sandy and write about them as if they are invisible, as if they are props. so, you know, i'm not as hopeful as, you know, the future of the discussion of race. because i don't think there is enough biological, social cultural, social political diversity within even our races. the people that are writing about us within are a -- latino, i don't think there's enough diversity within our groups to have a they are -- thorough and thoughtful discussion. >> maybe you can speak about asian-americans or everybody. >> that's my goal. [laughter] >> that's right. everybody like has, you know, has a hash hashtag. >> i have mongolian birthmark. >> yeah. you speak for -- yeah. >> talk about what you found out from the dna evidence, you can

multitask. >> yes. we can switch your tag. >> i got everybody. >> just how do we, i mean, i think part of the struggle is that we did have, like, black, white, asian, latino, native american, and now finally teasing out of people's country of origin, how that affects, you know, like the korean-american community is different than the many different communities within chinese-american communities, different, you know, all of these cultural differences. will we get to the point where we can understand the nuance and what will it take for us to get there? >> well, a side note on the illegal immigrant thing. i know, it's taking us back a step. you mentioned native americans and every time i see the word illegal immigrant think i'm sure native americans have a different perspective of what "illegal immigrant "is.

it speaks to where we are as a culture. they are terms of art. they are term of the moment. they are snapshot of what the context we live in calls certain things from the perspective of whatever the dominant establishment is. whoever is at the top of the social economy food chain at the current moment. and what i think is -- when we talk about journalists, especially i'm not a subscriber to the, you know, notion of the journalist as pellet as the gate keeper of truth and so forth. but i do believe that journalists have a specific responsibility and specific capability of at least, you know, having really, really good bs filters. right? which means so you to be diverse. you have to have a i diverse group of people to speak with you're not certain so you it right. the sense of skepticism, the sense of being able to tell when even if you are not of a story

"barack obama: the story" isn't quite right blarng blank we're starting to lose a little bit in the pace of news we have gotten to. and that, i think, is where we are right now. especially with the coverage of race. i don't think that question survive as an industry if we try to say that the only way that people can cover a certain thing is if they are a -- have a certain background, a certain specific context to which to speak. that is what journalism is about. it's about telling stories that matter to a broad array of people. not purely one to one customized perspective. at the same time, i think that the take away from this is that in the discomfort zone for journal toifm evolve it needs to incorporate different types of journalism. there isn't this seemless standard of journalism that fits all occasion and the people making judgments especially need to be able to filter and

appropriately allocate resources and deliver and distribute news to the right channel based on not just the understanding of what news is now but what news is becoming, i guess. >> gene? >> this is sort of quick round up. i probably attach a little more importance to the ap change. it becomes better late than never. it matters because it set acetone right from the start when you read the story. although i think i understand to some degree to i don't know -- you know, where were you fifty years ago. in term of the language, i'm reminded we -- george caroline from the art festival and he choose to do the wonderful riff on language and identifiers and which he posed the question of what do you call a white person

from south african that immigrates to the united. an african-american. he did a whole thing on that. he pointed out the inhavehave a -- invalidity. >> it means whatever we make it. >> i hope that we increasingly see that being diminished in our society. looking more at people from the journalistic standpoint and really the election -- selection. i think you put your finger on the next challenge. the people making the decision about resources is -- are they waking up? are they suddenly realizing this new world that is out there? maybe it's been there. which increasingly is going to be in their face. if only to frankly to monotize the product to push seas, do circulation -- when they say it's the right thing to do but

also it's the economic thing do. and i keep waiting for that. maybe we are approaching it step by step. at one point we have to recognize this the diverse aspect of our society in ways we have never done before. >> i'm going to go to questions soon. i see one in the audience -- yeah, okay i see a few. richard, any thoughts before we go to question? >> well, a lot of thoughts -- [laughter] a lot of ground really fast. >> let me say this, that is the success of diversion in journalism will depend on the diverse in society. and that's why stories about education and standard of living and those kinds of things are important to journalisms also.

where are the journalists come to come from? they are going come from places from people who have been well-educate who know how to spell, who know how to speak well. and if those thifers are d things are delivered in an you're not going to get the journalists you need in the news room. that's one of the things that is wrong -- [inaudible] the other thing is that the issue of diverse coverage and who told the stories is also important because i don't believe that a lot of issues have to be dealt with in isolation. >> yes. >> telling the story about the environment can be a diverse story depending on the frame of reference that are used in each

story. the sources that are used, you know, the examples that are used, and if this is woven throughout the entire news operation. that makes for more diversity. i think somebody may not want to read about what's going on in -- toxics waste dump in a poor neighborhood might want to get a glimpse -- might get a glimpse by reading about something else and happen to use that as a reference point. diversity comes in a lot of form. the important thing is that it's there woven throughout the news. >> i could not agree more. so let's go to questions. i see one right there. the lady in the black and white top. could you give us your name. >> my name is jane -- i don't think this is on. >> you're on. >> my name is jacob -- jane hall. i'm a continuing journalist. i used to work for shelby kofi. i teach at american university.

i want to pursue a little further without being too crass the economic argument. i saw in the pugh state of the media story that people -- that people are actually noticing cutbacks and saying there's came your subscription they are noticing. i hear people saying that about news organizations that we all know and love. so that is one economic argument, the brand. let me be crass here. i have friends around lot of pressure at the networks and newspapers and if you're given a choice to cor cover a toxic waste stuff or the wonderful story in the "new york times." it's rare to hear from somebody, she's white. she's not somebody you normally hear from. what's the economic argument to make in terms of branding or something purely crass about why should they cover poor people? why should they cover people not gentry? that to me, is really the case that has going to object made in

a crass way if it's going work. >> i think we have gone through the period of infatuation with eye balls and, you know, analysts telling us that the shallower the coverage, you know, the broader shall lore coverage. and, you know, the thing about the internet when it came up, it was a toy. you know, we got out there and found it was fun to find fifty thousand everyone's to something. it became a tool if we were looking for the nails we went. now it's becoming a necessity, you know, it's gone far beyond that. what is happening in that short period of life in the internet is news that matters. things that are important are coming back to the poor. they are what is propelling sites that are successful. the news that matters news that counts. and again, there's, you know, i can't tell you why people aren't recognizing -- i see the race between on lifeon that news ratings are down, circulation is

done. people are turning off to the institutions that thing have to exist. i hope that the sense of getting back to news that matters and news that reflects communities accurately takes hold before the economic model finally implodes. on a day-to-day basis it's going happen the right way and it's not going happen. it's a repressing question, i think it says about what is the news that is valuable to the diverse community, news that counts? you know, and diversity, to me, is such a thread within the rational for free press and survival of the free press. it has to occur. i'm going to be more a pop -- if we don't a a industry become more relevant and focus more on news that matters to a bunch of communities and, you know, it's the fact there's still toxic waste dumps fifty years after we

founded the epa. and that is in all of their communities. why isn't the story being done? i have one foot in the tar pit, i know in my -- but i still think people want news that is valuable. they want documentaries that teach me not just entertainment. and the economic rash rash tell me write news that counts and see what happens. >> if i can, i'll jump in because, you know, i think about this all the time. some of what i do is entrepreneurial. it may be going abit afield. stay with me. having worked with abc and there are people in the room with us that also have. when a company is owned bay larger entity, it sometimes gets held to standards that don't suit. so i felt, and this is my

opinion, i felt that abc was being held to disney stands in term of the amount of revenue it was expected to generate. news is not going generate the same profit as entertainment. just in general. i think news has been held to a entertainment, particularly tv news, held to the entertainment standard with the revenue it's expected to generate. news was not doing badly by news standards. we changed the standards that news was judged by in term of profitability and got to a fear and panic cycle which neant over time -- meant over time, you know, for example the demographic of networking news has become older and narrower. there's a gap that either can or can't be filled depending on different management decisions to reach down demographically and out diversity wide. but i think part of the issue was that a lot of different news entities were part of larger

companies not just entertainment companies but oh holding company -- other holding companies that didn't know how news worked. didn't know the profit margin. one person said to me that a 7% return is right for a healthy news company. that's not necessarily good enough for some of the larger entities. that creates a huge problem. >> let's go to the next question. we have. we center a qhoal bunch. you csh whole bunch. you chew -- choose. give us your name. [inaudible] yeah! baltimore hometown! [laughter] [inaudible] >> one second. how about we get him the other mic. can you reintroduce yourself so everybody knows. >> i know a lot about mic --

microphones. we are doing every series about inequality. you talk about the news decision makers and funders will wake up to the stuff. my question is a lot of decision makers are white. i'm a white person in a majority black city doing series about inequality. i find you have to make yourself vulnerable. you have to go out on a limb to do the issues right. which means if you're doing it as a white person you have to make yourself vulnerable. how do you get the decision makers to confront the fact they are making the decision from a place of white pes and make the discussion richer? >> who is going to . >> i can't speak as a white person. [laughter] >> that's okay. gene or whoever wants -- the point about overall point about making yourself vulnerable being part of the process is really important. >> i agree. i think it's by having people in

the news room that tell you about the things you may not know. there's education going on every time somebody within a perspective is in your news room. again the worrying part about the deline in numbers. there are fewer people. if we are losing minority employees in news room. that is declining faster. it's spiraling we're talking about. i think it's education. i think it's information. i think it was lg to say so yourself and everybody has to vote. to go out and say, wait a minute, from an economic standpoint. look at the demographic in baltimore? i don't know them but, you know, you look at this. if we pitch the same audience or sell stories to the same group we were doing twenty or thirty years ago, we're going die, you know, again i would rather people did this because they felt it was proper and moral and journalistically the right thing to do.

but, you know, i'm not adverse to saying there's no revenue there. here's where revenue is. you want to talk about revenue. let's go after the market. ads follow stories, i hope. and so let's do stories that, you know, then all a sudden we get our numbers will be up. groups among age, gender, race, ethnicity whatever it is. you begin to make the argument. we just can't sit and say it's the right thing to do. you know, there's an economic argument to be made here. i have to say that. you center to look at the last -- so you to look at the last political cycle and say, you know, if you want to be a winner in anything now. you need look at the outcome and see where coalitions and groups have power. to me, that's an economic argument, going back to an earlier question. >> we have a question here in the front row. >> actually -- .. the economic argument is that

it's coming at the time when you have a vested take -- stakeholdership in certain platforms that are inherently not channelized appropriately for certain audiences to be able to engage. >> give us a more concrete example of what you mean. you don't have to name a company but a structure. >>let talk about newspaper, why not? the reality is this, when you talk about newspapers, for instance, and who is reading newspaper and whether or not there's a generation of, you know, young people of color or reading newspapers by default, the answer general speaking is well are the newspapers in the right place? are they at the right price? are they making available the right kinds of, you know, distribution and, you know, circulation modeled to make that content available? even if you were writing

appropriately for the audience, you know, are you actually delivering via platform that larger not speaking to is capable -- i think there are experiment with the polled. obviously there are free papers that launched in various cities to some success. obviously most futures at this point have websites. tablets. >> right. this is a newspaper to me now. >> right. speaking of what you were saying, with jeff, i live in crown heights, brooklyn which has been considering a lower income enabled -- neighborhood. i just move there had three years ago after living in high priced neighborhood in manhattan. i love my neighborhood in brooklyn. and there's now a "new york times" seller as my subway hop. it just happened. gentification rolls in and then

the newspaper. there are smart people that lived in the neighborhood. the striver immigrant family who would be happy to have read "the new york times" for years if they saw the keys kiosk on the way to work. wait. [laughter] >> a question about the how to relate to these other folks. i remember i had the interview of the -- milwaukee, i can't remember his name. [inaudible] marty -- right. it was after the shooting of in the area. and he was saying i love having people not like me around because as a journalist that's what i thrive on that. you know, what is the person like? what is the this group like in that's part of being a journalist and so that's i love

what you're saying. you should have people like that around you who are just love learning about new things and different kinds of people. that's what adds to diversity. >> three pulitzer in four years at the paper. one tbhais -- because they had somebody that knew about medical issues who was an expert in that. idiversity, again, a cross of range of talents. >> right. it goes back to the basic curiosity that journalists have. [inaudible] >> so my organization over the ninety three years started with a concern for the freedom of press. we have to do less and less on these days. that is covered very well by the newspaper, the media outlet, the in-house counsel office. we look for a place where freedom of speech or freedom of the press is shut down. that's less for us. for us the press has become a mentality of our work. how do we work with the press to promote our other issues?

and so when reflect upon by twelve years as director of the organization, i have to say that the best relationship i had with journalists have been with white journalists and that's not because i prefer talking to white journalists. i think the -- often i approach relationships with journalist in the deepest way is how can i move the ball forward on the issue i care about? how can we change? policy change, societal change? understanding about con flex issue. unless you have a journalist that cover the story over and over again like a beat, you don't really have that ability with a one-off. national security reporters, i think they are quite good on this one. >> i want to ask you a ask. why do you think you had, in

general, an more constructive experience with white reporters? because they were in the right position? >> cover the stories over and over again. when i had one reporter discovering a story for six years. on race issues it's one-off. it's a different journalist each day covering immigration, housing, employment, voting. you don't develop rapport. i'm not focused as much as moving the policy gender forward. i'm looking for promotional. i want to make sure that our cases are covered. it's not the -- my question to you, those in the journalists world, i know as a puerto rican, i wouldn't want to be the guy covering puerto rican, that seems like having the beat to cover the puerto rican community would seem like being placed in the ghetto again. we need journalists who will

cover our communities that develop the are a port. >> you know what is funny? as a dominican, i'm a dominican-american journalists. i'm covering it i'm in the ghetto. but they have the luxury of covering having a more diversity roster. i think that's microcause m actually what we see in society where, you know, white communities have more social capital than communities of color. you see that in the news room. of course you can develop a relationship with white journalists. they are the staff writers, they have the beat, they have the real estate, they make money. journalists of color get the honor or the, you know, to able to have great space in a major mainstream newspaper that usually gets rotated out. there are so many you allow. you have to fit . >> bob herbert held ton the column for a long time. he was under pressure for a long

time. >> exactly. i hear stories about it all the time. you are dealing with different kinds of social capital here. >> this is something i've been talking about . >> david gone from the "new york times" is puerto rican and he writes beautifully about puerto ricans and other people. the photograph exhibit i went his . >>some is something that we have been [inaudible] i think there is something inherently interesting about the fact that the proxy for journalists who actually has a beat and can kind of cover strategically and longitudinally a topic is white journalists. all right because that's what you're saying. that's not necessarily saying that's the color of the person's scib or -- skin or race that is allowing you to have a better are a port. these are the individuals that the social capital. more than that, i think, the

particular status of being able to focus on a concern in a way that allows them to time whether it's national security or celebrities accrue the credibility in that space. and the ability to actually choose news to judge news as opposed to having it assigned to them. what i was talking about with richard, the one place where journalists of color have been able to sneak in and establish a pratt form where they can talk about race without it being a oneoff is when they are columnists. when they are at contributors and no longer held to the standard of report of the day, you know, general, et. cetera, et. cetera, et. cetera. that's one place where you're seeing fewer facing of color. you mentioned about herbert; right? i'm a columnist who happens, you know, write about topics that are close to my area of interest

and have the freedom to do so. i write about asia and asian-american issues. that's after covering those things. it's a complete happenstance that i've been able to do so. i have never actually gone through the mill of being in a news room, you know, gone through general assignment and the other things that lead many other people to have the accrued not just social capital but news room capital to stake out a beat. the fact is there is no path anymore within news room to did that. >> again, that's another problem that goes back to the systemic of the organization the beat that could have as we increase tire tier any. we brought people through and gave them the opportunity. the pathway are moved from new kid to apprentice, to expert, to the owner of the topic, if you will. you have the chance to spend time. those are gone. we do a program coverage of federal courts, and, i mean, there are probably that many

people now full-time covering the federal court system in america as a full beat. they parachute in, they have many other things layered on you know, you know, complaint we hear from judges is they are not unfairly covered. we don't get any coverage. there's a loss of the systemic ability to stake out your territory. and again, i'm hope ffl we look at the rise of ethnic media which came a part because what they were excluded. maybe on the social media side or in the new media side we'll be able to see people stake out the territory, again, with some funding source. at least there's an audience tipping in to attract people to. that's the only place right now. i don't see the beat system coming back in traditional media for a long time. , if at all. there's an absolutely necessity to develop that.

they have a multiplicity of voices. we are at an impass in term of developing that. >> one caveat about what you said about columnists. it's true that a lot of columnists of color write about race. they also hear from the add -- editor and readers is race. whether they're writing about it or not. there's a counter pressure also that has to be -- , i mean, and i hear about it myself. i'm not writing a column about race -- [laughter] but the fact is, it's less whether or not whether they're getting the pressure or more whether or not they're any getting any sources to the publication. i think what we're finding is that those column nists in particular are able to speak and even have a little photograph that designates them of a race. [laughter]

.. >> did you talk to so-and-so? >> so i see your hand. i'm going to take both of your questions back to back. there's a lot of different people who have questions who when the people to get too. if you could go and then pass the mic. >> i'm john welsh, a poet, political blogger, cultural critic. my observation starts in particular as i go around four,

five, six nights a week of poetry events around the area, i find despite the plurality's that are emerging, great -- i go to busboys and poets, there are 90 blacks in the room and i'm one of three others, two or three whites, maybe a couple of haitians. if i go to the right of center, it's all white and occasionally a black shows a. so my question is, what's the role of journalism in trying to pull these diverse communities back together as we stratified ourselves and life goes with life? >> that's a great question. thank you. we're going to take yours and then rolled them both up together spend i'm a retired physician. i'm struck i heard the word race a lot but not much the word class. >> if you could stand up. >> or social mobility. the group i'm most interested in the 1%, thing now are approaching 25% of all the wealth and 25% of all the and.

where did these three topics raise -- sort of overlap a little bit? mostly raised by the other two are here, to. >> thank you for bringing that a. we do have a very robust, if you go to the print copy come you happen to have the magazine. we going to great depths of crunching the social milled build the issues but we just didn't come we didn't funnel into the track in a. so the two questions on the table, right now the we want to end up with, any thoughts about social mobility and the changes in social mobility and wealth stratification hav have effecte, unicom the journalis journalismd out of the question about how do we reclaim sort of that town hall face of news. >> that town hall, first question? basically for having more diversity socioeconomic, sociopolitical, gender,

biological. diversity and management positions. >> absolutely. >> i mean, i think those things are interrelated in some ways. we have raised a couple of times about fighting social mobility. things like the increasingly common you know, wealth hegemony in some ways of being a journalist, right? you have to be able to afford to do it now. you certainly can't make a living by doing it. that is increasing make it more and more challenging to ensure that there is, there's still accurate coverage in some ways of -- if you are as many of us who end up being journalists of any race, from again educational context, middle-class backgrounds or circumstances where our own social context, color is the way. it becomes more and more challenging for us to provide a

thorough dialogue around issues related to what wealth means and social mobility is diminishing. we do need to have that kind of diversity. but i would argue that in some ways, despite the storied working class, blue-collar journalist that has lived up to the newsroom, that really doesn't happen so much anymore. i think that the news media, especially now that we've started to see more trans immediate type stuff or people or print journals are expected to be on tv, et cetera, et cetera, et cetera. fess parker cultivating, of a perception around what types of individuals represent good -- and have to be well spoken. have to be presentable and so

forth. those also translate very often into issues of class as well. >> i was just struck by the fact that when i got into journalism, if you look around average newsroom, we, the less of in the google where people are talking a car loan. it was very different than what's happened today. but i honestly, i go back to something i've thought of in years. as a young reporte reporter i wn interview with jesse jackson in operation push, so how long ago was that? and he said something that i just remembered. he was really educating me, and he said, you know, it's difficult to perceive right now that race will be the easier question for america to settle. that it will be class, economic issues, economic issues of class that will be the toughest thing. this had to be 35 years ago, but i think it's been an undercurrent in civil rights movement, and it is probably now

just really going to come to for. really depressing myself thinking that we are still struggling with racial issues that this class issue has yet to be. i think as we stratified it may indeed be the bigger challenge >> where to begin? sorry about the march on washington in 1953 which was for jobs and freedom. and during the civil rights movement, there was a conscious decision made to talk about a public policy as rapid economic come but that was -- the civil rights movement had a range of people who had a range of approaches. the urban league was -- that was their thing, jobs. business community, economics. other people said let's go to the streets. others had their voter registration. but what we remember at that time now are the marches and the

public policy. we don't remember that part of it was economic that got overshadowed by some of these other things. >> that's a great place to leave it. the full circle of history, to remember that race and class have always been intertwined, and class and journalism, and race central is in have also been intertwined. this is not anything that we are going to struggle through easily. we got here after many years of struggling with american identity, race and class, and we're going to keep pushing. i think that's one thing we hear. nobody here is shy. everybody here is passionate, and they're still so much passion left amongst us in the media for tackling these issues, and i want to thank everyone here with us in the room, the "columbia journalism review" of course, and cyndi stivers and everyone on the team. and the aclu, and the newseum. it's wonderful to have all of you here again. richard, gene, jeff, and the new

book bird of paradise. thank you all. [applause] >> [inaudible conversations] >> [inaudible conversations]

>> [inaudible conversations] >> looking at a live picture from the museum here in washington, d.c. this afternoon we will be bringing you live coverage of the hearing looking at high risk insurance. a program designed to -- it's great as a part of the 2010 health care law starting in 2014. health insurance covers can no longer deny coverage for those with preexisting conditions. witnesses at the hearing will

talk about efforts to deal with the issue at the state level. that would be live at one eastern here on c-span2. and live over on c-span today, at 12:30 p.m. eastern, newly confirmed defense secretary chuck hagel will be speaking about strategic and fiscal challenges facing the department at the national defense university in washington, d.c. last week during a pentagon briefing, secretary hagel spoke about the impact of budget cuts will have on his apartment. here's a look. >> to confirm a story that's already out there, that's been out there, on the furloughs, we're going to be able to reduce and delay these furloughs, but not eliminate furloughs your and that right now looks as though we will be able to go from and

original estimate of 22 days to 14. that we think will save the department anywhere from, i think the original estimates were around 40 billion, and we can probably plan on about two and a half billion, and these numbers are floating as you all know, but that's good news. it's good news from one or two weeks weeks ago. the comptroller and the chiefs and other are still working these numbers. i understand that there's going to be more in depth briefing after we're finished here. let me also kind of just hit the current budget situation in a

little bit of detail. and then marty may have some thoughts on this as well. what the continuing resolution has done for us, it did fix some of our problems. in particular, it put some of the dollars back in the right accounts. we still don't have the flexibility that we had hoped to get, but having money and the right accounts is particularly important. but that does, too, it reduces a shortfall, lease in the operations budget. you also know that we came up better then we went in under the sequester where it looks like

our number is $41 billion now versus the 46. it gives us a program authorities to start new programs, which, in military construction, which is significant. some of the things we're still looking at and what are still working through, we will continue to work through, as i said 41 billion is the number that we are having to adjust to. the overseas contingency operations, that itself is about $7 billion higher than we had estimated, costs, more expensive to bring troops and equipment out of afghanistan, and there

are other contingencies as well. in the operation and maintenance account, we are going to be short at least 22 billion, for fy '13. we're going to have to deal with that reality, and that means we're going to have to prioritize and make some cuts, and do what we've got to do. let me list some of the specific things that we are going to have to do or are in the process of doing, we anticipated we would have to do. cutting back, sharply, our base operations support, reducing training for nondeployed units. i've already mentioned the furloughs. that's better news, but we're not going to be going to

eliminate the furloughs. >> you can watch those remarks anytime at our website, c-span.org. again, we will have live coverage of defense secretary hagel's speech today on the department's fiscal challenges, and that's live on c-span, gets underway at 12:30 p.m. eastern. >> president barack obama continues his push for stricter gun control today. is visiting colorado, where he will highlight that state's newly passed gun control measures. we will have live coverage of his remarks at the denver police academy. we will have that on c-span, and that is scheduled for 5 p.m. eastern this afternoon. >> gun control legislation was also a topic that came up yesterday during remarks by massachusetts congressman jim mcgovern. he was talking about his top reorders for the new congress at an event hosted by the woman's national democratic club.

representative mcgovern, who co-chairs the house hunger caucus, also spoke about his efforts to reduce hunger and poverty. this is just under one hour. >> thank you. thank you very much for inviting me here. this is a very special place for a whole bunch of reasons, because it was at the woman's national democratic club that had my wife, lisa and i had our wedding reception back in 1989. and i haven't been back since. but we got off to a rocky start but we got married at sacred heart church on 15th and park road, northwest here in d.c., and when we arrived at the church, there was another ceremony going on. [laughter] so we all had to wait in the back of the church into that ceremony finished. we were a little way to getting your, and i remember coming into this -- it was a beautiful november, crisp kind of evening,

and i came in and we were all so rushed, the photographer told me the guy who's in charge of valet parking toad -- totaled his car. so he wasn't in a very good mood taking our pictures. [laughter] but suffice it to say, the marriage has lasted. we are still happily married. some happy to be back in the place where it all began. i worked with george mcgovern when i was in college, and he became my lifelong friend. in fact, i was given the honor of giving a eulogy at his funeral in sioux falls, south dakota, but i go to these events all the time and people always think that he is my father. i walked into an event, people say i'm a big supporter of your dead. i always supported your dad. tell your dad i was the biggest supporter he's ever had. and then i tell them that my dad, walter mcgovern, owns a liquor store in worcester, massachusetts, and i hope that they will keep supporting them

a. [laughter] actually i don't george mcgovern a great deal. when i first ran for office back in 1996 i was -- shaking hands, greeting voters and this older woman came up to me and kind of squid to come look at me and said mr. mcgovern, i have to tell you it's the proudest moment of my life when i voted for you against richard nixon in 1972. i did know what to say but i said thank you very much. i hope you'll vote for me again. she did. i one with like 70% of the vote. you know, but george mcgovern, you know, remains somebody who i think is one of the best examples of public service that this country has ever seen. and he was my kind of mentor, my teacher, and i kind of ally myself philosophically with his views. i mean, i'm a liberal.

i'm not afraid to admit that. i believe in -- [applause] -- i have a positive vision for government. i don't want to wasteful, bu bui believe not have adequate government. i believe in the media. i believe in the great society. i believe in the united nations. i still think that that body can get some good to help end violence and bring about world peace. i believe in peace over war. and i think all of us need to work harder for peace. and not be so easy to allow our nation to get sucked into wars. we're having this great debate and watched in right now over our deficit and our debt. and people say we've got to make these tough decisions. we're going to have to take back some of the benefits that you might get for medicare and social security and order to balance the budget, or we're going to cut money from education to make it more difficult for young people to get a college education, or

we're going to cut back on monies for roads and bridges and infrastructure so that cities and towns and states can't repair their infrastructure. we have these tough times, we have to make tough choices. i always remind people that these two wars that we are in, afghanistan and iraq, we're still getting out of both of these wars, were wars that we went into without paying for them. why didn't we pay for them? when george bush the first went to war against saddam hussein when iraq went into kuwait, he had congress appropriate necessary funds. he got support from countries from around the region to pitching. so when that war was over with we didn't have this incredible, you know, deficit in terms of what we owe. but the wars in afghanistan and iraq, are the first wars since we borrow the money from the french to fight the british way back when that were not paid for. and when you add up the cost of

these wars are, you know, how much we are and all because of these wars, it's in the trillions of dollars. trillions of dollars. so a few years ago, i introduced an amendment along with the late confident jack murtha of pennsylvania congressman, former congress and dave obey of wisconsin. they said the president wants to take you to work, you ought to pay for it. that ought to be a war tax to get people don't want to pay the vortex, maybe we ought not go to war, but this debate we're having right now about tightening our budgets and get our fiscal house in order, to have that discussion and not talk about what these wars have cost, to me is just ridiculous. we need to be more cautious in how we get sucked into wars. and as we are educating ourselves from iraq and obligated ourselves out of afghanistan, i will have to say not fast enough in my opinion.

we need to make sure we don't make the same mistakes in the future. you know, we just implemented a thing called sequestration, which i think is about the dumbest idea i have ever heard in my life. i tell people that sequestration in my opinion represents an all time high in recklessness and stupidity. i did it that we need to try to find savings within our governments budgets, but the notion that you do across-the-board cuts without any care given to where you are cutting, everything being treated the same, it's just nonsensical. the sequestration, if you're a line item in the budget that wasn't a fraud, waste, and abuse, the line item for medical research would be treated the same way. it makes no sense. and we have this group in washington who have kind of indicated the republican party, no, i don't think are

republicans. i think they're more libertarians. they are people who don't believe in the public sector, so people sitting all the time, you've got to compromise, you've got to compromise. i'm all for copper much. i get a. i'm not going to get everything i want, but how do you compromise with people who want you to capitulate, what basically nothing left of government? the more you cut the better for them. they do what any of these programs. we've had debates in congress over -- one member asked why do we even need a national federal highway system? the response is a republican president dwight eisenhower thought it was a good idea for interstate commerce law by build a highway in massachusetts and connecticut to rhode island and connecticut, it didn't just dead-end at the states border. but the idea that we're having these debates today that we had back in the '50s and '60s, it's just crazy. i mean, we've got to be moving forward. i think the responsibility of

our government is not to tell you how bad you are, is not to lower your standard of living and your quality of life. it out to be lifting your. we've got to be figure out how to help improve the quality of life for people in this country, not how we so more people into poverty, not hav how we got more benefits for people who need them. and i think that that's what's missing in this debate. we have a deficit and debt problem, support of the deal is you have to cut where you can afford to cut. part of it is you need to raise revenues where you can raise revenues. the other part of it is investment. it is investment. if we invested the way we should in medical research, you know, you would save a lot of money down the road. if we could find a cure to alzheimer's disease, either thing medicaid would have another problem. so why don't we fix the budgetary problems of medicaid by curing alzheimer's disease? finding new medical

breakthroughs to make it less likely if you get ill you have to be in hospital to find even cures for diseases. i've talked to medical researchers all the time. i come from a city, umass medical school in worcester, massachusetts. one of the greatest medical schools around. in fact, he may see the headlines recent about a two and a half year old kid he was cured of hiv/aids. a lot of that basic research was done at the university of massachusetts in worcester. it's incredible. not too long ago hiv-aids, was a death sentence. now we can control it and kind of treated as a chronic disease and maybe we might even have a cure for it. that is incredible, and it not only will improve the quality of life for people, but guess what? it saves money. so if you want to save money, you have to do a little bit of investment. not investing in our infrastructure is a crazy idea. every other country in the world is investing in their

infrastructure. look at the incredible investment in infrastructure that they are making in china. they're not doing it because -- they do it because they know it's essential for the economy to grow. they are thinking not just this year. they are thinking five, 10, 20, 30 years down the road. we got to be thinking in those terms as well. so all these cuts the people are talking about, you know, maybe they look good i'm a balance sheet fisher, but next year or the year after they will cost us a lot more. let me talk about one have been working on for quite some time. i, very much like my friend and mentor, george mcgovern, i take on this issue of hunger. not only in the trendy but around the world. i want to talk you a little bit about first year in the trendy. we've got 50 million people, 50 million people in this country who are -- were the richest, most powerful, most

prosperous nation in the world and with 50 million people hungry. 17 million of them are children. and posada congressional district in the united states of america, not a single one, that is hunger free. every community has hunger in it. and this does not have to be. it does not have to be. i tell people that hunger is a political issue. because we have the food, we have the knowledge of how to implement programs to alleviate hunger. we have everything that you need, except the political will. if this were of another war we would find the political will and we would go to war. we ought to the war against hunger here in the united states. people say to me, you are just a bleeding heart. we can't afford to spend more on these programs. first of all, it's not all about spending. it's about better coordination to begin with a most many of the programs we have. but i to people we can't afford not to solve this problem.

kids who go to school hungry don't learn. you skip a meal, it's hard to concentrate. you have young children who show up in emergency room's who have basically a common cold, but because they've been going without food or any assistance or so compromised that the in depth with something more serious and end up spending many days in the hospital. you have senior citizens that show up to emergency rooms because they take their medications on an empty stomach when their bottle specifically says take with a meal. there's a reason for that. but they can't afford to food and their medicine so they go without the food and end up back in the hospital. not only does this produce all kinds of human history -- misery, but it costs a lot of money. it costs money when people have to have long stays in hospital. so if you don't care about the moral aspect of this, i think you ought to care about the

bottom line, then you ought to join with me in this effort to take on the issue of hunger in america. i've asked the president. i've been pushing and pushing them to do a white house conference on food and nutrition, to bring everybody together, all these different governmental agencies so they can better coordinate with each other. not only to get people what they need in the short term by to help transition people off of public assistance. a big chunk of the people who are on snape, the new name for food stamps, work for a living. they work. when people say they ought to get a job, they do. but they learn so little that they still qualify for public assistance. we've got to tackle this issue to bring everybody in the room, bring the faith-based leader, bring the mayors and governors, the grocers coming in, everybody, the farmers can everybody who might have a role. bring everybody together, bring them to the white house, lock the door, and don't leave until

you have a plan. because we do not have a plan. we have a plan to do a lot of things in this country. there is no plan to end hunger. hillary clinton says it takes a village, she's right. i say it takes a plan as well as a village. because if you don't have a plan to none of us know what the hell we're doing. you may be doing some good stuff locally but if it doesn't, if it's not connected to something else, which is not connected to something else, it just doesn't work. enough of the band-aids. we can solve this problem to the same with global hunger. i will close with this. i have always believed from my travels around the world that people look up to us not because of the size of our weapons arsenals, and not because of the number of military bases that we have, but they look up to us for what we stand for. they appreciate us being there as a beacon of freedom and

democracy and as a stalwart of human rights. eleanor roosevelt helped put together the universal declaration of human rights. that's a great source of inspiration for people around the world especially human rights defenders. i also believe from my travels that there's something else and that is we're all alike, we are all the same. whether you're a mother or father, here in washington or in massachusetts, or whether you're a mother or father in kenya or ethiopia or a country in asia or latin america, we all have one thing in common. we all care about our kids. ..

give you one example. i am the author of this program called the george mcgovern bold program to cover school lunch program that has all kinds of incentives to help create a kind of sustainable self-sufficient school feeding programs in various parts of the world. many of the kids right now are being fed in school because of this program. millions of girls who otherwise wouldn't go to school is going to school because there is a meal. their parents are sending them. these programs are innovative where you go for a school meal, have your class and bring home a little snack to feed your brother or sister or your mother

or you're father. but we visited one of these mcgorn dole programs at a displaced persons community outside of columbia a few years back and was one of the worst kind of examples of extreme poverty that i think i've ever seen and this young mother cannot to me and said i want you to think the people of the united states for me. she said my son is 11-years-old. every day in this slum that we live in one of the leaders from the armed groups comes in, one day it's the guerrillas and the next it is the right-wing military and the approach this 11-year-old boy's mother and say give me your son, let him join us, she will walk and fight for our cause. let him join us. and in exchange we will promise you one thing and that is that we will feed him every day, something you cannot do.

she said i've come so close to giving up my 11 year old son. i know if he joins one of these groups he will probably be killed, but i also know that without food, she will die here so i don't have to make that choice anymore. you, the people of the united states have made it possible for my son to not only be fed every day but to be fed in a school setting where he's going to learn to read and write and hopefully get out of this terrible place and have a good life. and i will never, ever forget you for that. this is magic. this is is what this all about. one of the things i feel very strongly about is that is where our strength is, and those are the programs, those are the initiatives that we ought to be pushing all around the world. i've never had anyone come up and say to me give me a rocket launcher or more guns or land

mines. people ask for help with agriculture. we are all alike in that respect. and i also think, too, this tendency for us to believe that we have to have a military footprint every place in the world i think it's counterproductive. how would you like it if in maryland there was a military base that china had. he would present it. by understand the importance of military arrangements between countries but i will tell you our greatest strength is in our humanity. it's not a number of military bases we hover around the world in the weapons arsenal so i hope we can have these discussions in the remaining years in the obama administration i hope he can

change not only this country for the better in terms of ending poverty i also hope he can help spearhead an effort to lift people all over the world. it's what he called on us to do. in those words that she spoke during the international declaration for human rights as true today as they were back then. i come before somebody excited about the future. i'm not happy with the way things are going in the immediate term but i'm optimistic. i believe some of these ideas caring about one another i think that's the future and the sooner we get they're the better. thank you for taking politics seriously and paying attention to what's going on in the world and not speaking in just the terms of sound bites but understanding with these issues

are. s troubled is congress is right now there is a time for everything. there is a time for this backward thinking house of representatives. that time is passing and we will get to the point we can get a congress that wants to get things done and puts the american people ahead of the party. thank you very much for having me. [applause] >> thank you so much for this wonderful and inspiring talk. we are going to take questions from the floor and the congressman will repeat them and respond to them just keep them short, please. raise your hand.

>> i was in africa and also in italy. there was a fellow named george washington who uttered three words with a lot of meeting, no fire entanglements. this means no american soldier should be fighting for that country's civil war or whatever the problem is. we shouldn't have sent one soldier to vietnam, not one. if we want help we can do it militarily or financially as far as i am concerned. vietnam is a crime against humanity, iraq and afghanistan. i think you all heard the question and i agree, vietnam was a terrible mistake. i think the war in iraq was a terrible mistake and it began as

an effort to go after some of bin laden has morphed into this mission that nobody quite knows what it is or how it ends. that is an example that afghanistan it's also getting involved in the foreign entanglement but quite frankly we can't untangle some of the issues that are unique to the internal workings of afghanistan. i would say we have paid a heavy price in terms of blood and treasure. we are feeling bankrupt it because of the war and on top of that we have lost some of the best and the brightest that our country as to offer. i've been to more funerals than i care to remember. the brave men and women who have families to have bright futures who lost their lives because of these unjustified wars. as soon as we get out i think we need to be careful not to get

sucked into another one and i think there are some people out there who are anxious to get involved in the world war. >> if you try to close some of the bases in the country's overseas don't you think that the pentagon would be the first one to scream about? >> the question is if we close some of the bases overseas i think some of them would scream, probably. i mean, look at everybody, every agency has their defenders and everybody wants to hold onto what they've got and nobody wants to give anything up but i think we ought to have a discussion in this country about what national security means. i mean, do we all feel safer because of, you know, all of these bases all over the world, do we feel safer? i mean i think we ought to have a new definition of national

security which includes things like making sure everybody in this country has enough to eat, food ought to be a right and have good quality health care, make sure people have a job and live in safe communities, that they have good access to a good education. those are the sources of our strength. yet when you look at some of the debates in the congress, you'd think none of that matters. look, i want a military second to none. don't get me wrong. but i think the sources of our strength are also in these other things and we are neglecting them. we will not be an economic superpower if we do not invest in research and scientific research if we don't keep our infrastructure as modern as it can be we are going to lose our economic edge and i always tell people, my constituents, you know, they don't -- is osama bin laden's brother going to come through the front door and

attack me? what they worry about and lose sleep at night over is whether they will have a job the next day, whether their kids are going to have a job, whether or not they will be able to afford the mortgage. those are the things that give people feelings of insecurity. we need a new definition. we need to get a debate going on where we brought in that national security. >> i think you are to be commended for the stand that you took in the recent film a place at the table. i can't remember if there were any other congressmen who participated in that film but you are to be commended for that. and my question is this, why in congress, are there so many of your patriots who look down and contempt when they talk about food stamps is it that they are pandering to the far right wing

or they just are so disconnected that they don't care? >> i think they pander to the right wing when they try to demonize a program that really provides people protection when they are vulnerable and they cannot afford food. so that is one of the things. i think a lot of the members of congress have no clue what it's like to be poor. the movie that the gentleman referenced called a place of the table, it is a great film about hundred and america, and hunger in america isn't like starvation in sub-saharan africa. here it's different. but it's every bit as deadly, and examines families who are struggling in poverty and i lived on a food stand by it from a week because people felt the food stamp benefits was light astronomically high.

right now it's about a dollar 50 a meal. we remind people what is hard work to be poor to try to figure out how you are going to foot -- food on the table. when you run out coming you run out and the terrible traces people have to make. i think the food stamp program is a great program because if you didn't have it people would be starving to death. the other problem is there is no political consequence. you vote for a gun control

measure but if you take it of the most important people you are probably not going to lose your election i hope what it does is raise awareness and gets more people to start looking how the members of congress vote on these issues dealing with poverty and hunger and of the vote in the wrong way i hope to let them know they are not going to get the vote in the next election so it ought to be a political consequence. >> thank you so much. you have energized me to want to work on the war against hunger and i would like to ask you what you might recommend in terms of where we can put our time and action to work against ponder are there things that we can

start getting behind? what would you recommend? >> call your member of congress and tell them to go on the bill in the house of representatives. >> they basically stop any more cuts in the stock program. one of the things that is disheartening to me is not withstanding the fact that there is all of this fraud, waste and abuse in the crop insurance program which is kind of a scandal in and of itself. the republicans and house of $16.5 billion on the program and i was told i should be happy because they want to cut 30 billion so where we have a bill it would say no more cuts on snap.

number two you are probably involved in the local food banks in the initiatives i'm happy to work with you and give you ideas of some other things you might want to do putting pressure to a conference on food and nutrition and then we could have benchmarks and measure whether they were making progress and if we are, that's great and if we are not, we know who to blame. so that is where i would begin. >> i wonder if you could comment on the impact we seem to be at with of the 9 million who are here illegal and do you think it is possible the federal government could ever develop a serious expanded guest worker program that might make it possible for people to come and go and work without to the dilemma that they now face.

>> i think if we put our mind to it, it's a program that actually works but we need a bill to help do a number of things. by the way they are working by and large. many of them washing dishes at our restaurants, doing seasonal work, all kinds of stuff for whatever reason we have a hard time finding non-immigrants to do. the other thing is we are a nation of immigrants and one of the great things about the country is the diversity and when i hear people talk against immigration reform is always like we don't want any new people here. the more new people, the better. in my own city i've seen over

the years these transformations of the different groups that have come in and it has enriched my life. i've learned about other cultures and enjoy more kind of food than i can imagine. people that are coming have a great work ethic. they talk about this kind of bipartisan consensus that is growing and i think the republicans realize being against immigration isn't in their political interest so that is a good thing that may work to a compromise but we need to deal with issues like border security and seasonal work and regularize the status of people that are here and i think we can do that. people get even sillier. >> i'm a constituent and i went to pakistan in october to a

group serving firsthand the effect of american droned strikes. i would like your opinion on that. i'm pleased to see there's been a growing debate but you talk about unintended consequences it seems to me to be explaining why some people don't add my ear or don't consider america and exceptional of the signature strikes with patterns which i am hearing of men between 18 to 40 that happen to live in the wrong place. what concerns me is the drones make it possible. i see a disturbing trend if we pulled the soldiers out, jerome strikes going up because it saves our american lives but it's not saving the every end and we are removed from it. we are able to remove ourselves from the consequences. >> i am worried about that as well. it seems like we are moving to a new level of basically going to

war and killing people without having to kind of see it firsthand or feel it. a lot of our soldiers are on the battlefield and yet we are doing strikes that may get the bad guy and kill some children but have nothing to do with the bad guy. i'm worried about that trend. i don't agree on very much but i am glad he had a little meltdown in the senate and a filibuster to call attention to the fact we don't have a policy. we don't know the policy is. there is no definition and we have drones' today and the russians are going to have them so what are the rules of engagement? life is valuable to people there and here and when innocent people get killed as a result of the strikes the families of

those people we took away the most precious thing in their lives, their kids or their husband or their wife or their mother or father. we need to have more discussion about how we solve these problems without bombs and drones and they are not naive. i can from the civil rights program with john lewis he took a group down to alabama in birmingham, montgomery, selma and john lewis was beaten and almost killed marching over that bridge but one of the things that was so inspirational to me was that whole civil rights movement in the country was non-violent. he was hit over the head by an

alabama policemen. it was a non-violent movement that changed this country for the better and quite frankly served as an inspiration for the rest of the world. with the plight of the matter is non-violence can be used any way you can change the world coming and we are so fixated with military interest to everything that we don't even talk about one of the alternatives. if you don't do this we are going to occupy this. we ought to have more discussion about what are the other peaceful things without telling everybody that we would be able to solve some of these problems and i know there have to be. [applause]

>> i want to commend you for your work on honegger that we know impacts the whole world. being here in the district of columbia we are not a state and as you heard a few moments ago we don't of a representative to call. we don't have senators that we can call upon and our delegates but as a fantastic job for us has introduced a bill of the columbia at mission act and you haven't signed on to it. we would like to hear from you. >> as soon as i can after this meeting. [applause] you twisted my arm.

>> i have to ask how often do you think the u.s. will conclude a free trade deal with the european union in the next few years and do you think will pass congress and are you in favor of such a deal? >> i don't have a strong position i have to look at the details. by and large i believe we ought to have trade deals that have to be fair and to get my vote they left up the quality-of-life for workers in the country's as well as lifting our own workers out to but i didn't think that it addressed the issues of the worker rights and columbia and some of the human rights violations going on the way

trade agreements are supposed to work they are supposed to lift everybody up in places like columbia where people are not earning a little wage they have the opportunity to earn a wage so they can actually buy products and columbia and in the united states. i represented areas in massachusetts during nafta where i saw the entire industry is shut down overnight. all of the textile companies left. so you had american workers that were left high and dry and then you had mexican workers that weren't benefiting because you were not getting paid what you should get paid. the european union is a different group altogether.

but i need to look at the details before i give you an answer. my focus is on worker rights and making sure they have an opportunity. >> a member of the coalition to stop gun violence to address this issue and i must say we've worked hard over the last three months. the senate expects as early as next week to hold votes on either a negotiated package or a bill that's already been reported out of the judiciary committee. the nra is circulating its own version today. you are heartened that nothing happened we are going to work our damnedest next week. the president has with everything including banning

large magazines, assault weapons, etc.. but i hear so often from the members of my committee and the chairman of it and other people wasting your time before we get in the senate it doesn't matter because the house is going to do nothing so why don't have any ammunition to counter that. >> and history professors said the world will not get better on its own and while people do not want to see the sensible gun safety legislation, a move through congress if people feel the pressure, things will happen we couldn't get hurricane relief past the speaker of the house decided to go home and do nothing, they were displaced and dealing with the aftermath of

hurricane sandy we came back and passed hurricane relief. if the pressure is there the congress will move. this is a difficult debate for many because the your joost of voting in the national rifle association. you don't want them on your back. i think even the nra members there's a growing belief that there ought to be reasonable limits and the idea that anybody can buy an assault weapon of ammunition, that just goes over the line.

give me a break. they used to be for that. if we get universal background checks it's a step in the right direction. in some places in this country it's easier to buy a gun than it is to vote and that is a sad reality. this isn't to take away anybody's guns but there has to be some common sense and congress has the spine and the senate and in the house can not only to devote but do something a. and i felt the anguish and president obama when he was talking about what just happened here. these little children their bodies were riddled with so many bullets that you couldn't identify them.

shame on us if we do nothing and the pressure will continue to build to hopefully do something. >> i would like to follow on the last question and be more specific. the problem is we have a congress with a giant wall down the middle and the bad guys are on the other side and the yonah most of congress. what can we do specifically to put pressure on those congressmen from their district because we are here and they are only going to listen to their districts. they aren't going to listen to us. how can we put pressure on them, on the very points that you have made? >> it is a good question. the deal is you have relatives

that live outside of the district of columbia and other states and maybe some of the states where we have members of congress kind of wavering on this issue reaching out to the faith based groups and reaching out to other clubs you may be affiliated them. it's no question they react to their own constituency. i think an effort that goes out may be sympathetic to getting them to pressure their members of congress i think would be helpful. there are various organizations trying to build constituencies. people are encouraged to speak out. one of the problems is there

were a lot of people in the country that believed just like we do but don't say anything. maybe it's not their place to call or write a letter or send an e-mail we need to build constituencies across the country and put pressure on those members. again i find it very difficult for example to see how congress would vote down something like universal background checks. that in and of itself would be a significant step forward because a big chunk of these sales are being dealt with without background checks and it's easy for people to get access to these terrible guns. we may have to split some of these out, but it would be a shame on this country if in the aftermath i go to virginia tech

and the giffords shooting, the shooting in the theater and that doesn't even count the fact that every day there are accidental shootings because people don't lock their guns up. the number of people that die from violence is through the roof so i think this is the time >> thank you very much for all of your answers to the questions. i am trying to get a picture of you in the house and i'm wondering if there are any means informally to talk to people who have such different ideas on the informal basis to try to understand on an informal basis.

>> we talk all the time. on some issues we have some common ground. i find that some of them agree with me on that and we have amendments they vote with me. we have common views in terms of the rights to privacy. we have some common ground in our reluctance to increase the patriot act and many of us are liberals like me that a greek -- agree that we aren't put under surveillance necessarily that there is a process in place including getting in a warrant to be able to do that. on some of these there is a common ground. but when it comes to kind of government, there is a rigid ideology that the likes of which

i've never seen. it makes me almost nostalgic to new gingrich. as much as i disagree with him i think that he believes there is a role for government but you get people who will say when the defense bill comes up for example they will preface the remarks by saying the only thing the constitution requires the congress to do is basically take care of our military. everything else is up to you are on your own and we believe that. and i am assuming -- i don't know all the constituencies believe that but it goes back to what i was talking about in the very beginning and we need to do a better job of defending government. i am not for wasteful government. i am not for an efficient government. i am for the government that works but we have to remind people, you know, what the

government is and i think people have forgotten. i was supposed to have an appointment at the medical center. i was early so i stopped at mcdonald's to get my paul newman's coffee before i went to the meeting and was about maybe 25 elderly men in the corner. if you want to know what is going on in the world, go to mcdonald's around 8:00 in the morning and there is a group of 25, 30 elderly men solving all of the world's problems. so i walked in and the guy says mcgovern, we were just talking about you. i said really? he said and wasn't good. i said great. [laughter] she said come over year. look we don't want this health care bill. i said really, why? because we don't want the government running our health care. i said what do you think medicare is? do you know what the bill does? it removes co-payments for preventive care, that's good for you. it's going to close the doughnut

hole. yet the the other things. what other things? i had a guy and a business meeting the other day that told me i need to get the government off his back. i said be more specific. he said the whole thing. i feel it too much government. help me. i said i'm not a congressman or politician. tommy and i can help solve those problems. people have this kind of notion that the government is just that. i'm going to be honest with you, government does a lot of good. it saves people's lives. you can have water out of the faucet and not buying because we have regulations governing clean water. a study by the supermarket has been inspected by the usda. you have medical devices and dedications regulated in a way that tested before they are given to you. there are things we have a

safety net for poor people. if that doesn't exist people would be living in absolute poverty. so part of what we all need to do is push back a little bit. this is a good government. it's not perfect, it is not without its faults. there are tweaks that need to be made. maybe eliminate duplication. but let's have the most efficient and effective government in the world. one, as i said in the beginning, it left people up. it doesn't tell us how bad we are or how much we have to lower the standard of living but to lift people up to help move us forward, not backward. >> thank you very much for your work on human rights not just in the united states but abroad. i would like to ask you about sri lanka. i've been very concerned about what happened in sri lanka and i know you have been, too, because you have tried to get the united

states to work on that. and the sri lanka government has called the videos that were made at the killing fields as fabrication. however, they said these are authentic records of what happened in sri lanka. what i would like to ask you is how has the state department war crimes office not checked whether the u.n. who have ruled them authentic, why hasn't the u.s. apart in the state of his crimes office checked on these adios and reported through the results to congress these things don't have to wait for the international investigation. >> well, i co-chair the tom lantos commission and extend your entry -- and there are videos you are talking about those may be the ones we've shown to members of congress that kind of raise awareness and we are in our administration to raise the issue and investigate the authenticity. to be fair, the administration

has also raised some of these in the government to be a terrible atrocities occurred. we ought to know what happened and the people in sri lanka not only in sri lanka but overall we need to be more aggressive on our support for human rights to vignette i think we stand for anything we stand out loud and foursquare for human rights. it's really what people expect of us and who we are. but i am very sympathetic and concerned about what you are talking about and we are going to continue to push. if i could just close with one thing. i began telling you george mcgovern was a great inspiration to me and when i was a college intern to give a speech before the democratic action defending the will of government, and this was at the height of that proposition 13 and the anti-government movements going on and i learned a couple of

things. one is i know why he lost and two years later it was a result of that speech because it was very courageous to give that was also reminding us that we have a role in determining the kind of government that we have to get one of the lines has the greatest threat today is not a foreign adversary but an enemy within. that enemy isn't in the column it is inside ourselves and among the leaders it is the sense of futility and the adel conscience and a lost vision so we need to work on our conscience and renew our vision and think big. we have big problems here that we can solve and we shouldn't shy away from them or ignore

them and i think that we need to insist we can take on these big problems and solve them so we are not afraid to fight for justice or fairness or peace to make this country the best it can be thank you for having me. [applause] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

we spoke with a reporter for an update on gun efforts as well as legislation in congress.

>> host: joining us on the phone this morning to talk about his piece yesterday on the front page pro-gun forces started to the key bills so you write in this piece that when the senate returns next week to take up the gun control legislation, there are provisions that are in peril. what are they? phill >> guest: there are concerns now that there might not be enough support for a proposed expansion on the background check program. supported minority americans according to "the washington post" and other groups. the various democrats would support this plan if it were put to a vote. the other aspect of this is in peril the provisions that would

make gun trafficking in federal crime for the first time. it's gone out of the judiciary with bipartisan support but if what the guy that actually voted for it, the republican chuck grassley is it set to be working on a bill the what altar what was approved by the judiciary committee in part because the nra suggested a different way of passing the law. so really the two pieces of this bill could be in jeopardy. we have to wait and see next week when the senators get back to town. >> senate majority leader harry reid said recently that the assault weapons ban as well as limits on magazine clips, those pieces, those two provisions would not be part of any base bill but they would get a vote through an amendment process. do you suspect that background checks as well as making gun trafficking in federal crime but those also get a vote for the amendment process.

at the time they said that and we still have reason to believe that this is the case. having the support to get through. and we were also expecting some developments possibly by the end of the week to signal in fact there is language now regarding the check that would be amenable to enough. joe manchin, the senator from west virginia, one of the real centrists in the senate is said to be working on the language regarding that is amenable to folks like himself and other moderate democrats and republicans. he's been working with his friend who is a republican and they are hoping to get people like say tom coburn or susan collins or john mccain. you put enough of those folks together and you have zabel. so we will just have to wait again and see the problem. the problem behind you the capitol is empty the weight of

lawmakers because they are considering a recess and they are scattered across the country and around the world right now. it's more difficult to determine who was willing to vote for what and whether or not there are elements of the bill they can support. >> so, what then do we know we is slated to have an? of course this could change but what has the majority leader said about when they return? when do they bring it up? >> we expect it could come as early as tuesday. it would believe that if they get new language regarding background checks because the rule 13 could basically ride out a few extra days. right now the bill has language that is space only regarding background checks because it would extend to all private and commercial sales. what they are hoping to get is language that would allow for some exception. perhaps people to carry

concealed permit, concealed carry permit, perhaps people who want to transfer weapons from father to son. if those type of exceptions can be established and they can get what they want keeping some kind of a record of private sales, then they are going to change that bill and let that cried out for a few days. >> what about the gun trafficking part of this? how would that work and what are they talking about? >> it would make the practice of some one knowingly buying a weapon or that is ineligible to buy one, the federal crime for the first time. basically to say someone buys a weapon or someone they know is a convicted felon or someone who has committed some kind of a domestic violence crime that is ineligible goes out and buys the weapon for someone in the end up using that in a crime but also potentially the person that bought them the weapon. that is the most recent example

is to remember the shooting in new york around christmas time that left the two firefighters dead. a woman that helped shooting the gun could conceivably face sturges' in that situation because she knew that this was someone who was ineligible to get a weapon. >> so, ed o'keefe, with your reporting yesterday along with phil rucker, there are people saying the nra has one. >> well, you know, we know that the nra as all interest groups do when they have an opportunity to consult all the legislation has been suggesting language and has been sending the lawmakers and some proposed tweaks to the legislation and we were able to obtain one example of that but as the nra pointed out rightfully and as it was noted to us this is the way it works. they sit there with staff and try to tweak the bill in every

way possible. we've received suggestions some of the moderate democrats running say we don't know specifically who but there's a long list of people including max baucus, mark pryor. but those types of senators, and again we don't know which ones, have basically been reminded if you vote against us we will do to you what we've done to some any other people which is run millions of dollars of ads and suggest that you don't necessarily support the second amendment so there are enough of them out there in the states at large using these constituents that see that and realize they have to be very careful about what exactly they might eventually support. on the flip side, there are groups like neyer bloomberg, a newer groups called mom's demand action, the brady campaign to

prevent gun violence, all these different groups trying to meet with lawmakers using a twitter and e-mail to try to pressure than the other way to say look we realize there hasn't been an election since the newtown shooting but we will remember whether or not you voted for this next year when midterm ochers. we will do everything we can to get rid of you if you didn't, and i think that will be a test of the other side. do they spend enough money, mobilize enough people in the boat people who didn't vote for the way people were asking wanted. >> host: front page of the post this morning to see this headline obama to praise colorado lawmakers traveling to the state today she will urge congress to follow the state legislators and act quickly on gun restrictions.

>> he's going to have the hartford in connecticut and we will have some very stringent gun walls as well. colorado, an example of a purple state if you will, moving quickly after the movie theater shooting out there to make these changes and there was a good mix of what could possibly be considered by washington to have a background check bill and some limits on the side of the ammunition clips, but again the states that are considering legislation appear to be moving quicker than the congress at this point which is known to happen but there's a lot of frustration pushing congress why is it that the states can move so quickly and just deal with it in the state why can't the congress do it especially when there was a proposal for the majority that want gun trafficking, they spend it back

on the checks they but like to see the ammunition magazines and yet congress hasn't acted. >> the hartford current front page of that newspaper this morning has the headline the governor will endorse the gun legislation in a vote that is set for today. let me ask about the nra yester day who led a study for that group, $40 million. talk about their ideas for putting the armed guards in school. could that get a vote when the senate takes up legislation? >> we expect part of the democrats and the senate in the proposal is a program that would reauthorize the provision that would reauthorize the justice department program that provides money to the school district's interested in revamping the school's security program. this is a barbara boxer susan collins bill that actually expires and it used to be like

$20 million. boxer initially wanted $100 million for this but in talking to susan collins agreed to get it done to $40 million. the concern with the republicans saying there you go again trying to spend some money you need to find a way to offset and you will notice yesterday. they would say look lonely would it be more spending we don't need to say any more i vote for this. so regardless it was under serious consideration to what the nra wanted because let's say there is a school district out there that wants to take renovations on the nra they could receive the grant program and they were given money and they could do what ever they wanted to do. >> host: real quickly, and o'keefe come in the house are

they going to take action? >> guest: bottolfsen it acts. every few days to check with the house judiciary committee and see what is going on? we are still talking about it but you aren't going to see significant movement on this until the senate acts. there is a bipartisan gun trafficking bill put together by the democrat cummings, carol maloney and that would do with the proposal does, make gun trafficking a federal crime. the democrats have been working on another series of proposals and we are led to believe there could be as many as a dozen house republicans willing to step up and support this but i suspect we will be watching what is going on in the senate very carefully before they actually come out and do anything. regardless of the house won't move until the senate read >> o'keefe with the "washington post" thank you for leading about this morning. appreciate it. >> guest: thank you.

it's really sycophant this has been preserved through all these years. at one point there were probably 30 to 40 of these now a round of the salt river valley and only a couple of them have survived. most of them are much smaller about a third to a quarter of the size and the sister around that survives is also. so a lot of those were destroyed and they survive. it offers an opportunity to study, learn about their lifestyle and hopefully learn something about how complex the social and political organization was. >> my voice thought that archaeology one of the great things we have about archaeology is that when we look into the

past and see what people did, like building these canal systems here i think it gives you hope for the future because if they could do this in the desert with digging sticks, what is it we can't do? former wall street executive greg smith reza resigned from goldman sachs last year and and not in "the new york times" about the firm's changing culture and loss of credit focus. he's since written a book called why i left goldman sachs a wall street story. he spoke to stanford university students about why he quit and

the ethics of the wall street investment firms. this is just over an hour. >> political economy here at the stanford graduate school of business. this event, featuring greg smith and is co-sponsored by the center for ethics and society that has a year long seminar on the ethics of wealth, so there t are other parts of that seriesar that you might find interesting. ..of interest to you going forwd throughout the year. before we get started i want to say a few things. first of all greg is due at the bookstore at 6:00 p.m. so if you have detailed conversations you want to have with him that might be the appropriate forum for that. this is being recorded for c-span so this is for future brad cast on c-span. cast on -- broad

c-span. we have microphones. greg will talk for about an a half and hour and once you get questions head to a microphone head and he'll call on you. he graduated from here in the class of 2001 and immediately went to work for goldman sachs. as you probably know from reading "the new york times" reresigned last march in a high profile way that a lot of people argued about and a lot of people at the business school argued about. the core point he was making was at it because greedy type of firm and but greg's argument that had changed in the operation of goldman people were more focused on their personal

success or the success of their sub unit or the profits they could make in a short run. o this is a topic that was controversial and i hope we can have an interesting dialogue between greg and the people in the audience who probably have all sorts of different views to this question. welcome back to stafford and we elcome what you have to say. >> can everyone hear me ok? is that a yes. like the professor said the first time i ever came to america was the day i arrived at stay ford. so i associate the school with a lot of great things.

it is great to see a lot of familiar faces. so for the students i was sitting where you were about 15 years ago. although the business school did not look like a hotel then. it looked less francecy. a few things i will tell you about before i start. i'm from south africa. i have a slightly funny accent because i lived in california for four years, new york, 10 years. so when people ask me where i'm from i tell them i'm from rooklyn to confuse them. when they get quite confused, i say, yeah, east brooklyn. that confused them even more.

i hope everyone can understand may. i used to have a ponytail, which is also hard to imagine. a third fact about me, i started at stanford as premed. i started the economics and premed track at the same time. ultimately, i decide to go into he business world. just to get a sense, can i take a quick poll -- who are undergrads in the audience? and business school students? and members of the community? faculty? great. we have an excellent and diverse udience. you will have a good dialogue, i imagine people are split on these issues. a couple things i will say -- the professor mentioned the op-ed i wrote about goldman sachs. everything i said i very much believe is true to the

industry. i do not think -- goldman is a smart firm and excellent firm at what it does. i do not think it practices are very different to the industry more broadly. when i wrote the book and the op-ed, i was using my career there as a view of what i think has become conflicted in the industry. the second thing i would say, i think a lot of people would would want to classify my views or this talk as in the occupy wall street camp or a different type of camp. i would say, i am very much a capitalist. i just have the view that free markets imply that the playing field is fair and there aren't a lot of conflicts of nterest.

a big thesis of my book and what i was trying to get across in the op-ed is the fact that capitalism, at least in the financial industry, i no longer think is on an even playing field. i think advantages are stacked in favor of banks and against their clients. i will get to this more later on. let me tell you the three things i will discuss today. the first is, has anything really changed in the industry? certainly when i wrote the op-ed, a lot of people said, things have always been this way. or, wall street has always operated in a certain sense. i will tell you how, at least since i was sitting where you were 15 years ago, in my opinion, things have changed. the second thing i will tell you is, with all these changes, how

do banks exploit conflicts of interest to make money in a way that i view as unfair at best and potentially very systemically dangerous to ociety at worst? then, what needs to change in order to fix this and why hasn't enough changed? on that point, i would ask, how many people in this room have heard of the dodd-frank act? how many people think the dodd-frank act has been implemented? 2.5 years since dodd-frank was passed, less than one third of it has been implemented and more than three quarters of the eadlines have been missed. millions of dollars were spent lobbying against it. perception that conditions have changed -- i want to show you

guys why they have not changed. why obama or romney or any number of politicians would want people to think. starting with the point of what has changed, i think there have always been practices on wall street that are not great and are dubious. the simplest way to mark what has changed is look how banks make their money. and i joined the firm in 2000, when i joined wall street, at least half the money was being made in the original things that made finance get called finance. wall street finance, things that help companies raise money. they acted as an advisor in many apacities. when i joined, about 60% of goldman sachs also revenue within the banking side of the business. there will always be conflicts,

but there aren't less complex than in the trading side of the business. fast forward to 2007, close to 80% of the money is being made in the trading business, which is a very marked change. i do not think people can debate that as being non-factual. with that kind of revenue change does is leads to behavioral and ultural changes. what occur that allowed this revenue shift to change? three main things occurred around the time when i was joining wall street. the first thing, in 1999 there was a thing called the glass-steagall act separated commercial banks from investment banks. it was repealed. in 2000, there was a thing called the commodity futures modernization act which essentially took complex securities called derivatives and deregulated them. it allowed the trading of

derivatives to move off exchanges and basically into the dark. the third thing was, a thing called the net capital rule was overturned. hat that did was allowed banks to increase their leverage - if you have $1 you can effectively lev it up by taking bets 10, 20, 30 times the amount by borrowing extra money. from the early 2000's to the mid 2000's, banks took leverage from five to one up to 35 to one. with these three things, which were all regulatory in nature and all lobbied for by the banking industry, it became very clear that as a professor said, the old model of long-term

greed, which was the motto goldman sachs had for many years, which essentially said if we do right by clients over the long term and maybe turn away business in the short term which can affect our reputation, they will keep coming back to us. we will have a collaborative relationship with the client as a partner and they keep paying us and keep doing business with us because they trust us. this shifted to a model i would call short-term greedy, which ultimately makes more profits for individuals and for the firm in a short-term but in a long-run standpoint does not serve your business well and does not serve the society well. because potentially you are doing business that is toxic to your clients and ultimately endangers the system, as we saw in 2008 where merrill lynch, aig, they had taken such huge risks that it ultimately brought the whole system down and the government had to come in and

bail the system out. so we talk about all these regulations occurring -- what basically happens is it becomes clear it is more advantageous for the bank to start betting with their own money. when you can take levered bets of 30-1 you may start seeing a client more as an information provider to help you bet more smartly as opposed to seeing your client as a partner you help to make returns on their money. in the early to mid part of my career i saw this cultural shift occur. the firm started seeing what the biggest mutual funds and pension funds in the world were doing and started implementing their wn bets using this information in a way that was not insider trading technically but allowed banks to use this big picture sitting in the middle position o bet.

goldman sachs trading revenues in 2002 were $5 billion. i 2007 it was $38 billion. it is -- businesses do not multiply by five or six times in five or six years unless there is some meaningful shift in the mindset. ultimately that leads to a what i would call a behavioral shift. it does not happen overnight. if people are being incentivized to use my information to better the firm's own money and nobody is telling them there is anything wrong with that, it filters up and down an organization. this shift occurred everywhere on wall street during that period. a few examples to show this mindset shift, in the last year or so, countdown what i call the

scandals that show this kind of swing from the fences behavior. you had mf global, a futures brokerage in chicago, where the head of the firm started making proprietary bets on the sovereign crisis in europe and alternately the firm went bankrupt. there was a scandalous situation where they were potentially using customer money to fund these bad bets. secondly, in the last few months we all heard about the libor rating scandal. libor is an interest rate that affects hundreds of trillions of dollars in assets throughout the world. this is, i would say, a example of this, where traders were collaborating with each other to set an interest rate because they knew they would make more money for the firm. look at the facebook ipo -- we can argue endlessly what is facebook's fault or morgan stanley's fault, the investors

fault, but certainly a manifestation of this let's swing for the fences and try to get as much out of this deal as possible. let me go on to point two, to explain how banks make this money using an analogy i used in my books. if you compare wall street today, 75% of revenues come from trading, to a real casino. not everybody likes gambling, but whether we like gambling or do not, when you walk into a casino you can have a lot of faith that the rules are not going to change during the game and that there are cameras all over the floor and that there is a regulatory body that for the most part is keeping an eye on things. the other thing i would say is the casino, the house is not allowed to take bets based on what everybody in the casino is doing. it is what i call an objective counterparty.

let's run through this analogy a little bit. if you think about an investment bank, they are not dealing everyone cards. let's say at the table is a pension fund, a hedge fund, a mutual fund, hundreds of billions of dollars sitting at the table. that bank, or the dealer, can see what all those people are doing and can then go out and use that information to place their own bets. you would expect someone not to lose very often if you could see everyone's cards. this is very much borne out in an example we see every quarter where banks have to release their results on the trading books for the whole quarter. there are many quarters where a bank will literally make a profit 100% of the time. hat is like batting 1.000. i am sure most people in this room invest in the market.

if you make money 50.1% of the time you are probably outperforming any people in the arket. it is very hard to understand how trading books can make money 100% of the time unless you have some kind of asymmetric information advantage. that is where i would come back to the analogy of you are seeing what everybody else is doing, so you can bet a lot smarter with your own money. the second part of the analogy, i mentioned the cameras. what happened with the deregulation of derivatives is gambling can be taken to a back room where there are no cameras and no one is tracking who is losing a lot of money and making a lot of money. this is the example of lehman brothers and bear stearns and merrill lynch, where no one knew how much risk they had on their books. it turns out they had all sorts of risk and nobody in the market knew or understood them.

this is the big danger of business being done in an opaque fashion, in the dark, in a very complex nature. i would argue that ultimately you need to bring began pulling out of the dark room and bring it back into the light. in exchange, where everyone can ee what is going on. to continue a little with the analogy. this is what i think is the most dangerous part of the way business is done on wall street today. the dealer. when you are playing blackjack, i think everyone knows the rules. if you get more than 21 you are bust. there are certain statistical probabilities you should and should not bet on. when you go to a casino, does anyone in the audience expect the dealer to give them bad information? for example, where the dealer is actually telling you when you are on 19 that you should take another card? o one would expect, at least

when i have been to casinos, -- the dealer is kind of on your side and somewhat friendly and will tell you. you often see people who never gambled before who will take another card of 19 and ruin everyone else's hand. the dealer would like to tell ou this is a bad idea. i think you have what i would call an implicit sense of trust, we do not expect the dealer to misguide you. what sometimes happens on wall street is a client or investor will get told to do something that if they understood the ules of the road very well would know is not in their interest to do. yet a wall street firm will tell them you should do this because they're firm might make 15 million or $20 million off of this. they are not technically doing anything illegal. that person walked into the casino. they are responsible for their

own actions. i think this is where a big misunderstanding comes from. many of you remember, in 2010 there was a big sec lawsuit against goldman sachs. there was a big hearing in front of carl levin where a lot of swear words -- one particular word was used over 20 times because of how bankers spoke about these deals. the big argument for why it was ok to sell someone something without full disclosure or without telling them your intention was this idea that everyone is a big boy. if they come to play they deserve what is coming to them. even if there is a sense of deception or a sense of misleading them. now, i think a lot about the words fiduciary duty.

this is a word thrown around a lot. but the essential meaning of it is that when someone is coming to you for advice, if you are bound by a fiduciary obligation you owe that clients, that person, the duty of telling them what is in their interest in what is not in their nterest. over the time i was at wall street, it has turned into the sense that a fiduciary duty is not owed to anyone. the big problem with that is i would argue many clients with hundreds of billions of dollars of assets to not understand that. i will give you two examples that ultimately led to me writing the op ed. i would like all of you to think about this as an ethical dilemma, especially since we live in a time today where the idea of ethics versus legality are very different things. it if something is technically legal and will not get you sent to jail, a lot of people will do hat thing.

an example, we recently had a terrible storm, hurricane sandy. everybody gave donations to the red cross society or any number of charities. i think what the general public does not know is that red cross, every university, stanford, harvard, teachers pension funds, governments, are the biggest fish in the market. they have hundreds of billions of dollars of assets and are what i would ask is, as a hypothetical example, if the red cross society came to you and asked to trade a very competition derivative product that was going to pay the firm $20 million yet you knew it was not in their interest, but it would not necessarily get you sent to jail because the government classified it as sophisticated. would you do that business?

more and more i saw the attitude and behavior moved to a point where yes, we will do that business because they are a big boy. i would argue it has reached a point where because of the asymmetric information i told you about not everybody is on an even playing field. i think more needs to be done to prevent that kind of behavior. the second example i would give you is a very powerful one. for helping me make my decision. the european sovereign crisis, which is still boiling but we may remember last summer or the summer of 2011 when it looks like portugal, spain, italy were teetering on bankruptcy. i would go to trading meetings every morning and our traders would have a very negative view on the european banks, yet we were being asked to go to some of the biggest investors in the world and try to convince them why the european banks were such

an attractive investment, purely because we did not like the investment and wanted to sell the banks but we needed somebody else on the side of the trade to buy the banks. if we were just talking about some arcane investment that did not affect anyone this might not be so relevant. but i would go to my desk and i would see the biggest banks in france and all over europe moving up and down five percent- 10% a day. largely driven by this idea that every two days to drum up business clients at banks across wall street would be convinced that today's the day to sell, tomorrow you should buy, now is the time to panic. the truth is, traders across wall street did not really believe conditions were changing on the ground every day. to me this started having real world impact. millions of citizens across europe are affected by the fact that their governments cannot get their act together and banks are trying to drum up business

in order to make their profits at the end of the quarter. this ultimately became something that i thought crossed the line of the letter of the law versus the spirit of the law. ethical versus legal. it got to a point where i felt this was not the type of business i wanted to do anymore. the final point i will talk about before i take some questions and answers will be what needs to change in order to fix the system in my opinion. one thing i would say, which i do not expect a lot of people know, is that the five biggest banks in america are now bigger than they were before the financial crisis. whatever people claim or do not claim, banks still have an input said, and i would argue almost exclusive, guarantee that government will support them.

just to explain a little bit, there was an example last summer where a jpmorgan trader who was nicknamed the giant whale or the london whale basically took a massive debt, lost $6 billion for the firm, got a wrist slap, lost his job. the person who ran the group over the course of her career made more than $50 million, and left the job. if that loss had been $200 billion instead of $6 billion the thing that happened to the person who took the trade would be exactly the same. they would get a wrist slap, leave the bank, and a society would have to bailout the bank because of this existing implicit and explicit guarantee. anybody who talks about free- market capitalism, we saw in 2008 when faced with the idea of

are you really going to let the banks fail, the truth is the government was not willing to take the risk and see what happened. everyone on wall street knows that. there is now incentive to swing for the fences and do whatever you can to maximize profits because of the trade goes bad you will just lose your job. everyone has to bail the banks out. i think what this amounts to today is what i call a privatization of profit and a socialization of downside risk. that is still in force today. anybody who claims it is not in a force is not, in my mind, telling the truth. why is not enough done to fix this? i would -- at the end of the book i point the finger back at politicians. the truth is that i think the thing we should all be most outraged about is, look at the senate banking committee, who are the firms that are giving

them the greatest campaign contributions? goldman sachs, jp morgan, morgan stanley -- look at the regulators. the hundreds of millions of dollars lobbying in order to kill regulation. this is very counterintuitive to me. a way to kill legislation in today's day and age is not to get rid of it or to get it struck from the act. it is to fatten it up. this was not obvious to me at first. a thing called the volcker rule, designed to completely eliminate proprietary trading, banks betting with their own money. it started out as a two-page document written by two senators as an amendment to dodd frank. two years later there was something like 700 pages. banks realize that if they can get the law firms to exert hundreds of loopholes and amendments you ultimately reach a point where the law is so

complicated that nobody can actually -- you have achieved a victory were nothing has changed at the end of the day. we need to say the politicians, number one, why do you not have the political will to actually fix a problem that affects everyone? banks can still be profitable, can still do things that serve economic prosperity, raising money, helping companies merge, but when 80% of bank profits are coming from trading i do not think of banks or are being honest with the public with how their money is being raised. look at commercials and tv for citigroup goldman sachs or jpmorgan. you would think they are in the business of helping new orleans rebuild or giving money to charities. certainly there is a significant amount of philanthropy on wall street. but i would say to you that the

amounts of money made by investing in urban communities is less than 10%. i think there needs to be a greater sense of honesty, where people are upfront and say 80% of the money is being made in a business that the public does not understand, frankly politicians do not fully understand, and i would say to you regulators are not resourced enough or nimble enough to understand things because they are so complex. so what i am advocating for is a return to the old long-term model where you do business, you make money, the clients make returns, banks can still be profitable. and people who do things that risk the systemic safety of the economy are held accountable. the way to do that, and i'm not a huge fan of regulation, but i think the three big things you need to do. one is derivatives. you need to bring them back the light. you need to bring them onto

exchanges. proprietary trading, through the volcker rule, you need to out live. the law does not have to be 700 pages. it can be one page. a lot of times banks will hide behind market making or hedging, which is a more competent discussion. what i would tell you is it is a way to hide behind something that will let you continue to do proprietary trading. the third one, which i'm interested to hear what people in the audience think, is about our bank still too big to fail and are they too big and too complex to manage? i would say they definitely are. i would say there is critical mass building where you do not want to be destructive of the banks but when they are still so systemically dangerous is there merit to making them smaller? spin off the trading business from the retail side? i would argue that yes, there is merit to that. with those three things, i will leave it there. thanks for listening. i will open it up for questions.

[applause] >> first come first serve? go ahead. >> thank you for speaking. it seems like a lot about what you are talking about was a policy analysis of what the situation is on wall street today. but there are a lot of us in the audience who are interested in taking those issues the way you described it from a personal perspective, if we were in your shoes, what is our duty and what is the best way to effect change? one thing that i noticed was since you wrote the op-ed and attracted a massive amount of media attention, a lot of that momentum seems to have died down over time. there does not seem to be the same degree of scrutiny over goldman or wall street generally. it made me wonder, maybe part of

it is because publicly publicizing your reason for leaving goldman sachs, even potentially sympathetic employees at goldman think there is some pressure to defend the integrity of the firm because they are attacked from the outside. perhaps you faced more resistance than you would've had you taken this internally. i'm wondering, given the information you know today, if you had to do it all over again would you think it would have made more sense to have the same content of the op-ed but not take it to the "new york times" but e-mail it to every employee in the goldman sachs worldwide directory? >> that is a great question. there is a way to send something to everyone in the global directory, which everyone fantasized about at some point. if you have mistakenly sent an e-mail to everyone. what i would say to you is it took me -- in the book, i say i wrote the op-ed over four months.

i went through a process of having dozens of conversations, first with the people sitting around me. behind closed doors, a lot of people on wall street feel a sense of angst about the sense that the game could end any day. i think everyone, 95% of wall street, are fundamentally decent people. but i think they're being asked to do things that, as i have been talking about, step over the line of what i think is ethical at times. what i would say to you -- i do not think goldman sachs is the problem. i think this is a systemic problem. i know the professor was saying there is a real temptation to think that if we send two or three bad eggs to jail the problem will be fixed. the point i tried to get across in my book is that this is not a problem about a few bad people

making bad ethical decisions. this is about a whole system that does not just encourage people to make these decisions, but incentivizes them. their bonus will be directly determined by how much they bring in. i've had conversations to check with people who felt similar. i also had conversations with goldman partners behind closed doors, half of whom agreed with me about these ethical lapses and long for a time about returning to this long-term agreement tally. it gets to a point where it is the golden goose -- as long as it is paying people money, there's not a lot of incentive to pull the curtain back and actually change the system. what i would say to you is that there are a lot of people in difficult situations. not just relative to the world, but people who have kids going to private school, all sorts of bills. living an expensive life.

by sending a letter to people internally i could very quickly see through my conversations with people, including a couple in the management committee. by the way, i think this applies to any firm. there is not a lot of incentive to change something. if you are doing something and are not going to jail are going to trouble for it, in my opinion by talking to people about it internally you will not have an impact. i think this problem is as big as politicians and regulators not understanding the broader problem. alternately i decided i was going to leave. i did not think there would be merit in trying to say something publicly -- i did think there would be merit in trying to say something publicly, not to destroy profitability on wall street but may be restored to a more stable fashion. giving you an example for the business school students. look at, is a short-term greediness actually good for goldman sachs's business or jpmorgan's business? i would say i do not think it is

good for the business. look at how the stock market values banking stocks. banking stocks are valued at below value. even the markets does not like this model where there is no predict ability, no sustainability, no long-term orientation. look at jpmorgan's earnings statement. there is zero disclosure of how the money is made and where it is made from. investors cannot value companies correctly. i just thought there would be something to be said for saying something publicly. i think the people from within the industry do not say something -- nothing will change. we will go through a cycle where every seven or eight years we have bubbles that expand and ultimately burst. let's hope it does not happen again. >> that is pretty discouraging. you bring out a really good point that the process of

regulation seems to be kind of hopeless. big money will defeated over time by boring from within. who watches the watchmen? is that an ethical thing we have to have, to change the structure? how do you see the move from these great investment houses moving from a partnership to a corporation, and do you see a correlation of that, the emphasis on a fiduciary relationship versus a counterparty relationship. do you see that? >> i see that as being a huge contributor to the problem. goldman sachs was the last large private firm on wall street. when you are a private partnership your partners? incentives are much more aligned with clients. if you do a deal with the government of libya and it ruins your reputation and people pull money from your firm, you will

feel immediate pain because your capital is tied up. when these firms became public it became much harder to take ownership of the problem. i do think that it is an issue. it is hard to go back in time and privatized firms, but when they were private incentives were aligned. i think client interest was better served and banks were less dangerous because they were less big. the reason banks became public is because of this move in the late 1990s to create what i call these banking supermarkets like citigroup. in order to compete every investment bank had to get bigger by getting public funding. if we could go back in time and reverse glass-steagall being repealed, reverse the derivatives being deregulated, reverse the leverage issues, in my opinion i do not think we would have had this scandal as bad.

the financial crisis could have still occurred, but i do not think it would have occurred on the same scale. alternately i think the way you fix it now is point the finger at politicians and regulators and say, we elected you to understand what is going on. if the system is too complex to understand you need to make the system less complex. if you are being corrupted or unable to be objective because people are giving you money and lobbying and funding your campaigns, the a left rate needs to vote those people out of office and say, this senator is no longer objective. this regulator running the sec no longer understands what is going on. i have said the public is not more tuned into this issue. my biggest goal in the book was really to write this book not for a wall street audience or anyone who knows anything about finance, but to write it for people who know nothing about finance. to pull the curtain back to

show. there are a lot of good things going on wall street, but a lot of conflicts of interest. only if the public holds politicians feet to the fire will things change. my hope -- an earlier question was how can business school students and college students change things. one thing, speak to politicians, hold them accountable. fill yourself in on issues. when you do work in finance, act within your own ethical compass. one by one people can change things. but i do think politicians ultimately probably harbor the largest amount of blame in this. >> this was a great segue to my question. what are your plans for the future as far as her career? i think you would be great in congress are working for the sec or the department of justice with your background in values. i'm sure there are people in this room who would support you. >> thank you. i told some people i am becoming a dj, which is not a very popular thing, as a joke. in the short term my plan is to

try to bring awareness to i would say the motion or term crisis, the fact that dodd frank is dying what i call a very slow death by a thousand cuts. i am sure everyone tuned into the presidential election. not one candidate talks about financial reform. does not matter if you are democratic or republican. there is literally one person running for senate to even mention it, who is a elizabeth warren. we can agree or disagree about whether her views are accurate or not, but what i do commend her for is that she is talking about it. if it affects people's lives, politicians should talk about it. i want to give talks like this to give a little bit of awareness to what i think is a serious problem.

longer term, i would like to be helpful to congress and to the sec. i have been in touch with people in congress, and i hope to be helpful to them. in terms of my longer term plans, have not figured it out yet. a lot of people said, you have burned your bridges on wall street, you will never work there again. but i think the point i make to people is that that is not what i hear from the public in terms of this idea of returning to fiduciary standards. the big players in the market are not hedge funds. hedge funds -- those investors account for five percent. the big players are teachers pension pants and sovereign wealth funds and mutual funds to hold 401(k)'s and donations and retirement savings. i would like to be part of the solution in terms of bringing a greater fiduciary standard back to markets. >> earlier in your talk you mentioned merrill lynch and lehman brothers and bear stearns as being three firms that were

overleveraged and operating in the dark. and they kind of disappeared. could you give us your thoughts on why lehman was allowed to burn up and the other two were rescued? >> it is a very controversial topic, which i think conspiracy theorists will talk about for a long time. but i was sitting on the trading floor when that happened. when lehman brothers was allowed to fail, any record checkers or fact checkers should go back and look at the editorials the following day. liberal periodicals and conservative periodicals praised hank paulson for drawing a line in the sand and saying, you know what, if you take irresponsible risk in your leaders are not willing to fix the problem or show the

right amount of transparency, you are going to be allowed to die. ultimately when the government reversed course on aig and molto other things i think it showed a tremendous amount of uncertainty in the market area everyone panicked, and it led to more problems. looking back on that, i think there was a mismanagement in that what markets like, anyone who invests in stocks will no markets like consistency. they like to be able to see what will happen in the future. the fact that every day was a guessing game of who will be allowed to live and die was a very dangerous thing. i think perhaps everyone should have been saved or everyone should have been allowed to die. i think everyone would have been scared to see what happened. that is an extreme view. but ultimately i think history will look back on it and the crisis probably would have been worse if -- i say it is hard to say.

you need a crystal ball in order to tell. >> first of all, thank you for speaking out on wall street. a lot of paychecks are dependent on not speaking out. i wanted to thank you for that. there is precedent for prosecuting people for securities fraud, like in the 1980s during the savings and loan scandal. i wanted your thoughts about how or why there have been zero criminal prosecutions of any wall street executives. >> an excellent question. i think the question everyone in america asks. the reason is quite simple. the laws are not, i would say, on the level that allows criminal prosecutions to take place very easily. this is what wall street wants. right now you need to prove criminal intent to defraud people. look at any number of examples, the mf global example, a particularly egregious one where

jon, the former head of goldman, a former governor of new jersey, essentially $1 billion of money disappeared. the reason they will tell the public that nobody went to jail or was prosecuted is because in order to prove intent that they were trying to defraud people, it is a very hard thing to do. i would argue -- as i said, i would not classify myself as a pro-regulation person, but any thinking person realizes that if everyone is driving race cars and there are zero speed limits and everyone is just mandated to self regulate and not crashing the people, alternately you will get bad actors to crash into other people. i think the laws need to be more strict. the hope was that the momentum coming out of the crisis would be used to change those laws,

but unfortunately things are fading into memory. frankly, that is what banks want. they want us to receive into memory. personally i thought the jpmorgan example was something that should have been a much bigger deal. it was very symptomatic of this reckless, we gamble and if we win we keep the profits and if we lose we do not have to worry about it. it was an opportunity for congress to change things. someone speaking at the business will next week has done great work prosecuting insider trading. go for the low hanging fruit. it is easy to prove a billionaire used misinformation in order to make some money for himself or herself. the truth is that insider trading does not actually affect that many people. the real issue in my mind that the justice department and lawmakers should be going after is the systemic issue of, i mentioned earlier the

proprietary trading. i would tell you it is absolutely going on. it is just going on under what i call a new term, hedging or market making. we are doing this. the truth is in my mind much less is being done in the service of clients. much more is being done by using the fact of serving clients to make yourself money and place your own bets. i think congress needs to become a lot smarter fixing the rules. if they can fix that rule i think it will be more valuable than sending people to jail. the great danger of that is then everybody says we have fixed the problem. the real problem is much greater and much more systemic in my mind. >> you mentioned mutual funds are among the major players in the market. do these systemic factors that you mentioned have a significant impact on what i will call mainstream mutual funds that invest in equities or fixed income as opposed to the fringe

players? should we as individual investors have concerns? >> absolutely. i will give you a couple examples. may 2010, there was a thing called the flash crash where the market literally dropped 12% in one second. nobody could explain what happened. people who researched the issue speak about a thing called high frequency trading, which wall street firms have computers that they get to the stock a millisecond before anybody else. this creates a lot of volatility. i would argue that mutual funds, no matter how vanilla, are still investing in stocks. if the market cannot be assumed to be fair and without uneven advantages, i do think people should be concerned. i do think mutual funds should also be held accountable not to use products like derivatives when they do not fully understand them.

a lot of the time they don't. >> thank you very much. >> i have a question that is related to some of the answers you have provided. i think all of your responses have talked about regulations that are instituted and also talked about incentives and perhaps disincentives for some of the behavior that he this. i would like to understand, given the complexity of enforcing regulations and what you have advised the audiences and future generation of financiers in wall street -- what would you recommend on the business side aside from the legal consequences of violating regulations, something that relates to the financial rewards? in that context, if you could also tell us what differentiates

what goes on here in the us versus the european market? >> good question. i think a lot has been raised about compensation on wall street. i think one of the ways wall street firms will defend paying people 10 million or 20 million or $30 million is that if we do not do it they will go somewhere else and do it. i think this is a circular thing that keeps going around. if firms decided to bring incentives back in line things would change. the way you do this is you have to tie compensation and incentives to the performance of your clients, and have to tie it to a long-run orientation where you take away the incentive the london whale had to swing for the fences because they wanted a big bonus in year one. you have to make compensation based on a five-year or 10-year record where clawbacks are very strict and are enacted.

yesterday i am sure many people saw jamie dimon, ceo of j.p. morgan, his compensation was cut because of the london whale yesterday. people might say that is a great victory. i would say that to me it is more of a band-aid, trying to show the public. there needs to be a more systemic change in incentives. the truth is that human nature and agreed it is something we as a people in my mind cannot regulate. if one had to fall some of the protests that took place around wall street, what i think is effective is to protest something very simple and factual, like bring derivatives onto exchanges. outlaw proprietary trading. do not give people the ability to swing for the fences. you take away the product they are using to do that. i think you try to tell people you need to make less money or

we are going to your pay at x amount does not -- i do not think that jibes with american capitalism as i see it. people should be able to get rich and make lots of money. i just think they should be required to do it in a transparent way that does not endanger other people. i think the easiest solution in my mind is to hold regulators accountable, hold politicians accountable, and take away the things that allow people to swing for the fences by regulating the markets. in terms of the question about europe versus the us, europe i would say is more like the wild west than the us. the last chapter nine book, when i moved to london i actually called the chapter the wild west because there is very much a greater sense of anything goes. i would say the us is a leader in a lot of these products, and the europeans follow.

if the us can get these laws right, one reason congress doesn't want the passes he does it they do it here banks remove the euro. i guarantee that if the us changes something makes the system more responsible they will be a sense of arbitrage around the world where everybody will try to get somewhere else, but ultimately the us is the strongest market in the world and i think others will follow if we do things here. >> in terms of your second point of the asymmetric nature of information and the casino analogy, when we talk about deposit creation like what is going on right now, the last month of last year there was $220 billion of deposit creation in the us system, it is working its way into fractional reserves and then the banks are obviously hedging as you pointed out, possibly not in a best interest.

in terms of the deposit creation, the largest in history, who -- where is that money coming from, and in the casino analogy who is that person? >> i think deposit creation comes from the fact that you look at retail investors and how much they have been investing in the stock market. since the flash crash in 2010 it has dropped significantly. i think there is a sense that people just want to put their money in a bank account and keep it safe to an extent. i think it is the fearfulness that come to invest in the market. do i believe that a big bank like citigroup or jpmorgan is using those funds recklessly? i do not think so. but are they proprietary trading? yes. that was the example of the london whale. i would hope that the system and

the stock market become more transparent. investors do not feel the need to put their money into savings accounts but in vast. because that has helped the market grow. >> you mentioned a number of banks that have behaved rather badly. what are the banks that have behaved well? that have been more profitable than the banks that paved badly? if not, you have a reversal. >> look at the canadian banks. just as an example. they did not have a unending leverage. they did not get the same complex products. they weathered the financial crisis just fine. i would say in the us, you look at banks like wells fargo that did not have a similar ratcheting up of risk and the

fiduciary responsibility, look at the more boutique asset management places whose interests were not all over the place and did not have all sorts of conflicts. i think they survived a little better. in retrospect i think banks like goldman sachs and morgan stanley and frankly jpmorgan were lucky to have survived the crisis. i think there was an effect occurring -- the government would step in and save. i think the people who weathered the crisis just fine were the ones who retained this fiduciary duty, where they were not betting against their clients, were not using client information to make themselves money. at the time they were less profitable but five years later i would argue they are a lot stronger and on less shaky ground. >> in the case of, was it because of any government regulation? >> it was. governments were not allowed to

take 31 leverage. there were not allowed to proprietary trade in the same sense. well we as americans want maximum profit and maximum capitalization, the speed limit topic is relevant. if you have smart curbs that do not allow you to make 50 times the amount of money but also do not allow you to lose times the amount of money, i think it is just smarter. >> i wanted to say, i applaud your courage. that was a great day to post on facebook your announcement and get feedback from friends and family. you talked about the ethical and legal dimensions of your decision-making process. this is your token seminarian question. was there a moral or religious dimension to that? >> you know, a theme that runs