms are like to much on short-term debt. and one of the thrusts of regulatory reform has been an effort to attack this problem

with regulation, for example, the the the constructs of the liquidity coverage ratio at the net stable funding ratio that a part of basel iii. however, a complement to way to deal with the maturity treasure mission problem is to influence the underlying incentives for short-term debt issues. these incentives are in turn shaped by the structure of rates and the structure of term premiums in the market. as i noted earlier, a natural response for any firm facing an unusually low term premium is a financing response. that is to say, it makes sense to alter your capital structure by issuing cheaper, long-term debt to replace your short-term debt. therefore, not surprising that people look at the data, the average debt maturity of large nonfinancial firms has increased notably in the last few years. it's a natural response to the reagan farmer. moreover, the same pattern shows up among large financial firms. they have been significantly

lengthening their average debt maturity. now commission renew the current cheapness of long-term debt contrasts with crisis configuration where there was frequently a pronounced advantage favoring issuers not alone into the yield curve but at the very short end. in other words, the fact that the yield curve often tended to be steeply upward sloping at the very front end tended to give financial firms a strong incentive to issue overnight paper. upon the mind of this is that i suspect lsaps have by changing the structure of term premium in the market help to encourage an extension of debt maturity by both financial and nonfinancial firms, and l. l. -- all else being equal i think this developer is a good thing from the financial stability perspective. let me conclude. just to restate, i believe the recently announced policy of india's purchases couple with a change of our forward guidance, but these are strong positive steps. i'm hopeful these action by the

federal reserve will have to get economic growth a much-needed boost. at the same time i'm keenly aware of the many uncertainties we still have about the workings of nonconventional policies and lsaps in particular. as i tried to fight for lsaps really are something of a different animal and it is important for us to try to better understand these differences and to do our best to take them into account when making policy judgment. in short, there's a lot less for us to still learn. thank you very much. [applause] >> thank you, jeremy. that was a very thoughtful and thought-provoking talk. i am sorry we didn't overlap at the board and i think -- [inaudible] [laughter] >> let me start off with a few questions arising out of the talk. the talk was focused on the lsaps channel for monetary

policies, zero. the other channel of course is the expectation channel, the rate guidance channel. am i correct in interpreting you to say that the channel might be less subject to some of the cost benefit, diminishing benefits and rising costs than the lsaps channel, and, therefore, perhaps more effective way of promoting economic activity if more promotion is needed? and then, do you have any ideas on how the federal reserve might reinforce their guidance, make it, extend it further out, make that a more effective and more use channel rather than the lsaps channel? >> yes. i think in some sense the forward guidance, more directly mapped into monetary policy in the standard way because although we are some how reaching out individual using the same tool that is used in

normal times which is changing expected future path of the funds rate. so my expectation would be that that would work more as it normally does. and i think that's the reason why you see an effort to use them in complementarity with large-scale asset purchases. so in terms of making forward guidance more effective, as i noted in the talk, i think that there's supported signaling valley in addition to the direct benefits of lsaps, there's a supporting signaling value. then the other aspect of which you are alluding is effectively how to go about doing that. it might be useful to take a step back and say that in my view, the goal of our communication policy is to try and articulate as best we can the nature of our reaction function. that is to say, how the fed will behave under various contingencies. when you say that, you can see i think something of a shortcoming

of the type of pure calendar-based guidance that we've been using before. so when you make a statement, for example, like we anticipate that current conditions or economic conditions will warrant keeping the funds rate at such and such a level through 2014, that has a problem that potentially confounds a statement about your reaction function with something about your own internal forecast. and that i think modeled the objective. having said that i think the step we took in september, to change the way the forward guidance is articulated is a meaningful step forward. where now the idea is to separate a little bit and to say even after the economy strengthens, there's going to be a desire to have an accommodative policy. it has that conditionality, reaction function thing in there. what can be done to kind of take that further, naturally leads i think it's a question of triggers and thresholds and so forth. i think that's a very interesting and timely

discussion for us to be having. they will be sort of a variety of views on that but i think the way i kind of can see this, there's been the underlying constancy here's been to do a better job of articulating the action function and we are working on that. >> thank you. the thrust of a lot of for discussion was what can policy do to promote greater economic activity with the unemployment rate. the other aspect of monetary policy is inflation. and inflation expectations did jump just a little on the recent fed announcement. and some people have interpreted where the federal reserve is going as consistent with some of the academic, who have said the federal reserve should be delivery seeking at least in the short and medium term inflation

above its 2% target. so i would be interested in hearing your views on your reaction to the fact that those inflation expectations did jump, whether you proceed the federal reserve moving in the direction of its academic advice to you, what do they say, behavior responsibly for a period of time with respect to inflation. >> let me take the question for us and just clarify that. the views am going to express our middle, not necessary shared by everybody. i understand the sort of economic logic to understand how the model works when you write down a model in which you say that it might make sense to proactively incense and try to create inflation. my own view is that's not just right. i disagree fundamentally with a. i think would be a mistake to seek higher inflation, that only because it would do damage to our inflation like of the mandate.

i don't accept the proposition that actively seeking higher inflation would be helpful on the activity in light of active. i understand the logic of the mouse but they're quite sensitive to the assumption. and one assumption, you have to believe there is that when you generate any kind of inflation that people are really tuned to the real rate and higher now more rate that go along with inflation don't discourage activity, don't discourage investment and wouldn't take a lot of behavior or accounting or other reasons why that might not so easily be the case. i would just distance myself a little bit from that. >> the other side of this is the economic activity side. you stated chairman by make you stated many times, we thought what the federal reserve is doing has been very helpful for economic equity. the same time i think it's it is a social of skepticism out there because of the economy has been so sluggish, growth has a really

picked up. if anything it slowed down a little this year. how do you go about convincing somebody that those actions actually have been effective, the easier policy affected through lsaps and guidance having a positive effect on the economy? >> the very good and very difficult question at some level, and it's not a question that is specific to the current defined. it's always hard and as you well know, decades of research trying to understand what the effect of monetary policy and the economy is because we can't really run the counterfactual. so what do we do? this piece of transmission mechanism that we can kind of observe that are tangible enough that we can feel. so the effect of either the forward guidance on interest rates is directly observable. almost directly observable is the effect on mortgage refinancing, searches, and the immediate aftermath. but from that point forward it is certainly the case that we're using a model which said based

on history and based on past experience, a certain change in interest rates tends to translate to a certain change of activity. and all we can really do to refine that is ask ourselves are the reasons to think that the model wouldn't apply now as it normally applause. indifference to question, somewhat us talk about in my talk was one reason why the model through this turbine effect might not apply to in my own view, the expectation channel, the part that we were done with forward guidance i don't see a reason to think that would be stronger or weaker in the current environ. of course, there are lots of uncertainties that my basement estimate would be to say those effects off to work as they normally do. there's so many head was facing the economy it's kind of hard to unscramble to do the counterfactual. >> once the channels that you mention and the federal reserve often mentions is the channel

through equity prices. i think sometimes that gives rise to a sense that somehow monetary policy is favoring better off people, because less well-off people have savings accounts, the rates are getting on that is declining. they have less holdings of equity and equity prices are being boosted. how do you do with a sense that policy, the effective policy are not being effectively felt in all parts of society? >> so, you're certainly right to say a monetary policy is a blunt tool, and serving as a blunt tool for working on income distribution. the first order thing i would say that we could do for income distribution that concern is make progress on economic growth and an appointed almost by definition something that affects people at the lower end of the income distribution. the other thing, i mean implicit in the question is absolutely

correct premise that the lower end of the income with well with the sugar specialist stock ownership. of course, there's also more borrowing. so if you just look at the demographic data, people at the bottom of the income and wealth distribution tend to be on net borrowers rather than fashion. while they may be losing on the one hand by rls interest, they're also paying less interest if they've been able to refinance their mortgage. and even with difficulties in the mortgage world, auto loans have become much cheaper, have become quite broadly available across the income of wealth distribution. small business loans. so again if you take a broader perspective when you look at both sides of the balance sheet, i think it doesn't sweep all these things under the rug. >> thank you very much. we have some time for some questions.

>> wait for the mic. identify yourself, please step my name is cindy walsh and i'm an academic, national academic, a political activist. this is a very broad subject am going to try to make a concise question. >> please. >> chairman bernanke is claiming that these two e3, qe whatever our answers to mainstreams problems. i would like to represent mainstream, street in saying that we actually feel that these policies are creating the stagnation. when you are giving banks and corporations the ability to have free money, they are going to use it to invest globally and not actually work for their money. and so that is what we feel is causing this economic stagnati

stagnation. number two, as you said, the asset and mortgage security by max are making main street invest into stock situations that are risky, the low interest rates are making it impossible for us to put our money into savings accounts that we would rather do instead of being in the market. so we are seeing all of these policies actually working against main street and not for. now, i just want to end it by saying, it appears that the fed's policy is more, the long-term philosophy is that main street, domestic main street will profit after companies are able to expand globally to their fullest extent, and middle-class around the world is lifted. then that will come back

domestically to main street, and that will be decades away. so that seems to be what the policies are promoting. >> thank you. jeremy? >> may be no surprise that i don't completely agree. i'll just restate what i said. i think we're extremely focused on main street, and the best main street policy that i can think of is one that helps to foster job creation and reduce the unemployment rate. and in terms of the workings, the more granular workings of the policy, if you look at the data you will see, it's not just stuff going on in markets. is the primary mortgage rate that families face, and refinancing at those lower mortgage rates have gone a. the rates people pay for auto loans and so forth are going down. so of course there are collateral effects in financial markets but the clear focus of the policy, and that was a the

evidence to support, that the policy has been of benefit to main street. >> thank you. craig back there. >> i'm craig from bloomberg, and i'm not an academic. so the fed's exit strategy written in june 2011 didn't contemplate extending the maturity of the portfolio, which means the runoff rate will be slower than it was your so i'm wondering if in your financial stability analysis you are including very large asset sales out of the fed's portfolio. and the question is, do you think inflation expectations would hold in if you didn't sell any assets coaches kept the portfolio around 3 trillion? >> well, i think there's an

important thing to note here is with respect to inflation expectations is that we have multiple tools to tie in the -- is really, i think it's much less different from the normal situation and it's often made out to be. there's always a situation when the economy strengthens, when the appropriate time to time and we will face the judgment and have to make that judgment, and how will we will do on inflation will hinge most important one we make that judgment correctly. but given the judgment, the tools are there to raise short-term rates through interest on reserves go through the various tools, and sort of there's an additional tool which is the sort of incremental a chip on long rates if you vary a little bit the face of the asset purchase. the first order thing, we can always raise, move away from the lower zero bound which you are but once you start raising rates. i think we're back a much more conventional world.

i have a high degree of confidence in technological ability to move the funds rate up. >> ted truman. >> thank you. ted truman from peterson institute for international economics. i thank you for your remarks, which i think probably qualify as a little more sophisticated for the presentations at brookings and the last year. my question has to do with a channel, and the criticism that you didn't mention. as an international economist. and that is the impact of this on the rest of the world, and whether, in general, and whether in some sense the challenge you left out was the exchange rate. there is some suspicion i think in the world in general that, in fact, what you talked about was

completely irrelevant and it's all about the dollar. exporting unemployment, whatever you want to call it. and then the other part of it is you are also exporting inflation to parts of the world that don't want it. so i would be interested in your response to that kind of criticism of his policy. >> well, i mean first of all i will acknowledge that, you know, your statement in the sense that it is certainly the case that there is an element of transmission mechanism that works at the margin, you know, if the dollar weakens how that plays some role. if you pan back a little bit, kind of look over the last couple of years, the evidence which suggests that's not a dominant thing. so for example, i alluded to the fact that the term premium, a durable effect of lsaps has been to lower the term premium on bonds by 80-120 basis points.

if you look at how the foreign exchange over the same time there's no corresponding effect. there's a lot of other headwinds and the dollar has been strengthened by safe haven flows and so forth. but one does not get the impression it's not my view, that kind of dominance aspect of this is working for the dollar. the other point i would make is of course come back and consider the broader context. i think one of the things the federal reserve and other central banks can do that's positive for other countries is to raise growth globally. i think to the extent where able to do that, these other channels, i think that will ultimately be beneficial rather than -- [inaudible] >> thanks. ryan, at the economist. two quick questions. i guess first, practically speaking what's the difference between a policy in which you try to use lsaps to raise real

growth and also react more slowly to inflation after the recovery sort of strengthens, and a policy of trying to get out more inflation. second while there certain risks in the short term, given the costs and risk of the zero lower bound is another case to be made that we want number raised to be a bit higher in the long run? >> suffers part of the question, again i disagree with the premise of ginning up, what we're doing is ginning up or seeking to gin up inflation. let me try and explain to you how i think of the reaction function and why you might make a statement like it would make sense to keep rates low for fora considerable time. it's precisely because, nothing to do with inflation, it's precisely because we have talked about how life is difficult near the zero lower bound. policy doesn't work as well or there are various costs. so it is a bad place to be. that suggests as you start to move away from the zero lower bound want to take steps to make

sure that you don't fall back. that in my mind that's the motivation for slower longer things. it doesn't have to do is kind of stimulating inflation expectation. other people may think about it differently but i think it's the logical counterpart to a bit of skepticism about lsaps is to lean a little bit harder on the other peace. i'm sorry, could you remind me of the second piece? >> because of the zero lower bound wouldn't be a good idea to get number raised up against the longer run? i guess you got added in your answer. >> i used to deal with economic policy at the state department, and my question relates to a figure i thought i heard correctly, that the lsaps over a two-year period have an impact of lowering unemployment by

0.2%. that seems -- unless i misunderstood. >> excusing. that was a hypothetical of the incremental effect of a $500 billion lsap. so first of all, the past lsaps have been bigger, cumulative league than 500 billion. i will go on the exact figure. moreover, qe1 for example, is done at a time of quite serious market dislocation. so i subjected you would be that qe1 dollar for dollar had substantially more bang for the buck than that figure that i recited for you. so i would think that you would affect is bigger than. >> thank you. >> agenda, thank you very much. >> thank you. [applause] [inaudible conversations]

>> and we are live once again here on c-span2. a look here at the symposium underway since this morning from the center for strategic and international studies, or csis. this is a daylong symposium on north africa, taking a lunch break that is wrapping up now. a keynote address coming from secretary of state hillary clinton. that's expected at the top of the hour. the conferences on the transition in the maghreb region of north africa. and again, secretary of state hillary clinton coming up at 2 p.m. eastern. while we wait for the secretary to arrive, we will show you a little bit from earlier today of

the symposium on north africa from the csis. >> good morning, everyone. i want to thank you for inviting me to i want to thank csis for hosting this event. i think the time is very opportune. there's a lot of stuff going on in north africa, and i think it's a great opportunity to have come hopefully an in depth discussion about it. i also want to thank my fellow panelists. jon alterman said this morning that we were the all-star team of north africa experts, right? and i appreciate that, i really, really do. it's kind of like being an all-star ping pong player. there's just not that many of us. i also, i appreciate the comments, the 18th of north african experts in that same sort of reference. i think that doctor has to be

mr. t. >> so i'm going to do something i think a little unusual for a conference, and what i'd like to do is put out a couple of scenarios or in al simpson as for where north africa might be hitting. i don't intend the sinners to be exhaustive but i don't intended to be definitive. instead i hope they are speculative and assert help their are provocative and they can serve as fuel for discussion. before we do that though, it's important established a base case. where do we think these countries in north africa are. and then from there we can project down were so we think they might be going. what are their trajectory. lastly i would like to propose some alternate trajectory but if we're the most likely sinners, the reasonable trajectories that analysts think these countries are on, will be some of the circumstances that would throw them off that would present us with an alternate so now, whether positive or negative. i'm going to focus by road on algeria and libya. we have a super abundance of

algeria -- i think i will contribute further to the. i'll also talk about libya which hasn't been addressed thus far in a whole lot of detail. i will be the site to nishida. there's several reasons for that. first, there was a fantastic presentation disappointed when we see the tunisia can serve, or serve as a bellwether for political change in north africa, since december of 2010 throughout 2011, it seems tunisia has burst and it's a longer serving as a catalyst for regional change. certain dynamic change within tunisia itself by the countries that sound tunisia and the country that may been pushed on the path of political change by tunisia are now following their own course. they are no longer fondling the path that tunisia put them out on. likewise, in the going to talk about morocco. any number of iraq are experts in the room. dr. lawrence but also others.

also i think morocco is relatively insulated from regional instability, whether its instability and libya or whether it's instability in northern now we. as anwar said this more, morocco has structured its political system in such a way that it can adapt to and absorb political change in a relatively controlled fashion. i'm going to leave aside morocco and leaves i tunisia. instead would focus on algeria and libya. ariza want to focus on algeria and libya is, i know these countries better than in no the the other two, but also because i think there is an outside potential for regional instability, if difference in years and i've algeria or libya come to fruition. these are big significant countries and their intertwined with regional dynamics in a way that morocco and tunisia are not. so libya with its population of 6 million, 1.6 million barrels

of oil a day, generates about $1 billion of revenue per day. pretentiously much higher oil and gas exports in the future. is everything is proceeding to very positive or optimistic scenario libya could be a phenomenally rich successful democracy on the southern shores of the ministry. another scenario is that it could be somalia, a stones throw from your. it could end up as a failed state. i'll get into more detail about that. likewise, algeria has huge potential. i know it is there some younger faces in the graco or i'm getting older. i think it's important emphasized how big algeria is but it's not something we think about on a day-to-day basis but just to give you my usual throw away figures, the distance from algiers to its southern border is greater than the distance from algiers to london. it's an enormous country. likewise the distance, the border that algeria shares with mali is greater than the distance from new york to chicago.

800 miles. it's a huge territory thatas to be covered. not only is algeria big, it's also phenomenally wealthy. reserves upwards of $200 million. it's a powerful for increase in professional is military. and it has likely be untapped oil and gas potential. so for the moment from my prospective algeria is potentially the key but also the keystone for north africa. so where libya and algeria go as i think instrumental for regional dynamics. one of the challenges of starting algeria, libya or doing centers for algeria and libya is there some analytical problems. the case of libya, when the events of 2011 started, when the rebellion started in center of 2011, we found analysts in d.c. rapidly trying to catch up and

make up for lost time on libya. a lot of the times the records they were drawing upon to understand political dynamics in libya were books that were written 20 years ago and based on research that had been conducted 30 years ago. they had been scrambled to build a knowledge base ever since. >> and back live now to csis. jon alderman speaking, getting readready to introduce secretarf state hillary clinton, giving the keynote address at the center for strategic and international studies symposium on north africa. you are watching live coverage here on c-span2. >> i think for all of us who worked with him he's a model of judgment and probity here in washington. he's a counselor and trustee of csis and it's my pleasure to introduce general brent scowcroft who will introduce our keynote speaker. thank you. [applause]

>> good afternoon. it's a real pleasure for me to be able to stand here for jon henry, and introduce our speaker today. it's a testament to the importance of north africa the global security, that the secretary of state has taken time to address this conference on the maghreb in transition. the forces that are surging through the air world right now had many of their origins in the maghreb, and some of the most promising opportunities for positive change in the region also have their origins in the maghreb. we've also seen tragedy and the maghreb but we cannot forget that we've also seen tremendous hope, and it is that hope which

motivates us today. secretary clinton is no stranger to this topic, and she's been putting energy into strengthening both the u.s. bilateral relationships with the maghreb countries and the ties between those countries themselves, since she came into office four years ago. her term as secretary of state follows a distinguished career in public service, as a lawyer in arkansas, as the first lady of the united states come and more recently as the united states senator from the state of new york. she not only has the highest approval rating of any member of the u.s. cabinet, she has as well topped the gallup poll for 16 years as the most admired woman in the world. besting the previous record of eleanor roosevelt, who held the title for only 13 years.

as america continues to engage in north africa, we are extremely fortunate to be served by a public servant who is engaged in these challenges day in and day out, who cares deeply about the issues and how they affect america's interest, and he believes an even brighter future for the people of the middle east. please join me in welcoming the secretary of state, the honorable hillary rodham clinton. [applause] >> thank you. thank you all. thank you very much, and a special word of thanks to a friend, and someone who i admire greatly, general scowcroft. his many years of distinguished service to our country is a

great tribute in every respect. thanks also to jon alterman and csis for hosting this conference on the maghreb in transition, seeking stability in an era of uncertainty. i also wish to acknowledge the doctor for his strong support of this important conference, and members of the diplomatic corps as well. ..

of anger and violence have understandably if lead americans to ask what is happening? what is happening to the promise of the arab spring and what does this mean for the united states? i certainly think it's important to ask these questions and to seek answers as you are doing today. let me and who on a personal note start with what happened in

benghazi. i counted a board that has already started examining whether our security procedures were appropriate, whether they were properly implemented, and what lessons we can't and must learn how for the future and we are working as thoroughly and expeditiously as possible knowing that we cannot afford to sacrifice accuracy to speed. and of course our government is sparing no effort in tracking down the terrorist who perpetrated this attack and we are focused as we must be on what needs to be done right now to protect our people and our facilities. we had another terrible attack yesterday. i strongly condemn the killing of a long time employees at our

embassy and we are working with the yemeni authorities to investigate this attack and to bring those responsible to justice as well. but throughout all of this, we must not only focus on the headlines. we have to keep in mind the trend line. we have to remain focused on the broad strategic questions posed by these space transitions. and their impact on american interests and values. let me start by stating the obvious. nobody should have ever thought this would be an easy road. i certainly didn't. however, it is important to look at these four pictures to way of the violent act of a small number of extremists against the aspirations and actions of the region this, people and

governments. that broad view supports rather than discredits the promise of the revolutions. it reaffirms that instead of letting mama's and extremists speak for the entire country is. we should listen to what the elected government and free citizens are saying. they want more freedom, more justice, more opportunity, not more violence. and they want better relations not only with the united states, but with the world. i have no illusion about how complicated this is. after all, american foreign policy has long been shaped by debates over how to balance our interest in security and stability with our values in supporting freedom and democracy. a recent revolutions have intensified these debates by

creating a new birth of freedom. but also unseating old part first -- partners and unleashing unpredictable forces. as i said last fall at the national democratic institute, we have to be honest that america's policy in the region will always reflect the full range of the interest and values, promoting democracy and human rights and defeating al qaeda, defending our allies and partners and also ensuring a secure supply of energy. and there will be times when not all of our interests and values align. we work to align them but we do so acknowledging reality. and it's true that we tayler our tactics for promoting space change to the conditions on the

ground in each country. after all, it would be foolish to take a one-size-fits-all approach regardless of circumstances or historical trends. but in the long run, the enduring cooperation that we seek and that our interests and our values demand is difficult to sustain without space legitimacy and the public consent. weeks before the revolution in egypt began i told the arab leaders that the region's foundations were sinking into the sand. it was clear even then that the status quo was unsustainable. that refusal to change was itself becoming a threat to stability. so, for the united states supporting space transition is not a matter of idealism.

it is a strategic necessity. and we will not return to the false choice between freedom and stability. and we will not pull back our support from emerging democracies when the going gets rough. that would be a costly strategic mistake that what i believe undermine both our interests and our values. now we recognize that these transitions are not america's to manage and certainly not ours to win or lose. but we have to stand with those who are working every day to strengthen space institutions, defendant universal nights, and dry if inclusive economic growth. that will produce more capable

partners and more durable security over the long term. today these transitions are entering a phase that must be marked more by compromise than by confrontation. by politics more than protest. politics that deliver. economic reforms and jobs so that people can pursue their livelihoods and provide for their families. politics that will be competitive and even heated, but rooted in space rules and norms that apply to everyone. islamists and secularists, muslims and christians, conservatives and liberals, parties and candidates of every strike. everyone must reject violence, terrorism and extremism abide by the rule of law, support independent judiciary is and uphold fundamental freedoms.

upholding the rights and dignities of all citizens regardless of faith, ethnicity or gender and then we look to other governments to let go of power when that time comes just as the revolutionary war began transitional national council did this past august transferred to the newly elected legislature and ambassador chris stevens cited at his time in the country achieving of a democracy and a broad based growth would be a long and difficult process we know that from our own history with the two injured 35 years after our own revolution we are still working towards that more

perfect union. so one should expect setbacks along the way. times when one will surely ask if it was worth at. but going back to the way things were in december, 2010 isn't just undesirable, it is impossible. so this is the context of which we have to view recent events and shape our approach going forward since this is a conference on the moderate that's where i will focus, because after all that is where the arab revolution started and where an international coalition helped stop a dictator from slaughtering his people and we're just last month lease all such disturbing violence. but let's look at what is actually happening on the

ground. especial in light of recent events. we had to s always be clear ride about the threat of violent extremism. the space transition was never agreed to drain away the reservoirs built up through the decades of dictatorship nor was it enough time to stand up effective and responsible security forces to replace the repressive ones of the past. as we have warned from the beginning, there are extremists who seek to exploit periods of instability and hijack these space transitions. all the while al qaeda and the islamic terrorist groups are trying to expand their reach from a new stronghold in northern mali but that isn't the full story. the terrorists who attacked our mission to does not represent

the millions of libyan people who want peace and deplore violence. and in the days that followed, tens of thousands poured into the streets to mourn the ambassador stevens who had been a steadfast champion of their revolution. use all the signs. one read thugs and killers don't represent benghazi or is on and on their own initiative the people of benghazi had militias armed and disrupt the rule of law. that was an inspiring sight as any that we saw in the revolution and that points to the promise of the arab spring by starting down the path of space politics.

libyans and arabs across the region have firmly rejected the extremist argument that violence and death are the only way to reclaim dignity and chief justice. in a tripoli the country's transitional leaders condemned the attack. they fired at the top security officials responsible for benghazi then the government issued the ultimatum to the militia across the country disarm and disband in 48 hours or face the consequences. as many as ten major farm groups complied. now the militia and extremists remain a significant problem in libya. but there is an effort to address it has taken hold throughout the country. as libya grapples with the challenge of forming a government, the international community needs to support its effort to bring the militia to

heal and provide security for all of its citizens. consider to -- tunisa the birthplace. last year and islamist party won a plurality of the votes in an open and competitive election. i know some took this as an omen of doom but these new leaders formed a coalition with secular parties and promised to uphold universal rights and freedom including for women. and the united states made it clear that we would be watching closely and would assess the new government by its actions, not its words. this past february students and civil society activists shared with me their fears about extremists seeking to be a real their transition to the lasting

democracy but also their hopes of responsible leaders and accountable institutions would be strong enough and willing enough to turn back the challenge. and indeed, we have seen an intense debate played out in the tunisian society. for example, early draft of the new constitution label women as complementary to men but the active civil society raises a strong objection and eventually the national constituent assembly amended the text to recognize women's equality. the civil society is wise to remain vigilant and exercise their hard-earned rights to safeguard their new democracy. like the hundreds of women who recently took out to the streets to protest on behalf of a woman charged with indecency after she was raped by a police officers.

these competing visions of to tunisa's future were put to the test of violent extremists attack the u.s. embassy in tunis and burned the american school nearby. the increased the embassy and promised to assist with repairs to the school which they have done then they come from the violent groups and prevent to tunisa from becoming a terrorism. following through on pledges is essential to give those responsible for the attack must be brought to justice. the government must provide security for diplomatic missions and create a secure environment for foreign residents and visitors and the rule of law must extend to everyone throughout the country.

they took to the newspaper pages and facebook and trevor to denounced the attacks and the extremist ideology behind them putting their own political capital on the line. the foreign minister for the washington to stand with me and publicly condemn the violence. so we continue to support those changes that are occurring in libya and in tunisa and those leaders and citizens to understand what is expected of them if they are to fulfil their own hopes now the rest is different. morocco and algeria have not experienced revolutions, but recent events have also tested their values and resolved. last year when the citizens of

morocco called for change, the society under king mohammed the sixth answered with a major constitutional reforms followed by early elections and expanded authority is for parliament. the islamist party leads the new coalition along with a variety of other parties. after 13 years in the opposition. and we had been encouraged that its leaders that fought to engage all and had focused on creating the jobs and corruption and we urge them to follow through on all of their commitments for political and economic reforms. with anti-american protesters in the streets across the city's the foreign minister travelled to washington for the first-ever strategic dialogue. he could have avoided the

cameras but instead he strongly condemned the attack in benghazi, increased a broad partnership in the united states and pledged that his country would continue working towards democracy and the rule of law. algeria has much to gain by increasing the changes that are taking place around it. and we have seen some progress. the government held parliamentary elections and invited international observers to monitor them for the first time to read and moved quickly last month to protect diplomatic missions including the u.s. embassy and to diffuse tensions in the streets. but still, algeria has a lot of work to do to uphold universal rights and create space for civil society, a message i delivered at the highest level in a person in february. now what do these snapshots and stories from across the region

tell us? on the one hand, last month's violence revealed strains of extremism that threatened those nations as well as the broader region and even the united states. on the other hand we've seen actions that would have been hard to imagine a few years ago. the democratically elected leaders and free people in the arab countries standing up for a peaceful pluralist future. it is way too soon to see how these transitions will play out. but what is not in doubt is that america has a big stake in the outcome. last month at the united nations general assembly in new york, i met with leaders from across the region. and i told each of them that the united states will continue to pursue a strategy to support emerging democracies as they were to provide effective

security grounded and the rule will fall to spur economic growth and bolster space institutions. we have made those three priorities the hallmark of america's involvement in the region. we have convened the conference is to coordinate assistance, leverage new partnerships through the community of democracies, the oecd, and we've stepped up our engagement with the arab league sign the memorandum of understanding for a strategic dialogue between us. but we recognize that words whether they come from us or others are cheap. we talked about investing and responsible leaders and accountable space institutions it has to be followed by actual investments. so we have mobilized more than $1 million in targeted assistance since the start of the revolutions. and the obama administration has requested from congress a new

770 million-dollar fund that would be tied to the concrete benchmarks for political and economic reforms. and i again urge congress to move forward on this priority. let me briefly address the three parts of the strategy starting with security. the recent riots underscore the challenges of safeguarding public safety and free societies and reforming security forces. for decades those forces protected regimes. now their job is to protect citizens, especially against the threat from violent extremists for some time al qaeda and the islamic monrad and other terrorist curves now with the chaos and conflict allowing these groups to carve out a larger safe-haven they are

seeking to extend their reach and networks and multiple directions. so, we are using every tool that we can to help our partners fight extremism and meet their security challenges. we recently embedded additional foreign service officers which regional expertise and to the u.s. africa command to better integrate our approach. across the region diplomats, development experts and military personnel are working hand in hand. across the region also we are partnering with of the security officials of these new government's who are moving away from the represses approaches that helped fuel the radicalization of the past and we are trying to help them develop strategies grounded in the rule will fall and human rights. we are helping the border guards upgrade their equipment and tightened the patrol so that weapons don't fled the region even more than they already

have. we are helping train prosecutors and build forensic labs that can produce evidence that stand up in courts. to train police and other justice officials and we are very pleased that tunisa also agreed to host a new international training center that with health officials from across the region developed the means to protect their citizens security and their liberty. now the nation's are not the first to struggle with the charge of protecting a new democracy and one of the lessons we've learned a lot of the world is that training, funding and equipment will only go so far it takes political will to the hard choices and demand accountability that is necessary for strong institutions and lasting security and changes the

mind set to make those reforms stick. i recognize that in particular libya and tunisa the people i'm talking to were often victims of security forces. they were beaten in some cases tortured, and for them all of a sudden to find themselves on the side of security forces on both new regime takes a mental change and they have admitted that it is a responsibility that day now understand they must assume. the united states is also stepping up our counterterrorism efforts helping the countries of north africa target the support structure of the extremist group particularly al qaeda and its affiliates. closing safe havens, cutting off the financing, countering their

ideology, denying them recruits, our transit herem -- counterterrorism is of ten countries providing training and support so they can better work together to disrupt terrorists networks and prevent attacks we are extending work with civil society organizations in specific terrorist hot spots particularly villages, prison and schools. the model of economic and social challenges fuel the revolutions and the call for reform. in order to succeed, these emerging space governments need to show they can deliver concrete results so that is the second area we're focused on working with the media enterprises which create jobs and alternatives to radicalism bringing women and young people went to the formal economy

providing capital training for on to the nurse, helping in their economic wall and trade policies so their private sectors can actually flourish. we are establishing an american enterprise fund with an initial capitalization of $20 million to stimulate investments in the private sector and provide a business with needed capital. they're offering $50 million of loans and guarantees and the millennium challenge corporation is helping to address long-term constraints to economic growth. we have provided export training for small-business owners and job training to hundreds of young to -- tunisians and we launched in august to help the tunisians students study in american universities and colleges. we also look forward to working

on economic issues with the new government once it is formed to read one of our top priorities is helping the nation's trade more with each other. that after all will create new jobs for their citizens and markets for their products. but today in the least integrated regions in the world. it doesn't have to be that way. opening the border larocco would be an important step in moving towards that integration. the third is strengthening the space institutions and political reforms. not an easy process. as we can see from the difficulty in forming the government in libya. political progress has to grow from the inside, not imposed from the outside or abroad but there are ways we can and are helping to be in libya for example the united states has trained hundreds of lawyers and

civil society activists on the election and offer tutorials to campaign managers and candidates in the run-up to the recent elections. now we are encouraging civil society to be fully engaged in drafting a new constitution that will protect the equal rights of all libyan citizens. similar efforts are under way tailored to local needs and conditions and the transitions occurring are flanked as you know with developments across the white middle east. egypt of course the largest nation cornerstone of the region we've seen its new leadership say that the success of egypt's space transition depends on building a consensus and speaking to the needs and concerns of all egyptians men and women of all faiths and community. we stand with the e egyptian

people in their quest for universal freedom and protection. and we have made the point that egypt's international standing depends both on peaceful relations with its neighbors and also the choice it makes at home and whether or not it fulfills its own promises to its own people. the regime continues to wage brutal war against its own people and territorial slips from its last. i recently announced major new contributions of humanitarian aid and assistance for the civilian opposition and we remain committed with our like-minded partners to increase pressure on the regime. in yemen where we supported negotiations that eventually achieve a peaceful transition, we are working to prevent al qaeda and other extremists from threatening these emerging

fragile space institutions and prevent them from finding a safe haven to stage a new tax. we discussed the importance of continuing reforms to move his country towards more democracy and prosperity. so in all of these places and in many others, the united states is hoping the people love those nations chart their own destinies and realize the full measure of their own human dignity. dignity is a word that means many things to different people in different cultures but it does speak to something universal in all of us. as one the egyptian observed in the wake of the country's revolution, freedom and dignity are more important than food and water. when you eat and humiliation, you can't taste the food.

but dignity does not come from avenging perceived insults especially with violence that can never be justified to read it comes from taking responsibility from oneself and one's community. and if you look around the world today, those countries focus on fostering growth rather than fermenting grievance pulling ahead. the building schools instead of burning them, investing in those people creativity, not encouraging the rage. empowering women, not excluding them from opening their economy and society to more connections to the wide world, not shutting off the internet or attacking the embassy's. i remain convinced the people do not want to trade the tyranny of a dictator for the tyranny of the mob. there is no tierney in that. the people of benghazi told the

world loudly and clearly when they rejected the extremists in their midst what they hoped for and so it is the leaders when they challenged the militia and who spoke out against violence and hatred. that is the message we should take from the event of the last month. i want to add and close with one more thought about what happened in benghazi because as you might expect, that is for me and all of the men and women at the state department very personal. diplomacy by its nature have to be often practiced in dangerous places. we send people to 170 countries around the world, and yes, some of those are in the war and

conflict zones. others are in unstable countries with complex threats and no u.s. military presence. that is the reality of the world we live and. and we will never prevent any act of violence or terrorism or achieve perfect security. our people cannot live in bunkers and do their job. but it is our solemn responsibility to constantly improved to reduce the risks our people face and make sure they have the resources they need to do those jobs we expect from them. and of course nobody takes that more seriously than i and the security professionals at the state department to. chris stevens understood that diplomats must operate in many places where soldiers do not or cannot, where there are no other boats on the ground, and

security is far from guaranteed. and like so many of our brave colleagues and those who served in the armed forces as well, he volunteered for his assignments. last year our ambassador to syria, robert ford, was a salted in damascus by the crow regime thugs, but he insisted on continuing to meet with peaceful protesters and serving as a living manifestation of america's support. and we drove to the battered city and people covered his car with flowers. people like chris and roared represent diplomacy and america at its and our best to read their absent especially from the dangerous places there are difficult consequences.

extremism takes root, our interests suffer and security at home is threatened. so we will continue sending our diplomats and development experts to dangerous places. the united states will not retreat. we will keep leading and we will stay engaged in the monrad and everywhere in the world, including those hard places where america's interests and values are at stake. that's who we are and that is the best way to honor those we have lost. and that is also how we ensure our country's global leadership for decades to come. thank you dewaal very much. [applause] [applause]

>> now comes for me the easiest part. i get to say thank you to the people that made today so successful and i thank general scowcroft for that introduction. i want to thank my partner in crime. partnerships don't all have to be equal partnerships and they've taken this conference in the larger work that we are doing as a labor of love and i understand bill will start but there's also lever part and the amount of work that went into this that he put into it thinking how to restructure and what do people talk about that wasn't me, that was him. it to the extent people think this was successful with this him that we have to thank for that. [applause]

he did not do this alone either. he has a terrific stand and jennifer cunningham have been working for weeks and weeks to make everything goes securely. i think they've already left the room. it was more efficient and more pleasant than i ever imagined they could be. doctor, thank you very much for helping us do the work we want to do on north africa. they've managed from the external relations program have made all of those cameras showed up and also be polite, so thank you for be heading. this i hope is not the end out all of the important work we have to do on north africa and i think there's a conclusion that we can draw from today's conference. it is the importance of doing this.

we have had absolute participation from the panelists. you have to come back. we want you back soon and often because we still have much to figure out. opportunities to explore and drill together. thank you very much. [applause] [inaudible conversations]

[inaudible conversations]

[inaudible conversations] a final look here at the senate for strategic and international studies as a daylong symposium is wrapped up on the issues facing north africa keynote address being given by secretary of state hillary clinton. if you missed any of this you can see it online at c-span.org/videolibrary. 3

c-span.org/videolibrary. can we focus on the issues and not the personalities. if we take the poll here with the folks from gallup perhaps there is a need to focus at this point on the need i think in general let's talk about these issues. let's talk about the programs. but in the presidency a lot goes into it. caring goes into it. that's not particularly specific. strength, that's not specific that's not specific in terms of a program. this is what a president has to do. so, in principle, i will take your point and think that we ought to discuss child care or

whatever else it is. >> i will take the pledge because i know that the american people want to talk about the issues, so i will take the pledge on the issues. just for the record i don't have any spin doctors or speechwriters. [laughter] i make those charts on television. [laughter] you don't have to wonder if it is me talking. what you see is what you get and if you don't like it you have other choices. >> in fairness the ideas i express are mine and i worked on these for 12 years and i'm the only person that hasn't been taught of any way for the last 20 years, so i don't want the implication to be that somehow we've kicked up and put in our head by someone else. i worked very hard on problems

and i just as sick as you are by having to wake up and find a way to defend myself every day.

next, national security advisers to the romney and obama campaigns take part in a foreign policy debate covering u.s. presence in afghanistan. iran's nuclear program and recent changes in the arab world. the event was hosted by the center for the new american security. the american enterprise institute and the new america foundation. it's about 90 minutes. good afternoon. welcome. my name is richard fontaine. i'm the president at the center for the new american security. it's a pleasure to welcome you today to this presidential campaign debate with a special collaboration among the american enterprise institute, the center for the american security and of a new america foundation.

this event is the fifth in the series of the institutions held throughout 2012 to reach means informing the national-security debate during the presidential campaign. we tell sessions on covering america's overall in the world, the defense budget, the asia-pacific, the middle east, and several weeks ago we held a senate debated arizona state university. today we meet at a time when a foreign policy has returned to the center of the conversation between the candidates. i am therefore very pleased to introduce the campaign representatives rich verma is currently a partner where he works on international law we and regulation. he most recently served in the obama administration as the assistant secretary for legislative affairs. earlier in his career for user for the senior national security adviser to the senate majority leader harry reid. and prior to that worked in the

house of representatives for the national democratic institute and as an officer in the air force judge of the kids general corps. dov zakaim as of the center for international studies. previously he was the senior vice president of hamilton. during the bush administration, dov as under secretary of defense and chief financial officer of the comptroller for the department of defense. and several other pentagon posts during his career as the author of a dozen books. joining me in moderating in the debate, peter bergen and tom donnelly of the american enterprise institute. i note that the even today's being live stream on cnn dhaka, and i would note also you can find material related to the event and to the elections on the web site of the three organizations, including the national security guide to the presidential elections on the web site. we will proceed today as follows. each of the campaign representatives will give

opening statements for seven minutes which will be followed by questions from the moderator's and then we will win of the floor to q&a from the audience. with that, let me turn it over to reach for his statement. >> thank you very much. let me thank you you for the invitation to be here and the work that you do on the national security. it's quite a tribute to the organization to get such a big crowd. i understand there is a baseball game going on at the same time. they must be here for the fancy luncheon. but seriously come the briefing papers and the conference is that you do contribute so much to the policy debate. let me also congratulate you on your ascendancy to the presidency of getting many former senate staffers hope for the future and the senate with a distinguished service to the

country. a very proud to be here on behalf of the president's reelection campaign to talk about his record on national security and highlight some of those major differences between the president and governor mitt romney. over the past four years, the president has a strong record on foreign policy and security and he's dealt with foreign crises, taken strong action against those who threaten u.s. interest and have seen the opportunities presented by the space openings in the middle east and beyond. proven himself to be a tough and smart commander in chief and remains steady in the face of adversity. the iraq war has been ended with honor and u.s. forces in afghanistan have begun. a critically important transition iran has never been more isolated and the libyan people have a chance to reclaim their freedom following the

removal of market of the from power. the president has ordered the nation's land defenses. we have redoubled the commitment to america's veterans, stood up for human rights across the globe, supported the democratic reform efforts abroad and ending torture here at home. u.s. security assistance is at an all-time high in the face of a difficult fiscal situation, we have the military on a path to remain the best trained best equipped and best when the fighting force in history. governor mitt romney's foreign policy position and there are many can be tough to follow if you don't keep a close track. he likes to talk about confidence, clarity and resolve and the foreign policy when in fact it's been more confusion, dysfunction and diversion. the reality is that the governor has been searching for the foreign policy narrative and the

position and the world view since the campaign started. his position seemed to bother and we've depending on which the advisers are speaking and where the poll might be going. libya as i can tell the governors had five different positions. the speech they accounted for six. the one definitive step that he did take that held a press conference hours after the death of the u.s. ambassador but before the facts are known and before the families were notified, the governor sent it to the local opening took to the airwaves to condemn the u.s. embassy staff in cairo. he's been trying to play cleanup ever since and monday's speech was no different. in afghanistan, after the complaints and outrage about the presidents timeline for the transition, governor romney did the unthinkable.

he said a timeline for transition which coincidentally happens to track with the present. governor romney said on monday, "on will pursue a real and successful transition to the afghan security forces by the end of 2014. maybe if the model five years real and successful but meet his position so indifferent. on the peace when the governor and private remarks rode out 40% of the public he also came out against the two-stage solution saying, quote, it is going to remain an unsolved policy and, quote, the palestinians were committed to the destruction of israel. yet in monday's speech he claimed he would recommit america to the goal of the democratic policy in the state to call that a flood or a flop would be charitable. when the positions are not shifting, the governor appears either stuck in the past such as when he called russia the number-one geopolitical so far

outside of even the republican mainstream such as when he vehemently opposed the new s.t.a.r.t. treaty that put him at odds with kissinger, scowcroft, president george h. w. bush and the entire senior military leadership. let me just make a few closing comments about some subjects that have been in the news from iran, the arab spring. on iran we hear a lot of saber rattling and increasingly loud rhetoric from the campaign. but when you look at the details position it appears to be the same as the president, crippling sanctions come all options on the table, increased assets in the gulf. the difference is that the president was able to get the allies cooperation that is essential to fully isolate and iran with a tough possible sanction. one adviser said on monday when asked what is different about

the position he said, quote, we disagree with the president's approach to working with allies. given the introduction of international cooperation does anyone really believe he could have gotten the south koreans are the japanese to implement an oil embargo from iran? on the arab spring the governor likes to paint a turmoil with capital burning. he always feels to note the progress of the moderate forces in tunisa and libya and even yemen. we don't know the strategy for the support of the moderate forces. what we get our peace through strength, america must lead, america is exceptional even in the whispers of returning to the dictators of the past. but we get very little detail. we get very little vision of how he would do things differently. we do know that if the congressman ryan's budget was actually implemented, we would

see a 30% reduction in the diplomatic development budget used to support the people the governor said he wants to stand with. finally come on the defense cuts, the biggest strongman the governor set up, he says, quote, president obama's deep and arbitrary cuts for the national defence the would devastate our military. let's all remember that these cuts to the pentagon's growth were part of the budget control and supported by congressman ryan and other republican leaders in congress. congressman even said this is finally the legislation that we have been waiting for. in his proposal for the defense spending would cost some $2 trillion over ten years. that's 2 trillion in additional spending. this is spending the pentagon hasn't asked for and it's also spending that isn't paid for. i know big bird has gotten a lot of attention lately, but that one offset couldn't possibly

have enough for the collection of new ships and truth. but even more troubling there's been no discussion about the strategy is that the increased spending designed to support on the additional funds to support the two front war to combat perhaps the number one geopolitical to engage in long-term stability operations and nation building and the answer is we don't know. the governor's speeches haven't shed any light on the key fundamental questions about security, about america's role in the world, about american power and how we should stand up for the moderate forces for freedom and across the middle east. these are not trick questions. these are fundamental questions about the world, and questions that most americans expect the future commander in chief to have answered and resolved. i look forward to taking your questions. >> thank you very much.

>> thanks very much. my thanks to all three of you -- >> [inaudible] >> let me try again. can you hear me now? [inaudible] [laughter] how about now? actually all i was doing was thanking these guys. i agree they care very much about the country and the role in the world. we differ about how we get there and the differences are deep. i agree with rich on that as well. let me begin with something i know about - come and that is the sequester. we know that mr. panetta, the

secretary of defense, said that it would be a disaster, as it would be. and i would refer you to the chapter. where did that originate? where did that idea come from? it turns out that it can from the white house. it turns out he had a meeting with senator reid and congresswoman pelosi and suggested this. and initially and apparently they were not keen on the idea. now how much does the defense amount to percentage wise in terms of the problem that we as a nation face? if you talk about giving budgetary spending every year, discretionary spending, it is 50%. if you talk about the problem

that includes entitlements, it is 13%. if you want to look at the $55 billion coming out of the sequestered, that works out to about 1.4% of our overall problem. but better than 10% of the defense budget. are you going to tell me that the solution to the national financial problem is cutting defense? and by the way, do you honestly think that the mothers in iran, that the north koreans, but the radical muslims including al qaeda which have been defeated but now it turns out that it's not all behind the attack on our ambassador of benghazi and his colleagues, do you think they pay attention to our budget members of the than hoping they keep on going down?

.. are great friends in egypt, president morsi laid some conditions down in an interview with "the new york times" as to when he will have good relations with the united states? this by a man who is still getting hundreds of millions of dollars of aid from the united states. in england they call it cheating

and in french they call it -- [laughter] we have been behind on the arab spring, all the way from the beginning. we have made a virtue of leading from behind. libya is supposed to be our showpiece and we have had the first ambassador killed in the line of duty since the years of jimmy carter. what does that tell you? we have a president of egypt who basically is thumbing his nose at us. and then there's the relationship with israel which is supposed to be so good that the president of the united states had to say to the president of france over an open microphone would he really thinks about the prime minister of israel, and then when the prime minister of israel says look, we need a credible red line with the iranians, the

president dismisses that as noise. now if you're prime minister you will worry about your country and there are many ways to deal with that, including having some kind of red line or at least arranging with the israelis privately with the red line would be. being credible with the iran into. how can he be credible about sanctions when you let 20 countries off the hook including china and india? those are really credible sanctions and everybody knows that the congressional sanctions are the ones that are forced upon administration, not the other way round. the president finally chimed off the other day on sanctions over past months ago. what do we mean when we are saying we are tough on sanctions or mr. romney is not going to tough. all he has to do to show he is tougher is to close the loopholes that already exists. how do you pay the tuition when

your forces go down and oh by the way if you do pivot to asia that way what will be left in the middle east? how credible will you be with the iranians? anything we do has to be both credible and enforceable. right now our position on iran is neither and now let's look at syria. which has started basically a low-level war with turkey that could really get worse. where are we? our administration sits on its hands. it says well, we don't really know who the good guys are in the army and among the other rebels so we can do very much about it. this is the same intelligence community that told us by the way how close iran is going to be too a bomb. if we don't even know any more open society which is what the theory is right now, who are the good guys and who are the bad guys, how are we going to now when i ran this on the verge of having a bomb, which is exactly

prime minister netanyahu. if they are three weeks away, four weeks away, five weeks away how are you going to now? we don't even check the right intelligence on syria. this is an administration that those about trade and its openness to the world. do you know how many trade agreements we have reached that were started by this administration? oh, and what we want the nationals to do again and their opponents from st. louis pardon me cardinal fans -- i'm an orioles fan. we have started none. we completed three, started by the bush administration, south korea, panama and colombia and that took a lot of polling. do you know how many china has reached in the last four years? nine, five more being negotiated. what does that tell you about our position on trade?

what it really tells you is where the unions are on trade. now, mr. romney doesn't really understand the national relations because he thought what he said about russia. look at the administration's track record on russia. the reset has gone nowhere. the computer has shut down. mr. putin knows only one thing and that is strength. classics czarist policies. if there is strength they will deal with you and if there is weakness they will walk all over you, which is why russia continues to support aside no matter how many people he kills. russia wanted us to walk away from our ballistic missile defense program. we don't want to do that. that was the reason why so many people, myself included, opposed the latest new start because there is too much ambiguity

about that missile defense program. ambiguity does not work with russia. clarity does and ambiguity does it work with anybody. only clarity does and unfortunately, this administration is wonderful with words and look, i will be the last person to deny that president obama is terrific with words, at least when he is giving speeches. but when it comes to actions, we undermine ourselves. we have very little credibility. yes it's true most europeans would post mr. president -- as president of the united states but that is equivalent to most americans love the queen and therefore we should become a monarchy. it is relevant. what is relevant and what this administration has done for our country relative to other countries, relative to our

friends whom we tend to dismiss, and our enemies, who unfortunately we have misled into believing that they can walk all over us. that is why we need a change. we need it now. we needed in the interest of our country. we needed in the interest of the free world. thank you. [applause] >> thank you, dov. now let's begin with some questions to both of the panelists and rich why don't i start with you, to go back to the point about syria the syrian conflict kills more than 20,000 people and has displaced hundreds of thousands of governor romney has called for syrian rebels to help them in their efforts topple the government. why not take more forceful steps? >> i think it's important to know what governor romney actually said in his speech. it was a bit of of the headshake after months of saying that the united states should arm the

syrian rebels. he then took a setback as to who should actually do it in how it would be done. he still doesn't like to answer the questions about what kinds of arms and the risks that they could fall into extremist groups or the rest that they could threaten our ally, israel. the united states has been incredibly engaged and active in syria with rebel forces under the precedence leadership. it's an incredibly difficult situation. we provided logistical support, communication support, worked with our allies, worked with turkey, provided as much humanitarian aid as we can, but anyone who speaks to the u.s. ambassador on this question still the calculation is that providing, support from the united states into the rebel hands at this time would have a very uncertain outcome, so we

are working very hard with the rebel forces and clearly as the president said, assad's days are over and they will eventually come to an end so we need to be ready to support those, provide as much support to the moderate forces as they can in the interim. i do want to, if i can, just say one thing about dov's comments about iran which are related to this issue. he does set up a strawman about the sanctions on iran and the 20 countries that have gotten off the hook. i think it's interesting to note that it does really matter. they ain't iran sanctions as a critical piece of legislation in the '90s to punish iran and for those who supported sip put petroleum.

zero companies for sanctions under the iran sanctions act, zero. when the president came to office he very aggressively moved on sanctions to the existing authorities and he then worked with the congress almost immediately to sign a new comprehensive piece of legislation, of which multiple companies across the world including chinese companies and russian companies had sanctions. the 20 exemptions that dov likes to talk about where a wholly different piece of authority, which granted the presidency the authority to exempt countries have made substantial reductions in their oil imports from iran. south korea in fact cut off their imports. trickery reduce come in the reduced and in fact china reduced. so it was specifically targeted at the banking sector and congress authorize sanctions leaving 20 countries off the hook and in fact we have made

crippling sanctions and when i hear the other side talk about, we are really going to do this on our own, we have had an embargo against iran for 30 years but you do need international cooperation in the and the kind of saber rattling approach we have seen and we have seen that it will not be very effective in constraining the mullahs in iran that we are concerned about. >> can i ask you to respond to the iran point but also the syria plan? what about the weapons falling into the wrong hands and should the u.s. be providing those weapons? >> i don't get it. if we are working with these folks on communications, on logistics, we are working with them everyday and we are engaged with them, why don't we know who the good guys are? i mean, who are we communicating with, the bad guys? are we providing logistics to the bad guys? then we are really. so we must be working with the good guys.

well then why can't we provide them with arms or at least provide the money for them to buy the arms or at least work with other of our arab friends to get the arms to these people. i don't get it. it doesn't add up. either you are engaged or you are not engaged. if you are engaged, you sure as heck that her know who you are engaged with. it doesn't work out terribly well when you get engaged with somebody you don't know. and if you know who they are, why are you helping them out when they are crying out for it? oh assad is going to fall. do you know how long we have been saying that now? how many thousands will it take before assad falls, how many dead, wounded and injured men, women and children? and we are saying he is going to fall. yeah in the long run we are all dead. it does improve a thing. it just highlights the inconsistencies of what the

administration is saying. i couldn't have said it better than the way it was just said. on iran, working with the congress, of course they are working with the congress because they had to. congress forced the sanctions on them and guess there has been a reduction in oil imports but the whole idea of the zero oil imports, that is not happen. and the question is, why not? mr. romney has said, i want to zero out the oil imports. now, the other point, we are going to do it on our own? we never said we were going to do it on our own. on the contrary what mr. romney has said we are going to work with their allies in the way that this administration is not. he doesn't plan to wake up the polish foreign minister in the middle of the night to tell him we just changed their missile-defense plan. he doesn't plan to go in whisper one whispered to the president of france -- with the pain you nowhere. he doesn't plan to turn around to the russian president and

say, just wait, once i have flexibility i can do all kinds of things that i can't do right now. he doesn't plan to stand aside when there is a major green revolution in iran and the united states does nothing. we are supposedly trying to get the mullahs to appeal to what we are looking for and the same time, the very same mullahs know that when there was a real threat to them, we sat on our hands. what does that tell you about her credibility? what does that tell you about our country? >> dov you have written a book and you are the point person at dod on the afghan account during the george w. bush administration. governor romney mentioned of course in 2014 jordan in his monday speech. what he didn't talk about and that was a strategic partnership agreement that the administration has the go shade with the afghan government which

will keep american soldiers in afghanistan until 2024. do you have a sense of what the minimum number of going forward? >> let me clarify a couple of things. there are more than a few administrative folks here who would say that was not the focal point on afghanistan. i was involved but i share the credit with many, many others who probably had more influence than i did. the first i would like to make about afghanistan and the big difference between mr. romney and mr. obama is that mr. obama said the deadline, period. i was in kabul in december of 2009 when mr. obama made that speech, and i was talking to isaf people, the people from the international force, you know the people who are out there getting shot at from other countries, not just our own. to a man and a woman, and there are women there, they have all almost took no notice of the

surge statement. what they noticed was the deadline, and what our pakistani friends have noticed is the deadline. with the taliban has noticed is the deadline and everybody is clinging to that deadline including president karzai quite frankly who has no other choice. what mr. romney has said is, yes, that works as long as the military thinks it works. if you trust the commanders on the ground, and they say they can't be just yet, then you are going to change the plan and the taliban is terrified of that. the last thing they need is to know that the united states may not leave as quickly as they expect. and look what happened in iraq. we didn't work all that hard to make sure there was a sofa

status of forces agreement with iraq and look at iraq today. the man who is trying very hard to become a shia dictator with civil war breaking out again, with al qaeda active not only in iraq but with iraq's neighbors, so how well have we done? that we brought peace and democracy to iraq? are the iraqi people safe? the answer that we know is no. so the differences mr. romney says, and this goes to the question, how many troops? how many troops will the band on pen on the situation on the ground? what you don't want to have is an announcement ahead of time, we will have the x number of troops and for y number of years and let the taliban plan against that. if we announce what we are going to do it's like telegraphing in basketball. the best way to get the other

team the ball is to telegraph the. >> just to follow up on that, the fact that the administration is negotiating an agreement with iraq since 2024 is something that you are personally happy about? >> it depends on the nature of agreement and it depends where the next president of afghanistan with -- upholds. the devil is always in the details. we thought we would have an arrangement where we would have troops in iraq. >> that is because the iraqi parliament would not allow it. >> yeah but that is the whole point. you don't know how things play out until they actually do. i don't know how the afghan parliament will be. i don't know how the president in 2017, the president of afghanistan, will behave. until something is finalized, it's just words. again i come back to my fundamental point, we have had four years of words, big words, little words, words.

we have had a lot of tough -- on the other campaign and it does remind us what we lived through for a ears with a lot of talk with 200,000 troops in the middle east hunkered down, unable to visit asia or anywhere else frankly while the iranian regime was getting stronger spinning centrifuges because we could do nothing else and it seems to me that's exactly the strategy that the governor has headed towards again. war in syria, war in iran, some untold thousands of numbers of troops in iraq and an unlimited presence for who knows when and how many troops in afghanistan? what about that would actually make us safer and stronger in a threat environment is very curious. i think it does have something to do with, as i started, the vision that the governor has.

if your vision of what is happening in in the world is driven by russia and the geostrategic threat and you want to confront china on day one and you want to confront the states, and you want to be hunkered down in the middle east while these transnational threats and substate actors are hitting us very hard, then that is a totally different approach i agree but if you want to see where the president has been which is very aggressive against al qaeda and supporting the democratic moderate forces, doing transitions in afghanistan and iraq frankly to lighten our burden in the middle east so we could move into the front to other threats of the world. it is a more agile, a smarter, tougher and stronger approach. one only has to look at the previous administration. if that is what people want in their security process going forward they can have it again because it sounds like exactly what he is suggesting. >> just to follow up briefly on

that is al qaeda largely defeated? >> no of course not but if you look at the testimony and you look at the testimony or the public comments of john brennan and other at ministry should officials that the core of al qaeda has been decimated. the senior leadership ranks have been decimated. what we have to guard against is the affiliate groups and extremist groups but even the core affiliates in the senior leadership groups of core affiliates have been taken out as well. whether the governor would like to admit it or not, there is a battle taking place across the middle east. it is the battle of ideas. you can't kill and capture your way out of this battle. we have the support the moderate forces and we have to help our allies to beat extremism and he do that through strength and power. you do through that through diplomacy and through development. the governor's approach as far as i can tell us to put everything on the backs of a u.s. soldier and say go get them. we have seen that approach and he likes to bring up iraq. if iraq is really what you want to run on as the signature kind

of way to transact business in the middle east, the governor's free to do that at the fact is i don't think the american people want to replicate that experience again. >> well, i guess we can keep on running against george w. bush forever. but that is not what governor romney is talking about. no they are not the same ideas. lucky governor romney. what has governor romney said about the budget? what does he want to increase? ships. 15 ships a year, three submarines a year. very very different from going into iraq or going into iran. we are convinced that the only way to stop the iranians is not to go and invade a country that large, but to be credible about what you are going to do about your sanctions, about your relationship with the israelis.

win the iranian cs quarreling with the israelis, they conclude we are not going to do anything. when the iranians see us giving people exemptions, i don't care how you want to word it, and exemption is an exemption is an exemption. if it? like one, that looks like one, it looks like one. when they hear those exemptions they conclude weakness. they conclude lack of credibility. that is what we are talking about. we are not a of warmongers. nobody has set to to go invade anybody. quite the contrary and strength as you know the governor reprieves quite frankly was ronald reagan's thing. and ronald reagan didn't go to war with the soviets. he actually was the one that convinced the soviets that it was pointless to go to war with us. to try to out build us. the real issue here is how

credible is the united states going to be? if you want to position -- pivot to asia and cut the defense budget you tell me how those to add that because i can't figure it out. >> let me figure -- follow up on a ram point and ask both of you what should be the ultimate subjective of iran be quick should it be a nonnuclear iran? should be regime change? can we live with his government in iran if it is not pursuing a nuclear weapon? >> the president said that he would not accept iran with a nuclear weapon and there a lot of other issues on the agenda with iran, supporting international terrorism, cracking down on his people and the issues we are most focused on. among many it is the nuclear issue and preventing iran from having a nuclear weapon. now the governor has taken a multitude of positions on my red including agreeing with the president that was exactly the

position that we should take and then changing it and taking a bit of and involvement position on iran. i do want to come back to a couple of things that dov said about defense spending bill and it is interesting that this kind of story about jack lew coming up with this sequester, and i don't think you were in the room for that dov as far as i can tell and it's an interesting, interesting story to tell especially when you go back and if we could just do a google search for the number of republican leaders that stood up for sequester instead what an important tool this is, and no one thinks it should come into effect. i mean it was never supposed to come into effect and frankly the vice presidential candidate, congress men with ryan supported the sequester and the cuts that are so devastating. but you would also agree that

fiscal is important abroad as well in economics and i don't know how an additional $2 trillion in spending on defense that his son pay for with the additional assets you are talking about, that no one in the pentagon has asked for, except her halves the former advisers that now serve on the campaign. it is an amazing thing to pick a number and then build a campaign around it instead of designing a strategy of which you then build a defense philosophy around that. >> well, first on iran, the fact that mr. romney actually agrees that the priority is stopping iran from having a nuclear weapon shows that ultimately both the president obama and mr. romney recognized the threat that iran poses. the issue is, where do you go from there? fine, it's your priority. how do you deal with a? it is no good to say what

president george w. bush may or may not have done eight years ago, seven years ago, six years ago. that is not a prescription for the future. people looking back will get a stiff neck or go the real issue is how do you get the iranians to stop enrichment? if you wait until they are a month away or six weeks away and then say i'm going to rely on my intelligence, i repeat, our intelligence doesn't allow us to pick out who are the good guys in the bad guys in syria. our intelligence doesn't tell us -- actually they did tell us there would be to trouble in libya and egypt but we ignored the intelligence. and that's still coming out. there is a hearing today about it and kennedy is testifying about it. even if we get them it doesn't mean we are going to pay attention to them. how far do you want to risk that? mr. romney is saying i don't take that kind of risk.

i share with the president the concern about iran getting a nuclear weapon, but i'm going to go about preventing that in a very different way. now if you want to talk about the budget, i am perfectly happy to do that. mr. lew is quoted in bob woodward's book. the last time i checked nobody has challenged that, nobody. partly because the white house talked about woodward so how are they going to challenge what they said? the fact is that the president of the united states has that on his hands when it has come to resolving the fiscal crisis. he keeps kicking it over to congress. whether you agree with simpson-bowles or you don't agree with simpson-bowles, this was a group of people that came up with a bipartisan solution. where was the president?

where has the president been on all of this other than saying i'm going to veto any attempt to prevent defense from being included in the sequester. in other words, holding defense hostage with the ideology that we cannot touch entitlement. this sequester goes after -- let me put it this way. 2% of the sequester is invested in -- that works out very nicely if you buy into that ideology. it does not work out very nicely if you're concerned about defense and oh by the way, the $2 trillion spent, we are trying to get to the budget and the last time i checked bob gates wasn't just a republican appointee. >> the seems like a good time to explore the defense issues a little bit more thoroughly and both the budget and -- or the military reforms or the

military changes associated but to begin with the budget, it does seem a little disingenuous to say that these are dollars and programs when as recently as 2011 they were in the obama budget, so they were asked for programs during the obama administration and they have been cut and taken away since the president took power. the second part of that question is, in the jockeying over the sequester, does the commander-in-chief play a fundamentally different role than any of the other actors in the melodrama? does he have a different constitutional set of responsibilities than the others? and finally, four dov, you alluded to the fact that in

dollar terms, the defense increases are relatively modest in comparison to the overall spending reforms that are necessary to reach the governors targeted of 20% of federal spending overall for all federal programs. that probably means a pretty substantial cut in entitlement spending. so, if one is dependent upon the other, how does the governor intend to, within the time and the space of a single administration, make such a substantial and drastic change in government spending? >> so i think this is the place where facts really do matter and you know just to remind people that they subject -- budget is $520 million which is up 34% since 2001.

the notion that somehow this budget, even to compare the base budget of fy13 since 2007 under george h. w. bush, it's gone up considerably and offense will continue to go up under this administration. and it is projected to go up in fy20. the question is, controlling the rate of growth and that is where the congress, congressman ryan, speaker boehner, bipartisan groups all decided that there should be cuts. you know just again some of the facts, you know talk about naval assets. our navy is bigger than the next 13 navies combined and by fy20 we will have 300 ships. that is the projection. again, their plan is in search of a strategy. 60% of those assets will be deployed to the pacific by 2020. the air force is going to have roughly the same amount of planes by 2017 but significantly

more platforms insignificantly more capability. this notion of counting ships that we have had in 1916 versus ships that we haven't 2011 for projected to have in 2020 is slightly ridiculous given the incredible capabilities that are forces that are shipped in the weapons systems now have and the lethality in which they operate. so, you know it's one thing to say, dov says we should listen to the military when it comes to afghanistan but we shouldn't listen to the military when it comes to our budget and we should listen to the military when it comes to the new star. general dempsey said this is not a budget. this is a budget that will support our military needs. he testifies very proudly on behalf of this budget so picking and choosing when you decide to listen to them as a teller is an interesting tactic. >> i will try to answer your

question. obviously there will have to be adjustments to entitlement spending, no question about that. remember mr. romney also believes he is going to be able to stimulate the economy so the economy will grow which means the seats will go up. he is also has also said he is going to deal with tax loopholes and i'm not a tax expert but it seems to me they're an awful lot of those loopholes and that will help and again when we are only talking about essentially 1.4% of the entire problem, it seems it doable to fix it. you can't fix it in one year. you can fix it in four years for sure, so at least i'm trying to answer your question. now i can't just sit back and listen to some of this stuff and be told in a fact, you dov, you just don't know any facts. first of all one little fact. i really wonder whether mr. panetta, who talks about the

smallest number of ships since 1950, sent that in a letter to your former boss, senator mccain, would really be happy to hear that his argument is ridiculous. it wasn't a republican he made that case. it was mr. panetta. number one. number two, the navy is going to be bigger to kasai funded the ships that are being built. it takes a few years to get them out to see. look at the pattern of naval spending and the number of ships over the next few years. the air force, rich was very careful to talk about platforms, not aircraft. why? because he is talking about drones, not just planes. you want to watch this very very carefully. i have not saying rich wasn't giving you the facts. i am saying that it's a reflection of this administration that when it

comes to words there is an awful lot of fancy footwork. finally, defense going up, it's not going up in real terms. it's going up in nominal terms. a big difference. and i come back to the point, why has this administration given its own secretary of defense is concerned, and remember the pentagon follows the commander-in-chief's orders. we are not surprised the general dempsey has said what he has said. that is what chiefs do. nevertheless, the secretary of defense is so agitated that he puts not in a press conference, not in an open mic statement to somebody but in an open letter, his concerns about the sequester and this administration is prepared to hold the fans hostage in order to further its

ideological goals. >> yeah point every administration official has spoken out against the sequester. >> that is my point. >> no one supports the sequester. i think that is a point that you might have lost in the translation. >> i'm not saying that mr. obama supports it but he is prepared to sit in on his hands and sometimes no action is action. >> you are wear that the senate republicans have said his number one goal is to stop the president, the precedence agenda and keep them from being reelected and therefore the notion we are getting the kind of corporation to stop the sequester that you are concerned about is i think a bit of a fictional account. >> on the contrary. look, i don't care what senator mcconnell may or may not have said. for president to stop the sequester come he needs to be

calling people into and to the white house every day. the should this should be his number one concern. and said instead what you are getting is a labor department issuing confusing guidelines about the administration saying they're going to cover contractors if they get sued by their employees and senator mccain saying that's against the law. that is what we are getting. we are getting fancy footwork, not the all-out pressure to get a deal that only the president of the united states can impose. >> perhaps the house chairman of the budget committee who could be a heartbeat away from the presidency also could have again the sequester but in fact he wasn't and in fact spoke out in support of it. >> we have other issues to get to as well. >> wait a minute. argue on jim lehrer? [laughter] >> i know going to comment on that. [laughter] we do have other issues to get to and i know people want to ask

about issues like asia, trade and russian things like that so let's go to the audience now. we have microphones around the room. please raise your hand if you would like to be recognized and state your name and affiliation and make sure you ask a question rather than a long statement. >> my name is meghan and i am with eior. my question is for mr. verma. you said in the beginning of statement that al qaeda has been decimated and you also said, the people of libya are facing a much more free and optimistic situation than they did before the invasion into libya. i just want to raise the specter of something which was already raised earlier which is the recent assassination of our ambassador in benghazi and just a couple of things in my question. just after that general hayden wrote an article pending the responsibility for the security situation which led to the assassination on the precedence invasion of libya, which by the

way did not get congressional approval. number two, on capitol hill today, the tenant colonel what is testifying who was part of the last security team there, who said he recommended increasing security because of the deteriorating situation in benghazi. that didn't happen. he and his team are pulled out in the ambassador himself expressed his own fear and worry that he would be targeted and i could go on and on and on. the point is the administration was forewarned. it would be completely incompetent to say they had no clue that something like this was about to happen, yet, when this did occur susan rice and other spokesman came out and said this was spontaneous and we had no idea and we have to look into it. so my question is, why should the american people, why would it be a better idea for the american people to give this president another four years rather than demanding a criminal investigation into the assassination in what is now being called benghazi --

speak you might have a point of view that you are trying to express in the form of a question. [laughter] where should i began? there is so much to talk about. chris stevens is really an american hero and i think anyone who knew him, and knew what he was trying to do there, would agree with that. he went to benghazi for a reason, because benghazi is really where the battles take place. they are the battles between forces of extremism and forces of moderation. and newsflash, benghazi is a very dangerous place. and he knew that and the state department knew that. and, that is what secretary of the accountability review board, that is why they are doing the investigation to see if the right decisions were taken but let me tell you what happened after the ambassador was killed. tens of thousands of people marched in the streets of

benghazi and they said with signs, chris stevens is our friend. they overran the militias. the president of libya ordered all militias to be said -- shut down. from the premise of your question it sounds as if you would rather have supported gadhafi still being there in the fact without american leadership gadhafi would still be there, and we were a principle part of leading that effort. and we are principle part of ensuring and supporting the moderate forces in libya. now, with regard to the investigation, you know, you can take the threat and you can try to make it into a political matter. hours after a tragedy, after they had already bumbled the press release the night before he decided to go out the next morning and there is something about judgment and temperament.

when even your political adviser forces you out to the podium you might have enough restraint to say no, this is not the right time. we exit don't know the facts and it turned out he actually knew one of the -- on the campaign trial yesterday. had he known facts like that maybe he would have rushed out to the podium and secondly his positions have been everywhere. if you look at at the five or six decisions he has had on libya, i'm not sure what it is people would have done differently. it is critically important we support people like that. our diplomats are at risk every day. they are at risk in various parts of the world and frankly the house republicans budget committee has struck funding many times order. i hope in the course of the investigation that is the point is well. but the judgment calls made by diplomats and made by patriots about the security situation, when the military is not there

with them, and these are very difficult situations, and so i would not prejudge, prejudge the facts until a full investigation is done and frankly everything that has been said thus far has been based on the information available at the time. is a very very difficult situation to get to a place like a nazi on the night of the very tragic attack. i have no doubt that the facts will continue to evolve and as we get more clarity there will be more definitive statements but it sounds like you and the governor and frankly other people would rather make a political case out of it. >> i think that is unfair to the questioner. first of all, the first aid meds were not made by the governor. the first statements were made by the administration official blamed who blamed it on a video. and the american embassy in egypt, which was what the governor was criticizing, had essentially said look, this

video is terrible but we have got to be respectful of all religions although quite frankly, i have not heard the administration come out and say that those who abuse buddhist temples, burns sikh burned sikh temples, abuse jewish history, persecute christians should also be held equally accountable. i have not heard that. this was really a teachable moment by the way. this was a time when mr. obama could have said look, what this video is about is wrong but guess why? there are things that are being done in the muslim world that are also wrong and islamist leaders don't speak out. their leaders don't speak out and their mullahs don't speak out. not loud enough in the corrections ones do but certainly not enough. that is the whole point. it was about al qaeda.

and that has come out. that is coming out in the testimony this morning and it has come out before but the administration did not want to admit it was al qaeda because that would mean we have not destroyed al qaeda. i don't care if it's al qaeda central or al qaeda franchises. that is like saying gee you know mcdonald's isn't really selling hamburgers except in san diego. i don't count the franchises all over the country and all over the world. what difference does it make if it's an al qaeda franchise or an al qaeda central or a terrorist group by some other name? this dancing around the issues is just so frustrating, not for me, not for governor romney, but for the world, for our friends, to those who depend on us. >> further questions. yes sir, right here.

>> i am dave stafford and for 30 years i worked -- and a retired recently. my question goes to this issue of the navy and it does appear to most in this information age, our carriers are far more capable than they were in the industrial but at a different level it seems to me that if you have 10 are laughing carriers you're only going to deploy three or four at a given time so i'm not quite sure what the argument is when you say you need to increase the navy size. the other side says we have got adequate forces. it doesn't seem to jibe if you want to carry them all over the pacific as you pivot the strategy. you are only going to have two or three carriers. could some of you comment on that?

>> as you know very well, anybody who knows the naval forces very well you want to have a carrier in the middle east and it will have five or six to support it. just just run up the numbers. you want to have carriers in the pacific, one carrier stationed in japan so the calculation is now 1.15 carriers and any other carrier in the western pacific will take four to five. how are you going to have two carriers in the western pacific and two more in the indian ocean? and oh by the way what does that mean for the mediterranean? it doesn't add up. it just doesn't add up and that is just the carriers. what about escorts and what about submarines? you just play the numbers. yes, they are more capable. the carriers and ships generally don't fly. the aircraft fly and if you want to have a naval presence, which is what the state department

historically has always called upon whenever there has been a crisis. the ones who say send the carriers are always the diplomats because they know the diplomatic value of the naval forces. if that is what you want, if that is what you need, this administration's program is not going to happen. >> to repeat something i said earlier which is the navy is going to grow under this administration and our navy is already bigger than the next 13 navies combined. we are in track to have 300 ships by fy20. you know, you have to balance that can terms up with the threats are that we are trying to deter and defeat. and you have to have a balanced approach to your defense posture. if you look at the strategies that secretary panetta put out in january 2012 where he listed the areas which were going to be priorities for the,

counterterrorism and regular warfare, cybersecurity, keeping the sea lanes open, countering umv and there are a lot of threats and we are trying to balance that within the fiscal reality. the fact is the capabilities and the technologies on our ship are better than ever before and they are the best in the world and they will remain that way. >> yes sir, right here. >> thanks, good afternoon. i'm patrick wilson and i'm an iraq veteran. i watched with interest the drawdown in iraq very closely, the transition into that period is so so most recently i watched the boxes turn red in afghanistan and forgive me, i'm an infantry battalion and the tenant. [inaudible]

what i see in afghanistan in the most recent reports is, the army has said about the quote ote progress of research in afghanistan and all the boxes are read. my question is if you are looking back to the iraq conflict, if that search had gone as badly as it now appears the search has gone in afghanistan, where would the political fallout be? i am frustrated not about the political but how little discussion there is anywhere about the fact that afghanistan apparently the search they their soldiers have set vice blood and treasure to put there has all been for not. i'm wondering in the the political context what that means for the white house and obviously what governor romney hopes to do about it? >> first let me thank you for your service and i would agree with you there is not enough discussion about these issues, but afghanistan frankly and the troops that we have there. that wasn't enough discussion about what was happening in iraq as well.

it's a very difficult situation in afghanistan it has been well before we got there and it will continue to be a difficult situation. the is -- the fact is what is the strategy to get the government in place in the afghan military where can actually defend itself and where it can weaken the taliban nexus through extremism. and that is exactly what the strategy is built around which is trying to use a combination of force and building of institutions in afghanistan and trying to support civil society and other elements to try to give it the chance. the afghans are very anxious to try to take the lead from the united states which is why these transition plans are so important which apparently there is very little difference and why the strategic partnership agreement that the president entered into it so critical. we do have an enduring interest in having an enduring presence

in afghanistan and the president has made that very clear. i don't think anyone, and you know better than anyone, how difficult this is going to be and how difficult it's been. the question is do we have the right strategy and try to make a political military tools that are required to see this thing through with our isaf partners. so, beyond the transition point at the end of 2014 through different functions supporting the afghan military and security forces the best we can. >> first first of all i agree, thank you for your service. it is really rough to be out there. i know too many people who have come back not in one piece and some who have come back in body bags. so i do thank you. the difficulty is, for those of us who support the governor and as the governor himself has made clear, is coming up with a fixed

deadline, we have sent the wrong signals to our adversaries. now remember, we are constantly being told president bush said we would pull out of iraq as well but there was going to be a sofa, a status of forces agreement. than the white house didn't push very hard or go again, if that that was really important, the president should have been on the phone to maliki every single day. he wasn't. and so, we have got a situation where we were out. yes we have a civilian presence on the ground but you see that that's not doing the job. i don't envy john allen one bed. he has a very tough job as commander out there and he is a brilliant guy and he will do it as well as anybody i know. but, again, how do you deal with the fact that already some of our allies are talking about and have started pulling troops out

because of this deadline? how do you do with the taliban's behavior because of this deadline? the big difference between mr. obama and mr. romney is that mr. romney says he will consult the folks in uniform, which opens the door to the possibility that we are not going to pullout in 2014 if the situation does not warrant it. and if the situation warrants it of course we will pull out. why should we stay one extra day? why should we risk our kids lives one more minute if we can get our? but if our commanders, the general allen's of this world turn around and say, not yet, governor romney is not locked into pulling out. that is a huge difference, and if those boxes continue to be read, as you say then maybe our generals are going to say you need a little more time. >> all right, let's see.

right here. >> i am a political researcher. my question is for both speakers but the opening remark by mr. zakheim saying that you both agree on the objective but the difference is how are we going to go about its? i totally think that describes the situation very well because going back, i mean thinking about the last administration, i think the real agreements from both sides, republican and democrat on the bailout policy, cutting the budget despite the fact that the majority of american citizens are going under. also the continuation of war policies which you are debating

here, but for different reasons, different ways that war has continued under both democratic and republican presidents and also i will reference the cover-up of 9/11. george bush, the president, covered up the 9/11 document on saudi arabia. >> can you state your question? >> yeah sure, and the cover-up of 9/11 just happened to my question is, okay it seems to me that both parties have agreed upon an objective but my question is, what is really the objective here? i don't think it's to bring down our nation. and i really think if we agree to bring back our nation, there are some policies that are just a no-brainer, glass-steagall. what is the objective and i want the speakers to address that. >> let's take one more question.

>> it was very interesting during the 08 campaign, the president said then candidate obama, said we when he defended the of the war in iraq and win the war in afghanistan. that is the one we have got to win but as soon as he came into office he went from the narrative of winning the war in afghanistan to ending the war in afghanistan. can you tell me where this policy shift went from winning? when you start talking about your object is offending a war and winning a war, it appears to me that it sends a message not only to our adversaries but her friends that we are not serious about it so if you could address that it would be very helpful. >> thank you for your many years of service as well. look, the fact is the afghan campaign has gone on for 11 or 12 years, and it was very important in the precedence mind

to set a transition point to focus the afghanis on taking responsibility, or else it would be a perpetual state of affairs where we could have 100,000 troops there and provide security in definitely. that is not what the american people want or expect and frankly it's not in our long-term national security interest to have that number of troops bogged down there when we can train an afghan force to do the job. it is their country and they are a sovereign country and they need to do the job. as i said i think it's very important and i'm sure you know that the strategic partnership agreement does not suggest absence of the united states. infected suggest just the opposite. is a just and enduring partnership, and enduring relationship with security responsibilities. ..

totally different situation. bye saying as well we are getting out by day seven and he created the mess we are in in my view. now you are absolutely right. we agree on the national security objectives of the country. this is a race on the battle. we both agree we've got to fight terrorism. we both agree that we have interests and allies abroad and

both agree it should be the path forward and we both agree we need to provide the best for our troops. and we both agree that there is no 9/11 conspiracy. i don't know where you came up with that paper but let me tell you i'm sure they will see what people say about it. the biggest problem we have are those folks like you it's not me, it's not him, it's not the president, not the government. a responsible person is involved in any 9/11 conspiracy and it's an insult to the leaders of the country to say that, and i am sorry to bang on you, but i have to tell you that it's an insult to the dead as well. [applause] >> this lady right here.

>> i'm the director of the foundation nonprofit dedicated to building the military divide. my question is for anybody on the panel. we on the country have basically out outsourced two wars and i don't think that this is an awkward question all the way to have skin and the game. we have done a good job at doing what you have asked us to do. what every party has asked us to do. my question is in regards to national service in general. is this not something any candidate will ever take? you don't necessarily have to wear a uniform to serve but they are pretty tired after doing this for ten years with so few of us and we are talking about the different budgets going up, going down, but in the end it seems like if they had a skin in

the game i just really wish both of the candidates would address this issue of national service so that we can all feel like we've been at war because it doesn't feel like that to us. >> i can't speak for the governor on this. i speak personally. i've sat in my country for about 15 years, cannot. i have strong ties with my country right now, not in uniform but on the hill. they could make at least five times as much. another son served the town and was very hard trying to keep our family together while you are serving on the city council. i totally agree with you that we all need to play a part in serving our country. it starts i think with people

like yourself speaking out more. i think we need to -- again i am speaking personally. we need to get more and more people to be conscious of the fact that he's right. ask not what your country can do for you, ask what you can do for your country. sometimes democrats are right. [laughter] >> we should end in there. [applause] >> i said sometimes. >> so, i would say that you're point is a very important one, and i certainly personally would hope that anybody that is watching this his attention to your concerns because being a military wife is no less easy than serving in the military. i've been working with of the military for more than 45 years. i have friends that have lost

their husbands come had to bring up kids on their own and they spend months on end paying the bills, dealing with the kids and the car pool, taking care of the house, working the job, 24/7, there is no end. and then god forbid if somebody comes home without an arlan, leggitt, i did this the sixth arm, leg, eye, what ever. you've got 100% support. >> thank you again for your family service and i echo everything that was said. and, you know, the president has taken every opportunity to support the military to meet with military veterans those that returned and those that are there. i think it raises a larger question, however, and it's about what we ask our military to do.

and i did -- i don't what to put words in your mouth but i think those kind of a part of your question which is used on a lot over the last decade and people are now after me to do more that the kind of know what it's like to pick up and leave for a year and leave spouses and i think that is a difference between the two approaches in the foreign policy and defense and let me try to explain in this way in the president's approach is about using all elements of power, diplomatic, using our development tools, using homeland security, using advanced technologies that we don't think that every solution, every problem has a military solution attached to it. and i do think that is a difference in the speech and a difference in the budget priorities and a difference in

the rhetoric and it's a difference frankly in the budget congressman ryan put together, and i know they take a lot of false and deliberation that went into his national security blueprint for america the the military is going to solve all of our national security problems and that was the approach of the previous administration. i am not looking back. what i am doing is seizing upon the deal that has been brought forward by the team, and i think there is a difference and i think that is exactly what happened in the prior eight years. we put the burden on the country's security on the backs of men and women in uniform without looking at other tools in the american power and i think the president's approach is more balanced. >> i think frankly if you follow the president's approach and cut the defense you are going to wind up going to war more often.

you don't go to the war when people think you're strong you go when you think people are weak. if you look at president reagan and the buildup of president clinton they were involved in the skirmishes but we were not involved in long-term wars. i would argue not using a report on the contrary that is why he is concerned about the loopholes in the sanctions for example, precisely because he says let's use the tools we've got and avoided having to use the military more than we need to and frankly avoid having to use them at all if we can get away with it but you are not going to convince your enemy if you are weak. why did north korea attack south korea in 1950? because we announced that south korea was outside of our security perimeter and by the way, we cut off forces by a

tremendous percentage and the north koreans concluded we were not interested. why and what they invaded the falkland islands in the 80's? because the bullets cut back on their forces. cutting back on your strength is the same thing you want to of late trade >> right back here. >> i was wondering if each of you could comment on the threat that you see the u.s. facing from bioterrorism and what if anything you should be doing to counter that threat. >> i will talk from personal experience. i was on the weapons of mass destruction commission to prevent terrorism and the commission and the shocking conclusion that the commission found is in bioterrorism was

actually greater in terms of the short-term threat than even the chemical weapons and so the recommendations that came out is the president adopted many of them securing facilities are a world that produced by a toxins. there is an effort on securing biological weapons and precursors and it's a big issue and a serious issue and i think the administration has taken as seriously but make no mistake is a very serious issue. >> i would simply say that one of the conclusions is that we haven't done enough and i don't think the program reflects we've done enough. we need to do more and there is a consensus on that. >> we have time for one last question and we will go to the gentleman right here in the front.

>> first of, thank you for inviting us into the great a group of people use the together today. i am a former nsa request and u.s. air force linguist. i served my country for quite a long time. i will tell you the country needs a big reality check. it is very disingenuous to say that ronald reagan was a peaceful president. he fought the war that i covered recklessly against iran and other i covered closely was the best way to fight your enemies to use an enemy and that is what we did with saddam and the folks in afghanistan and pakistan. we fought the russians for ten years as also that it's very disingenuous. my question is how can we continue to survive in this country. in my lifetime -- and 52 years of this year and we've murdered people in this world, we lost less than one under the thousand in battle.

the 8,000 were in vietnam. the fact is we are far more in war in dinham aver on the nation. we've killed more people and we've done terrible things around the world and i feel that is disingenuous to sit in front of a crowd and mislead them about the kind of nation that we have become. we have got more weapons of mass destruction, we provided much of that in the etds to saddam hussein. the reason we didn't find weapons of mass destruction this because the had stamped made in the u.s.a. and we destroyed them. that's a fact. >> you might want to wrap up any comments you want to make as we go to you and we can start in the reverse order that we start with. >> anybody can follow their opinion. you may have been in the middle of shipping gas and in the middle of killing 25 million people. that's not the country i know

and it's not the country that i've served. i would say this it's true we supplied the afghan rebels, no doubt about it. if we help saddam hussein against the yen iranians, he was doing the fighting. so i stand by what i said. we sent troops into grenada. wasn't exactly a 10-year-old battle. i stand by what i said about mr. reagan. i don't believe we are the evil empire and i really do believe that our country, whoever is president, has his heart in the right place and i will give you the proof of the putting whether mr. obama is present to that president, mr. romney as president, i don't see people migrating out of this country. they want to come here.

if we were so terrible, they would be going to russia and china and god knows where else. but since the 18th century coming your ancestors, my ancestors, his ancestors come everybody here's ancestors have been coming here. we are a great country, not at about one -- not a bad one. [applause] let me thank you again for the opportunity to read i just think -- look, am very proud to be here because i think the record over the last four years on foreign policy and security is a good one and there are real differences. i think you've heard many of them to the end of the question is what kind of vision to we want for the future and who is best suited to keep america's secure? the president said that as his number one responsibility to keep the american people safe and secure. i do think the more comprehensive approach that the president has laid forward using

all of the tools and american power working with our allies rebuilding the international institutions and alliances and ultimately asking what the u.s. general-interest and protecting the country the president has a strong record on that front, and i think, you know, i'm not going to rehash what we just covered over the last 90 minutes but i do think there are differences and i think as the president has a very strong record and the governor would take us back to a place where we have less from. >> thank you, rich and the representing the candidates. thank you all of you for coming in, and peter and please join me in thanking the representatives for being here today. [applause]

at today's white house

briefing spokesman jay carney have questions regarding both last night's vice presidential debate and the ongoing investigation into the terrorist attack against the u.s. consulate in benghazi. the next portion of today's briefing runs about 20 minutes. >> good afternoon, everyone. still morning, rather. good morning. thanks for being here. before we start, i just thought i'd say, if i might, in what you could consider a point of personal privilege, setting aside assessments of winners and losers, as someone who worked with the vice president for two years and traveled with him are not of the country and the world, i took extreme pleasure in watching the debate last night because of the way that he demonstrated his passion and his wisdom and the joy that he brings to the job of serving the american people was vice president, and of working with

this president to bring about positive change for the middle class and for this country. i thought he presented a remarkably strong case for the policies that this president has put in place and the policies that he believes are the right ones to move the country forward. it was -- it capped off for me what was an extraordinary day because i had the distinct pleasure of bringing of my son for his birthday to the nationals yesterday. that's why i was not traveling and i have to save that was a burly and finished a great game. way to go, nats. with that i will take your questions. as a matter what to ask about libya and the vice president's response yesterday in the debate. martha mentioned to him that u.s. officials in libya had asked for more security there

and the vice president replied well, we weren't told they wanted more security there. we did not know they wanted more security again. that wasn't the testimony of the oversight hearing on charline lanham conceded that she had refused requests for more security. as i am wondering what did the vice president and? what did he mean we have? did he mean the administration or the white house? >> he was speaking directly for himself and for the president. heme in the white house. in over four hours of testimony, the testimony that you just referenced the other day, no one who testified about this matter suggested that requests for additional security were made to the president of the white house. these issues appropriately better handled by the security professionals at the state department. and that's what he was talking about. again if you look at the testimony, four plus hours about it. there was no discussion of request for personnel made here could get those are things i think are handled by security personnel at the state department. so that, i think -- it is very

clear if you look at it in context in terms of the vice president was responding to. islamic after that testimony, it would seem that he could have at least conceded that -- >> i think that the attack by, in what has largely been a political wedtech by republicans and in this case by congressman ryan was to try to suggest that the president and the white house was responsible for assessing security and diplomatic facility in benghazi kind as is of course appropriate, these kinds of issues are handled in the state department by security professionals. and i think that's the context of this conversation. >> if i could follow up with a broad context. the argument given for rejecting and expanding security from the state department was a desire to turn over security to the libyan forces. that is why year to rely on the national security forces is one that the administration has used for withdrawing from iraq and preparing to withdraw from

afghanistan in 2014. given the incident in libya, given the green on blue attacks in afghanistan, does this give you pause, does it give the president paz? does it make you consider whether the sole motivation here should be to withdraw troops even though the security impact could be upon our own people? >> well, there are a variety of issue areas that that question touches upon, and let me get first to this point. as i said the other day, there is no question that on a diplomatic security in benghazi that resulted in the death the mystery that there was not adequate security to protect the americans that's what the president and secretary of state acted quickly to take action to insure our deployment personnel around the world were protected

and why the secretary of state of the president's traction created an accountability review board that would assess and investigate these very issues regarding security, a diplomatic facilities. secondly, this president is very concerned about the safety and security of the personnel around the world. one way to measure that is in the budget priorities he's put forward in his budget and what he has done is fought every year to restore funding to diplomatic security that has been slashed by republicans in the house including congressman ryan. so, i think going back to last night's debate and how, ryan has consistently reported and offered a budget that slashed spending for the planet security and he now takes a different

position on these matters. and the aftermath that is part of an effort to publicize what should not be politicized. this is obviously a tragedy, and it is an incident that is under investigation both by the fbi and when it comes to diplomatic security and security by diplomatic facilities by the accountability review board established by senator quentin. as a matter of policy that was discussed in the the lightning way in this debate and when it comes to afghanistan the president working with countless allies has established a policy to draw down our forces in afghanistan event to end that war by 2014 that is not the policy and this president has committed to bringing our forces

that come from afghanistan of setting a deadline is to make it clear to the government in kabul as it was made clear to the government in baghdad and iraq and they will begin to take increasing responsibility for their own securities so that when it comes to fighting and sometimes dying for the sake of afghan for afghanistan the people that the afghan forces to on that responsibility and that is why we're joined on the forces there. the president is very committed to this. he made clear in the campaign for president in 2008 that he would end of the war in iraq. he did. he's made clear he would refocus the attention of was the neglected war in afghanistan and

refocus our mission on al qaeda and in the senate in our al qaeda leadership in afghanistan and pakistan. he has and he has made it clear that this is not a war without end we will insert american forces to do the job that should be done once they are trained by afghan forces and he's happy to have that debate made for television phrasing. basically he doesn't make those assessments. there are thousands of diplomatic forces around the world. there are countless as the levees around the world, and i am saying that when it comes to the number of personnel who are in place at consulates and embassies and other diplomatic facilities around the world, those decisions are appropriately made at the state

department by security personnel. when it comes to funding, yes, this president fights to make sure that embassy security and diplomatic security is adequately funded, make sure that the funding is restored when efforts on capitol hill are made -- principally by house republicans, including congressman ryan -- to slash it in order to cut taxes for the wealthiest 2% in this country. you bet, that's the president's responsibility and he has demonstrated that he's kept that responsibility. >> to be cleared you are saying from the podium the president and vice president have never been briefed about the fact that security, more security was needed in benghazi. you're saying never in the presidential briefing, never briefed. >> what i'm saying is that matters of security personnel are appropriately discussed and decided upon at the state department by those responsible for it. obviously, it is the case that everyone responsible for national security in this

administration are those i believe who are knowledgeable about on capitol hill have long been aware of the fact that libya is a dangerous place, in particular -- >> so then why did the vice presidency that he had the president were not briefed, if you're saying that -- >> what you are doing, and come and i know your conscious of it, is actually saying something that was not said last night. with the vice president said was that -- >> we weren't told they wanted more security there is what he said. >> and he's talking about -- >> he was never briefed. he was never briefed a lot more security was needed. >> there was a four and a half hour public hearing where the issues, the jury specifics for the request for security personnel were made, word adjudicated at the state department. unless you were listening to another reading that i wasn't -- >> there was no -- >> but shouldn't it be clear it was never in the daily briefing or anything like that? >> i'm not going to sit and talk to you about this -- no, i'm not pity i'm saying that matters of how many personnel are assigned

to the embassies and consulates and other diplomatic as these are not decided that the white house. they are decided at the state department. >> okay. and so, then on september 10th, you put out a press release that said that the president, himself, was briefed -- not the state department -- the president was briefed about consulates and other installations around the world come and the security posture ahead of the 9/11 anniversary. so are you now also saying that in that briefing the president was not told about security problems at benghazi, a consulate that had been targeted? he was not briefed that day? >> no action of all intelligence would suggest that it would be an attack at the benghazi facility. absolutely categorically that is the fact. >> this is the consulate there was targeted several times. he wasn't told a day before the anniversary in advance of which this administration just like the previous administration took action to prepare for the

potential acts against the united states or allies that might take place as part of the anniversary of the attacks in 2001. what i can say is there was no actionable intelligence indicating there would be attacked at the benghazi facility. what i'm asking is what will intelligence -- >> by understand that distinction >> but you're saying the president on 9/10 was not told broadly at the consulate in benghazi being targeted several times, they're being problems, the investor wanting more security? he wasn't told about any of that? >> again, i cannot get into the specific details on a classified briefing in a classified document. what i can tell you is he was not told. >> what i'm saying is there was no actionable intelligence, and i think that is pretty clear what i am saying and i cannot discuss in detail.

it's covert rather classified information. there was no actionable intelligence regarding the speed facility. understand the effort here to politicize this and to turn this into an issue in the campaign. .. smith says politics, the mother of john smith told cnn a few months ago that he doesn't feel

the administration is getting to the bottom of things. i don't think she is making politics out of this. she just wants to know what happened to her son? >> no one wants to know more than the president of the united states. rather than speculate and hypothesize that take political shots on tv this president says make sure the cia i -- the fbi is investigating and state of the accountability review board to assess what happened in terms of security posture in benghazi. that is under way. as the secretary of state said moments ago, what has always been the case is we have been transparent about what we know and made clear that the hours and days and weeks passed by and more attacks came to light and more ridgefield -- reveals reinvestigate and underway, we gained a clear picture what happened and what did not happen and we have been transparent about that. from the beginning what we have seen unfortunately because this is not our tradition, an effort

by some to turn this into a partisan fight. that is a shame, when we are talking about brave men and women in our diplomatic service who serve democrats and republicans, who represent the united states, the american people and america's interests abroad, often in very different -- dangerous parts of the world's, and that is sometimes forgotten by many because much attention is paid to our men and women in uniform who are in dangerous parts of the world but the fact is we have a lot of civilian personnel in places like libya and afghanistan and iraq and other regions of the world where there is risk involved in serving your country and representing america's interest and the president is focused on finding it is responsible and bringing them to

justice, investigating what happened and taking appropriate action to ensure it does not happen again. >> on the subject of benghazi, the officials, former libya security chief all testified that request was made for additional security for the -- even been of the -- ignored. i want to clarify, those requests never made their way to the white house. >> thousands of facilities around the country are not adjudicated at the white house. they are decided at the state department appropriately and estate department has to make assessments and this is under review by the accountability review board and that process

should be allowed to continue and not be prejudge but it is certainly not the case that assignment of security personnel at diplomatic facilities is made at the white house, nor should it be. what is the case is if the president sets his priorities in his budget, the president has set levels of funding for diplomatic security in his budget that have been routinely cut by republicans especially in the house so i find it ridge that charges are made about concern over diplomatic security by those who routinely cut funding for diplomatic security to pay for tax cuts. >> this is all under investigation and review but what i think is obvious to anybody who understands how this

works, requests for additional security are not made for the white house that diplomatic security but at the state department which is where the appropriate security personnel approve these requests. >> the vice president's comments were widely interpreted as saying the administration was absolve the. we were not told. [talking over each other] >> the vice president was speaking about himself and the president's hand white house. he was not referring to the administration. clearly since there was a public hearing for 4-1/2 hours when it was discussed openly by individuals working at the state department request that were made. obviously was referring -- not talking about the administration at large but talking about the president in the white house. >> the rest of us made a much more aggressive and expressive presentation of the

administration and the obama campaign's view yesterday and his debate performance which is much better than the president in his past debate. what if any lessons does the president take away from having watched that debate? what kind of changes in preparation and williamsburg can we expect will change to reflect the approach? >> let me say a couple things. questions about campaign strategy, debate preparation, more appropriately addressed to my colleagues on the campaign. i can tell you the president watched the debate last night, thought the vice president did an excellent job presenting this administration's case, this president's case and the vice president's case why we need to continue to move forward, why we need to make decisions about our economic policy that allows the economy to grow from the middle

out instead of from the top down. and why we have taken the actions we have an need to continue to take the actions we have to enhanced america's national security interests around the world. the president watched the debate on air force 1 with a number of staff traveling with including joshua and i think he spoke to reporters afterwards and made clear he was very pleased with the vice president's presentation last night. this is about, without getting into campaign strategy, this is about very serious issues of public policy. very serious matters about. leases we make in budget priorities and we were just talking about one of them.

the president believes, as the vice president made clear yesterday, that we cannot afford to put back in place the policies that helped precipitate the worst financial crisis in our history at least since the great depression. we cannot afford to raise taxes on the middle class to give tax cuts to millionaires and billionaires. we can't afford our seniors and future seniors cannot afford to have their health security undermined by a system that would turn medicare, one of the greatest accomplishments for older americans in the history of the country into a voucher system that puts seniors at the mercy of insurance companies. this president will not do that. i am confident that he will make that case when he has the

opportunity to go before the american people in a debate next week and feels the vice president made the case well last night. >> president obama and mitt romney meet tuesday night for a town hall debate and this weekend c-span looks back at some past presidential town hall debates. saturday at 7:00 eastern barack obama and john mccain from four years ago. 8:35 george w. bush and al gore in 2000. at 10:10 saturday night the first presidential town hall debate in 1992 with bill clinton, george bush and ross perot. >> he would never tell anybody whether he was going to use nuclear weapons. why is this important? in the 1950s nuclear-weapons work pretty new and we threatened to use them at various stages but nobody ever knew whether he was serious or

not, whether he meant it and to be credible as a deterrent you have to be credible. ike never told anybody. i was fascinated by that notion. talk about the loneliness of command, the use of nuclear weapons. what could be a greater command decisions and that? here was a guy who ran the allied invasion in world war ii and now he is president and has an even greater level of responsibility at a time when nuclear-weapons our new. we have not just one or two but building a whole arsenal of tactical nuclear weapons, h bombs. are we going to use these things or not? ike use them as a tool. he embraced this unusable weapon as a full to avoid any war. >> evan, i's bluff on q&a on

c-span. >> former treasury secretary lawrence summers spoke at the center for american progress and called for an extension of the payroll tax cut and said mitt romney's budget plan is, quote, voodoo economics. he was introduced for the center for american progress president neera tanden. >> good afternoon. my name is neera tanden and i am president of the center for american progress and we are excited to host larry summers today who will give a brief introduction where obviously had quite an electric career. he got a degree in economics from harvard at the age of 28, and was the youngest tenured professor in harvard history. he also was awarded the john clark medal which is given for outstanding for being an

outstanding american economy spender 40. during the quintin administration he served in the treasury department. in 1995 he was made treasury secretary by bob rubin and 1999 was confirmed as secretary of the treasury and went to harvard as president for six years and

remember it a particular meeting, deciding the concourse levels of the health care bill and how many people it would cover and fifth in that room which had all the top advisers, larry was an advocate for it legislation that would cover a larger number of americans. he was arguing that this is a unique challenge the united states faced and unique opportunity, the fact that fifty million americans don't have coverage was an abomination and we could really rise to the challenge and at the time his actual words to the rumor if not now, when? i had to say that if i had to think back on and the first

person to use the 60s protest expression in the roosevelt room would be larry lawrence but it turned out to be the teen advocate and the form was events in part because of his great leadership. with that i would like to introduce larry. [applause] >> thank you very much, neera. it is a great pleasure to be here at cap and to see so many friends in the audience. my joy being at cap and seeing so many friends is matched by my joy of talking about this moment in the u.s. economy and this moment in the global economy,

which i regard as a critical juncture, not for reasons i will be clear on, all together a happy juncture. i have counterintuitive we given a discussion that takes place in washington, chosen to entitle my talk beyond the fiscal cliff. perhaps a chance to return in the discussion to the fiscal cliff. i have chosen to entitle my talk beyond the fiscal cliff to underscore the fact that even if is in the most successful fashion imaginable, we will still have critical problems. it is extraordinarily important that we not fall over the fiscal cliff. if all of the fiscal stimulus

currently in training were to be withdrawn, the consequence for the u.s. economy will almost certainly be a recession. consequence to the global economy would almost certainly be a major slowdown and the path to recovery would not be altogether clear. it is essential that we avoid falling over that cliff. equally, it is essential at at some point before too long, the nation put in place a long-term plan in which our debts are measured with our incomes rather than exploding. with our incomes. it is important, i would dare say, to recognize that this is

for economic growth a defense to issue rather than an offensive issue. if we fail, if interest rates spike, if the nation's credit worthiness were to come into question, the consequences could make what we have been through look small. there is no question about the urgency of putting in place long-term framework in which spending as revenue connection are in balance with each other so that the debts do not explode. there have been moments in the past when it was plausible to suppose that the establishment of such a framework would itself be a substantial spur to

economic growth. since the position was reasonable, even compelling in 1993, when investment was constrained by high capital costs, when interest rates were high, when there was the realistic prospect that substantial deficit reduction would be associated with a substantial reduction in interest rates that would push the economy forward at a more rapid pace, and indeed in a very important part of the economic growth of the 1990s, can properly be attributed to the unlocking of economic energy that was achieved by the 1993 budget measures that led to a reduction in interest rates and increased investments, accelerating growth, lower capital costs, further improvement in the deficit and

so forth. that approach of fiscal consolidation lead to substantial growth was a plausible and compelling vision for the country in 1993. it had been a plausible and compelling division for other countries at other times and places. you cannot fall very far. from the basement. with interest rates at 1.7% for ten years, with real interest rates at a level where if you want to put your money or store your money with the government for as much as 20 years, you have to pay them for the privilege of having them hold up your money if they are going to give you back inflation. in such an environment the reduction in investments that can possibly take place and

interest rates that can possibly take place is limited. the impact of the amount of increased investment that could plausibly come from a reduction in interest rates from 1.7 to 1.3 is questionable and the quality of the investments that businesses will not undertake with capital costs of 1.7% but choose to undertake with capital costs 1.3% is to put it politely speculative. for all of these reasons, as important as fiscal consolidation is coming as a precautionary measure to reduce the risk of substantial damage to our economy, it cannot be

supposed that it independently constitutes a growth strategy going forward. we need in the united states, we need in the world economy, a growth strategy. the history of aftermath of financial crisis as it has been reviewed by the imf and other international organizations is not a happy one. the most dramatic example, when i came to the treasury department in 1993, not too long after the nikkei bubble had burst in japan, it was the matter of debate among the, doesn't, what the expected

growth rate of the japanese economy was over a the long-term. consensus view was that it was about 4%. pessimists thought the growth rate recognizing demography and the like was 2.5 to 3%. over the subsequent 20 years growth rate has averaged slightly less than 1%. to put the point a different way, japanese gdp is somewhere between 25% and 50% lower today than we would have imagined likely on the basis of the economic analysis of available. in the same way, perhaps even more troubling, it is instructive to consider what a

history of the united states would have looked like if hitler had not come along, if the national security threat of the late 30s and ultimately the second world war had not come along. the unemployment rate officially reported was higher on election day in 1940 than it has been at any point during the great recession. historians are not in doubt that absent world war ii the nation would not have elected a progressive president in 1940. whether the economy would all timidly have recovered was a proposition that was very much in doubt. there is not much to support the

view that the properties of the economy to return to what was previously judged their potential in the wake of financial crisis is something that is very strong. there has been, i have noticed, a tendency in economic forecasts both for the united states and for the global economy, for some years, the forecast that this year won't be great but well short of potential, in the future it will get better and growth will decelerate. and yet for neither the americans nor the global economy has the reality been of accelerating growth over the last two years. has if anything been a decelerating growth in

significant part because of the force unfortunate and -- to support demand that have taken place. moreover, each year in which unemployment remains high and growth remains inadequate is a year in which cyclical problems harden into a structural problems. cyclical problems are in into cyclical problems in a number of ways. most obviously there is reduced capital investment which reduces the economy's potential to produce in the future. r&d budgets and investments in equity are always the first to be cut back by major corporations in times of difficulty. experience suggests that those who do not work after a career of work for two years have a

substantial chance of never working again and withdrawing from the labour force, rapid labour force withdrawal has been a hallmark of recent years. experience also suggests the data which one could have studied nearly as well without the assets of the data in economics in recent years are really sobering. of course it is much harder to find a job when you graduate from college or high school in a year like this one than it is in a year when the economy is strong. what we have now discovered using the longitudinal information available for social security administration is those who graduated in 1992 are behind in their careers on low-wage calfs with less opportunity,

making less contribution to the economy and shorter life expectancy as those who graduated 30 years ago. worse off today than those who graduated little earlier for a leader at times that were better. it stunts the growth of young people as they enter a career. for those who are concerned, and rightly concerned with the accumulation of the dead, i suggest to you the most important determinant of the debt to gdp ratio of the united states a decade from now will not be any action that the congress does or does not undertake over the next year, but will instead be the rate of growth that we are able to

sustain over the next decade. the stakes in a 1% difference in the growth rate sustained over an entire decade exceed for the debt to gdp ratio the stake in parent in even sweeping comprehensive measures for reducing the deficit such as those that were subjected by simpson-bowles. i am under no illusion that the maintenance or achievement of rapid economic growth is sufficient to address issues of equity and debt. the experience of the american economy in the 1990s demonstrates you can have rising inequity even as you have rapid economic growth. but of this i am nearly certain:

without rapid growth, without growth in excess of potential, there is no realistic prospect of alleviating the squeeze on those with middle incomes, without a rapidly expanding economy, there is no realistic prospect of substantial improvement in our achievement of equality of opportunity. i have lived and watched this in small metaphor, right near me. harvard has a bookstore, a large bookstore in harvard square. in the 90s when the economy is very strong and the unemployment rate is low and it is hard to find people to work, they send