emergency manager. that is unconstitutional, and it goes against the grain to what america is supposed to be about. we believe that the bankruptcy that has been filed since that time is premature and we know that the system that was used is talking about exploring this. these are cities in oakland county that are qualifying them, yet they do not have the imposition of one. and sometimes we are told that there is a city that may have requested it. we did not request it. and we believe that the filing of bankruptcy was premature. there has been no negotiation with the pension systems. ..

it's strategy. for those looking at c-span don't think about -- it's coming your city next. there are 125 cities all across america that after bankruptcy. detroit is now become the model. they want to even impose legislation nationally model

after the success that if cities in economic distress make them not qualify for any federal dollars. that's model after detroit pen. senator lindsay graham from south carolina who have nor federal dollars and senator cole from texas, who has so much money he can't count it through add ons. a senator from utah who was gotten $86.1 million for -- warren hatch, for the rail system. these are the guys saying because they did it detroit. they're not saying detroit. it's for detroit that some lse d on economic distress. we are here today to say it was premature. there was no significant negotiation. detroit is better than what we perceive to be. we have not seen the real

detroit. detroit an economically pillaged right now. [cheering and applause] economically pillaged right now. folks are not getting no-contract bids. folks are getting paid off too often. we in the city of detroit demand that we are treated better than what we are being treated currently. that's why we're here. that's why we say the bankruptcy is bankrupting i.t. that's why we are saying a number of models can be used. the new york model that was used in 1975, 77. they did not impose emergency management. they worked it committee. they had a committee that sat down with the president, with the local officials, we're saying that the nation has a $16 trillion deficit, no emergency manager, michigan has a deficit. no emergency manager. california has a deficit. chicago has a deficit.

atlanta has deficit. all the cities with deficits no bankruptcy -- no emergency manager. if it's good enough for them. it should be good enough for the city of detroit. >> all right. >> detroit is better than that. [cheering and applause] we will -- that amazes and articulated and so darn true. we -- on behalf of the organizers, i have such -- as we have seen from dr. anthony's brilliance. i think passionate and insightful examination of the contra -- contra additions between other municipality, state and government with an extraordinary amount of debt, and being in the

red. not being treated similarly. with that kicking us off, i'm going ask the rest of the panel to hold to our three minutes. [laughter] all right. the pastor of the church -- he has the holy ghost sympathizes with him. but the rest of us have to be earthbound. [laughter] so i know you inspired by the lord and others that are relevant to your particular world. let now turn to counselwoman joann watson who has been working tirelessly. she worked -- to had is a historic hero. i want to say that.

but counselwoman jo ann watson has been working tirelessly to develop constructive solutions to detroit fiscal issues. she can does these efforts and why the emergency manager -- she will discuss these efforts and why the emergency manager -- detroit's bankruptcy filing are not the right answer. i want to ask her to weigh in on that in her three minutes to help us put it in context. councilwoman? >> thank you, professor. i want you to know we are proud of you we love and honor you. [applause] thank god for congressman john conyers. i wouldn't be sitting here. i must give honor the only person that endorsed -- hired rosa parks for 25 years and gave her a salary he gave

her employment and health care benefits. praise god! first of all, the city of detroit did not file bankruptcy. let me hurry up and say t represented by the mayor, when you like him or not, and the detroit city council, whether you like them or not, the federal bankruptcy said freely that elected officials file for municipal bankruptcy. the bankruptcy law said the governor can approve said filing for it hasn't. it's not that the government gets to file it and approve it. you don't get to appoint someone with an agenda for bankruptcy and the agenda is clear if you look at recently released e-mails that came out weeks before anybody was appointed, anything e-mails that show there was a plan for bankruptcy.

there was a -- for bankruptcy. come on, somebody. what is happening in detroit is connected with the right-wing clam around the cub. the voter suppression. voter depression that is. halling all over the country. it's connected to what is happening in louisiana, and mississippi. and mother rosa parks was a -- back with the detroit board of education. when you consider that michigan [inaudible] as is a synergy for the republican and the black madonna . michigan and detroit it's no

accident. federal bankruptcy said you have to -- every other mean before you file bankruptcy. [applause] you can only file if you're an elected official. none of that is true. there have been unconstitutionallalty from the beginning to the ends. it we are citizen we ought to be held up by the constitution not beaten down. thank you, my friend. [applause] amen. >> she came in under time. she wins the award for brilliant articulation and timely

expression. thank you so much, council member, watson for that powerful statement. let me turn now to al garrett. al is the president of the detroit chapter of the american federation of states, county, and municipal employees. it isen deed the nation's fastest growing public service and employee union with more than a million and a half working and retired member. the members include nurses and construction officers, emt, sanitation workers and more. advocate for fairnd in the workplace, complen in public service. and prosperity and opportunity for all work families. we know that the detroit chapter along with other organizations is calling for the reds nation of kevin or as emergency manager. in particular, -- [applause] in particular, the coalition

cites mr. moore's recent comments where he stated, i quote for a long time the city was dumb, lazy, happy, and rich. we know repeatedly black politicians have taken to the public air waves to excoriate black people. i ain't say nothing else after that. we can't get used to that. hey not even an elected official. we are talking about, again, the vicious transmission of stereo type as the basis for public policy. we can't allow that to happen. the way in which the vicious stereo type operate obviously have a material consequence. they impact the public policy -- on behalf of the antidemocratic process like emergency manager. perhaps we can get brother al to elaborate the concerns that the

members of union have about the detroit emergency manager. was i'm sure he didn't think that his employees and his constituency are dumb, lazy, rich, and happy. thank you so much, brother al. >> congressman conyers and certainly brother anthony. as believe, where we are today goes to thed a thaj elections matter. that when we elect those who have no skin in the game who sit in the chair of our -- we're at risk. let exam that. all through this process, solutions have been offered to the leadership through the honorable we said number one as we sit down at the bargaining table and roughly honored 50 million with the budget.

and the may your of the city of detroit because the governor told him failed to take that contract e radification. $150 million. then we sat down with him a little earlier and said mr. mayor, here is a phenomena we have going on in the state of michigan. we have with a we call reverse commuter tax. what do i mean by that? the people who live in the city of detroit who happen to work outside of it don't pay income tax. and so what we need to do, mr. mayor, is go to the legislature and fix that. it has been the comment that the $124. we raise the issue two and a half years ago. there's not been one single deal passed and presented to rectify

that. what it's really about, there has been a decision made by those folks in charge that vote in the city of detroit don't matter. and for the state of michigan to move out of the doll drill that itself in. it needs a vibrant city. where are they going to find that? the city of detroit. it manifests itself this way. number one with, we create a crisis. what did a state do to create a crisis? revenue sharing was cut cramatically by the state and legislature. you take a significant portion of my income then you say half urban america your wainls watch you be in a deficit. that's one piece of it. the next piece is very simple. when they made a deal to pay a

flat revenue sharing to detroit they -- [inaudible] okay. causing fiscal crisis. we sat down with andy, the second -- what is he the treasurer of a state of michigan. he agrees there is $8 00 million of uncollected tax revenue. third. i'm going to shut up. it furtherlet exam what is going on. the same time the city is filing for bankruptcy. we're putting $36 0 million in a toy called a hockey arena. if we're too broke to take care of a pension of a folks who were guaranteed a pension by our constitution, who worked for a pension that is nobody gives city workers a pension. city workers by their

intelligent earned a pension. that's our money. [cheering and applause] understand when i say the conspiracy. you need to understand the game. i want to point back vividly to roughly three weeks ago on every station in michigan and on cable. you heard about the million dollar check that stayed in the drawer and blast the city workers and processed. it was only two weeks later that we found out they said don't process the check. guess what? that was not only the news. they didn't have a garrett browne saying they don't know what they're doing. that's what is going on. our first ought to be voting for

folks who are with us not just on a journey but here all the time. thank you. [cheering and applause] >> amen. i don't know why i'm up here. i'm just saying this is very important. we are going to ask our panelists to hold their comments to three minutes. but i know the inspiration from above comes down and incredibly important stuff. why step up, wrap up in fifteen second. that will be the way -- i'm not used to -- i'm used to overtalking not regulating talking. all right. this is god's punishment for me. i'm -- asking you to do that. otherwise you all aren't going to have no time to ask questions. do you want to hear them talk for four or five minute.

and you don't want it talk? all right. cool. they have three minutes. they have been taking ten anyway. what we're going do. we want you to participate democratically. i'm going turn now to miss rose. she's e detroit retiree sub chapter 98. rose asked me, so obviously we want to respond to the emergency financial managers and participated effort to make substantial cuts to retiree pensions, based on mr. or's asers they are underfunded. let have her explain how large the pension is and how unfair it would be to cut the pension of those who have given decades of their lives of public service we just heard brother al said there ain't nobody giving nothing. we created it.

this was created. many people give their lives to -- eligible for social security benefits. i want her to in three minutes address that issue and speak to how what a consequence that would have. what negative consequence that would have on these thousand of workers. >> the bankruptcy filed in detroit is to set a precedent for all workers across the country. we're not asking for a handout. we have worked, earned, and paid in to pension system. many of the retirees are living longer. we have retirees over 100 years old. the average pension is $19,000. that's the average $19,000 a year. that's the average for today. the retirees over 100 years old

a lot get under $500 a month for retirement benefits. what do you expect them to do? gate job at mcdonalds? we were there when the city needed us. and we expect the city to live up to their convictions on the contract to help us have a decent retirement. not -- a decent retirement. i say don't take away our pension. take away -- [inaudible] [cheering and applause] >> i'm stunned. thank you very kindly. [laughter] thank you for yielding back the balance of your time to the panel so very kindly. let me turn now to james. sorry. and brother jim partner and head of the special litigation and

bankruptcy workout group chap march and cutler l. l. p. he's a recognized expert on chapter 9 bankruptcy and written extensively about chapter 9 bankruptcy. we know that chapter 9 is not the answer. in all instances and the state and federal government have a role to intervene. and the citieses have no other choice but bankruptcy we have heard from several of the panelists already about premeditated strategies, so to speak, filing bankruptcy. i want brother to speak to than and discuss how other cities suched a new york and philadelphia able to avoid chapter 9. ic they present a comparable cases of alternative measures that could be adopted to avoid the emergency that we find ourselves in today. >> it's important to recognize that chapter 9 was never

intended to be the solution. it's merely a process. what you really need is not chapter 9 but a recovery plan. to help bring detroit back to where it was to provide jobs for those who need them. have the economic stimulus to the economy. as we all know and i sometimes say we're not overweight. we're too short for our weight. like wise, the new nice -- municipality needs more taxpayer to solve their problem. the first step is recovery plan. it brings everybody together. we're all in it together. bankruptcy is really known as the land of "let's name a deal qtslet get it done. first the recovery plan to provide the infrastructure. that's what they did in new york city and cleveland in '78. that's what they did in philadelphia 1990. and they also wanted to make sure what was sustainable got

paid. if you grow your taxpayers, increase your taxpayers by jobs in economic stimulus you'll be able to provide for. secondly, to keep in mind and the issue of pensions that which can be paid should be paid. the important thing is it may not be you don't want to sacrifice the services and infrastructure. you can pay as much as you can now. what can we do to solve the problem? first of all, there's a need for a safety net. the congressman talked about it. he was absolutely right. we need to put in a safety neat will provide what workers who work for local government don't get, which is the basic benefit they would have gotten if they paid to social security. whether that is an insurance program by the federal government like the bbgc, the state or the local government does it. we need implement it.

to ensure workers in buying in. we need buy to the recovery plan, they'll be able to be paid. if it fails, they'll be protected. if it doesn't fail, they'll bin creased tax revenue to pay what should be paid. the next thing is to make sure there's a dedicated source. not a promise. not pay when we can. not balance the budget by not paying. but a dedicated source to pay pension. it may not be everything we absolutely need. it will be sustainable and affordable. if we grow the city and the taxpayers there will be money in the future to do that. with that, there will be money in the future. and the problem will be solved. >> thank you, my friend. if you are going to read the

detroit and -- now we want to turn to our chapter 8 with anita baker. that's inside detroit. look, i don't make the record. i just report them. we want to turn now to john ae -- i don't know how to pronounce his name. how do you pronounce it? resident. brother. a professor at the university of michigan law school at an arbor. and internationally recognized expert on the field of bankruptcy and commercial law. he's a prolific writer and provides commentary. professor is prepared to talk with us today about how chapter nine works and the various issues that might rise from it. we want him to talk about that. we know that recently he was quoted in u.s. "today" saying that he thinks that the emergency federal erk fm will

prevail for chapter nine bankruptcy release. we want to talk about that. and finally discuss whether detroit's chapter nine is fundamentally institution -- constitutional. >> okay. i'm used to teaching postgraduate seminar. i might be in the wrong place. i would whraik like to make a legal point and a political point. and leave you with a tact cat point -- tactical point. the legal point i want to make there's a lot of talk that chapter nine requires all the creditors to be treated equally. i have heard both in public statements from the major players and on the media what we have to ask for the same concession from the pension holders that were asking for the bondholders. you'll hear it all the time. i don't think that's accurate of the bankruptcy law. i think what it says you cannot discriminate unfairly again

creditors. if you think that pension holders are dpirchtly situated from bondholders based on their welcomed, insurance, and financial circumstances, then i can understand an argument where it would not unfair discrimination to treatment that group differently in a chapter nine bankruptcy reorganization. number two, i would like to make a political point which i don't usually do as a professor. i think it's near unconsciousble to not pay people the pensions they have earned. [applause] for this very sound reason, we have a pension insurance program at the federal government that protects members of the private sector. we don't have that for the public sector. and -- i should point out that bondholders are able to purchase insurance for their investment. we have a gap with the lack of national hurricane --

insurance. what do we do about that? we try legislation as some people talked about. i agree with the person who said the problem is bigger than u.s. it's more than a detroit problem. it's municipality around the country. and this problem is not going go away. detroit is getting to it first. we reached a political moment where this lack of insurance and coverage has to be addressed, in my opinion. if the federal government won't do it, i think the state government has an obligation to do so. that's my personal opinion. i call this the tigerrous phenomena. the final point i would like to make is a tactical point, which is that this chapter nine bankruptcy if the unit goes forward.

indian it's a complex issue. if it goes forward, the narrative going throughout is just like a chapter 11 reorganization for corruptions but with a city. if i were negotiating an example for retiree to take the narrative and turn the way in chapter 11. for example, in chapter 11, you goat share in the upside with the good times. rather than take a straight doubt my fengs if it were to me. i would say that's fine we talk about restructuring them bhap i do get paid back in the future if these concessions were -- people get warrant and stock options. i think that applies to us as well. ..

d. than the bible says that the box is worse some of the food that the ox is trying with -- i am messing that quote up. we thank him. i want to acknowledge mr. napoleon who is here. [applause]

i want to turn now to another professor in our professorial lineup. professor melissa jacoby of bankruptcy law professor at the university of north carolina in chapel hill. and she has been blogging extensively and insightfully about how the bankruptcy court ruling has been handling -- how the ancop secours been handling detroit's bankruptcbankruptc y case. for example the bankruptcy court has appointed various individuals to help out including a mediator and the examiner so we want her to help us understand what's going on there and to explain what's happening in the case so far in what's likely to happen in the future. professor jacoby. >> good afternoon everyone. thank you professor dyson. it's an honor to be here with all of you. the courts did not ask for this

case i would say but now that they have it i want to tell you about what is happening. the federal appellate court decides which judge will get the cases you may know. emergency manager does not get to pick the judge. the federal appellate court picks the judge and i could have picked any judge in the sixth federal circuit. they suggested they were looking for someone who at the strong case manager because i think fairness and chaos do not go hand-in-hand. so they were looking for fairness and they were looking for a procedure that could facilitate negotiations. at least that is what was reflected in the letter -- thank you. i will take back 15 seconds as

mine. [applause] >> you can have 20. just speak up a bit. >> of course. is that better? so what we have seen so far from the bankruptcy court is i think an effort to protect the process without prejudicing anybody's rights and to create a playing field for negotiation. again i saying this i'm not commenting on the merits of the issues that have been raised here today which i think are very very serious and warrant discussion and none of them have been ruled out. none of them have been ruled out by what has happened so far but as professor dyson mentioned a chief mediator has been appointed and he in turn has appointed five more so the chief district judge federal district judge for michigan in a somewhat unprecedented move this ahead

mediator so we have six mediators available who are going to be mediating with the key players later in september. they are trying to signal i believe availability to work with and negotiate this case. the bankruptcy court mandated increased access to the city's documents that otherwise were segmented or kept away from people by a nondisclosure agreement and waivers and other things in mandated for those to become more available. the bankruptcy court approved the retiree committee. the city will have to pay for it but that is not a standard move in bankruptcy cases overall to have that. they could have waited. a couple of things that are going to be coming down the road. i think you know a big step in this case is going to be the eligibility question. that has not been determined yet. that is where some of the good faith questions that have been raised are going to come up.

they raise fact issues. there will be airing on those those that talks about those facts in a lot of objectors have come forward. there's discovery going on right now to ensure that those facts come to light. there are other issues that are purely legal or have been deemed that way and those are going to have a separate day of hearings. at the same time again i agree with the comments judge spiotto me that a lot of this will have to be negotiated. litigation is going to spend a lot of money and these issues all have to be litigated. we have seen that and that is not necessarily the way forward. thank you. >> thank you very much. my apologies, i'm sorry. >> i appreciate you trying to help me dr. dies in. >> thank you professor. after that expert update about what's happening wading in from

a relatively neutral legal perspective about what's possible consequences might be in the offering and what strategies might be adopted. it's always good to think a broader terms and again reasonable people may disagree but we all agree on the fact that people who are democratically bore participants of the democracy deserve the full weight and measure of that democracy. let's turn to krystal crittendon. [applause] [applause] that is real nice. >> that was. >> that is real nice there. >> you guys can pick your checks up in the lobby. [laughter]

>> yes. ms. crittenden is the former corporation counsel for the city of detroit having served under both mayor cockerelcockerel l and mayor bing. she has also served on a second report of the 2111 of the uaw. my father was a member of the uaw working at at the wheel brake and drone factory. [applause] we want you ms. crittenden to address the legality of detroit's emergency financial manager as well as the legality of the chapter 9 bankruptcy filing. >> thank you so much dr. dies in and thank you to congressman john conyers for having this forum. i'm going to stick to what i know which is being a lawyer and analyzing this from a legal perspective. we need to slow down. we need to make sure that this process on the front and is legal and there is very little

concentration being devoted to that. public act 72 is emergency financial manager at the cabin was appointed under. the problem is it did not exist at the time of this his appointment. michigan law is clear. michigan compiled laws says that i'm going to read this verbatim because it's very important. whenever a statute or any part thereof shall be repealed by a subsequent statute such statute or any part thereof shall not be revived, shall not be revived at the repeal of such subsequent repealing statute. the fallacy that we are all operating under is that kevyn orr was -- public act 72 was repealed by public act for. when we went to the ballot box and we voted to repeal public act for, public act 72 did not

spring back to life. the governor gave them a contract under 72 and then grandfathered him and under public act 436 but because there is no 72 there is no representative manager for the city of detroit. [applause] secondly in their haste to take this draconian action against the city of detroit the governor gave kevyn orr a contract which expired on march 27 at midnight. how many people in this audience know that midnight occurs at 12:00 a.m.? 12:00 a.m. was a wednesday morning. the new emergency manager didn't take place until thursday morning. so we were without an emergency manager for one full day at the time the new law took effect so therefore there should have been no grandfathering in under 436 assuming he was a duly appointed emergency manager. finally let me just say this and councilwoman watson is so correct.

under chapter 9 which is a federal law you cannot have an involuntary bankruptcy. no one but the municipality can ask the municipality go through a bankruptcy. public act 436 makes a clear and kevyn orr makes it absolutely clear that he is not answerable to the city of detroit. he is answerable only to the state of michigan and because you are a mayor and city council it is defective and illegal from its inception. [applause] finally let me say and i said finally which is an old lawyer trick. the proponents of this bankruptcy are saying that the federal court judge has to follow 436 which is state law that he does not have to follow the michigan constitution. it doesn't even make sense. the michigan constituconstitu tion makes it clear that the contract rights of those from

the city of detroit are protected. they cannot have it both ways. i am saying we need to slow down. we need to make sure the court has the authority in the jurisdiction to even answer all of these other questions concerning solvency and good faith right now. there's going to be hearing on september 18 in september 19. anyone who got a letter and was asked to show up and objects please do so. thank you. >> thank you so much. [applause] i am sure all the lawyers can attest to the fact that we are not used to hearing that much applause for a member of the legal profession. all of these sterling legal minds up here. it's heartwarming to hear that kind of applause. so i began with the comment of senator bird johnson state senator burt johnson to frame things so i have already read what he said.

let me introduce both senator johnson and susan young. senator coleman young's state senator coleman young and what a name he bears and what a heritage. [applause] he has certainly absorbed -- served two terms in the michigan house of representatives before being elected to the state senate. now, senator burt johnson is in his first term as a state senator representing the state district which includes detroit harper woods and all five grosse point communities. it's funny when i grew up in detroit when people say you are from detroit -- [inaudible] i said no i mostly stayed in the city. because the radical segregation of the city and i grew up in the

70s. i was born in 58 so in the end 70's when coleman young came into power and wind kim cockrell range is one of the supreme legal minds of america. my late great friend johnny cochran was a bad man but kenneth cockrell was a rhetorical genius. i was looking at tbs and i'm going to learn to talk like that and listen to my pastor frederick george sampson as well. coleman young burton johnson state senator young and senator johnson are exemplary service and i want to ask them. some of our get 50% of african-american voters in michigan have lost their ability to elect members to let leaders of their choice decide appointments. we have often heard bad and often talked about it and we heard it here today.

senator young serves on the state senate committee and local government elections. i will ask you to discuss how the state's emergency management was in the appointment of the emergency manager may e. forms of disenfranchisement by potentially depriving the citizens of inner cities across the state of their right to be represented by their duly elected officials. i want to ask senator young dad and i want to ask senator johnson as well. we will have an answer in turn with their three minute speech senators young and johnson. >> the great michael eric dyson what a wonderful job you are doing. it's such an honor to be here with you and the reverend wendell anthony let me say it's an honor and privilege to share the stage with you. hello detroit. how are you all doing? let me first just say this. a great one -- great man once said law should not rest on the

simple will of the majority but be eternal foundation of righteousness. the law is not righteous. the ian law is illegal. the ian law must be repealed. let me just say the people in lansing think they have got you beat. they are sitting up there rubbing their hands together. they are sitting there licking their chops but they don't know who we are. they don't know what detroit is. they don't know detroit is the home of rosa parks the woman who sat -- the city of detroit is the place where dr. martin luther king first gave his eye have a dream speech. the city of detroit is the place where the first radio broadcast the first row was built. we put the world on wheels. we made a soundtrack or a generation motown right here in the city. this is the city of detroit where the 5-dollar work -- took

place were we led slaves off the south in the plantations to the north to their liberation right here in the city of detroit. after all that you think we are going to be beat by some governor? you think we are going to be beat by a man who thinks we are and lazy clerics now, of of the people of the city of detroit are not and lazy. they are overworked and underpaid. they are unemployed and maybe if we started putting two people to work in the city detroit we would have economic revitalization. let me just say this in conclusion. let me just say this in conclusion. a man who does write for his time does write for all time. a great man said that. this is our moment detroit.

right here it will be said that a group of men and women with stouthearted minus two at the passion of their principles and the courage of their convictions stood up against the dictators named kevyn orr and a dictator named snyder and he thought he had us beat. we overthrew the status quo. we went out there and so today we will have -- we will raise the premium and liberty will be held for all of the city of detroit. just because you default on the city doesn't mean you are going to default on all democracy. i just wanted to say i love you and i appreciate you. thank you detroit and thank you for your time. [applause] >> somewhere i hear the emf eight-mile road.

that's right. that's right. [inaudible] >> i stand corrected. >> vets are right. we are engaging in a rhetorical maneuver of syndication. i didn't want to be explicit about it but you brought me out there. i didn't want to call the man criminal but -- that was beautiful. we are going to ask senator johnson to weigh in. >> good evening everybody. it's good to see you all and thank you dr. dyson for the work you are during here tonight. let me also thank a giant in our community whose impact will be felt far long after he has served his days congressman john conyers and thank you reverend anthony for having us here tonight. [applause] it's good to see this room packed with individuals and i'm

not going to repeat anything that has already been said but i want to put some color on this for you. for 30 months i've had a front row seat to what has become the nation's number one showdown city and state with respect to take over.eater and sewage depat education system libraries and 36th district court. we need to be very clear about what right to work was. it wasn't just about the youth. it was not just about the unions. right to work was also about getting rid of and obliterating the last, the nation's first foremost politically led black driven labor led city in the country. [applause] and there are people today, there are people today that don't understand all that is at stake. we are right now in the midst of an election cycle for the city's leadership. we can't deal with the state until we get to next year. i'm not going to pick on this

guy but we have to tell the truth if we are ever going to get away from this. the same people who presented the failed mayoral leadership in the past couple of cycles are now presenting you with their very own asian for you to put in charge of the city of detroit so they can continue doing what it is that they started. i'm not saying mike judges a bad guy but if he becomes the mayor the city of detroit he will represent a whole lot of bad guys. what we have to be very clear about his reestablishing the kind of conversation that moved detroit from where she is today into a better tomorrow. 40% of our states dollars come from the federal government. the relationship that will be built between city councilmembers the mayor of the city of detroit and then the congressional black caucus and those that support detroit is an important relationship. the wall have been weakened in this governor's leadership.

if your senior they said you don't get that earned income tax credit and you don't get the child credit. you don't get certain home credits anymore. if i take away your ability to function financially in the city then i will weekend there for your political authority and you will struggle to figure out who it is that can represent you. the bankruptcy is but one piece of this puzzle. the courts and those lawyers and their labor friends who are fighting on her behalf are going to settle that conversation. but you my friend's, you my friends that has been said that the most important political leadership in the united states of america is not better -- you all have to continue to raise the discussion in the right corridors so this will come full circle. [applause]

[applause] >> the powerful. all of these ministers of peer, it's amazing. let's now turn to mike steinberg brother steinberg is the legal director of the american civil liberties union of michigan aclu and also one of the lead -- [applause] lead aclu attorneys on landmark litigation filed on behalf of detroit residents against morgan stanley for its role in the predatory lending practices. [applause] that played a major role in the city's foreclosure crisis and the disparate impact those practices have had on people of color. just when you hear that i don't want to pontificate as

congressman conyers said but i have got to say this. this is what we say to president obama. if the specific effects of unemployment depopulation outmigration and manufacturing service because of the industrialization has targeted by people you have to target black people to help them out as american citizens, then not as blacks citizens. [applause] just something i wanted to say to him. we want brothers feinberg to explain the role of discriminatory lending practices because the greatest amount of black wealth in the history of this country the discriminatory lending practices and predatory that had a dispropordispropor tionate effect on us as well.

russ warren to explain the impact the bankruptcy has had on civil rights cases where the city official -- defiling of the bankruptcy case has caused all of these cases to be put on hold even when the primary purpose is to win a court order striding -- striking down an unconstitutional practice as opposed to winning damages so you see the extraordinary impact that this decision has had so we want him to weigh in on that arrest. whether steinberg. >> good afternoon. it's an honor to be here with all these inspiring wonderful people. i only have three minutes so i've think i will stick with the predatory lending questions. in the blame game around the bankruptcy there have been fingers pointed at many entities fingers pointed at politicians

at union's, residents of detroit but seldom do you hear the media talking about wall street's role in the financial crisis of troy. i need to tell you it did play a role in the bankruptcy filing. [applause] the aclu with the national consumer law center and other coalition partners filed the case last year a class-action against morgan stanley for its role in the foreclosure crisis. the same practices engaged in reverse redlining and targeted disproportionately the african-american residents of detroit. they did this because of the insatiable appetite on wall street for mortgage-backed

securities that were high-yield because they bundled up the very risky toxic loans and sold them on the market. morgan stanley and wall street banks made billions upon billions upon billions of dollars off of this and as a result the people of detroit and other people in similar communities across the country suffered terribly. the loans being made available to the residents of detroit were not the same loans on the other side of eight-mile. there and just rates were much higher. the adjustable-rate mortgages, balloon payments, the lenders did not tell individuals that taxes were not included in the monthly payment and they focused on individuals and communities that traditionally were not

eligible or were not given loans. it was reverse redlining and you know these loans were designed to fail. they were toxic loans and it's no surprise that within years after engaging and entering into these agreements there was a huge foreclosure crisis in this city. over 100,000 buildings were foreclosed upon in the city where there is a little more than 700,000 people and is professor dyson said, this undermined and destroyed the wealth in the city. a lot of the wealth within the community was focused on the home. these are homes that were in families for years and years and when people lose their home they lose their wealth. people of color lost more wealth by a factor of 10 than

caucasians during the foreclosure crisis. i am here to say the judge in our case actually came out and said there is a connection between the predatory lending of banks like morgan stanley and the bankruptcy filings in the case. thank you. [applause] >> reverse redlining. that is the hookup. a university professor has argued in some cases not a business, not persistent lingering malignant discrimination potentially targeting that's problematic. it's a way that white brothers and sisters poke each other up

that excludes, that excludes opportunity. you don't have to be a bigot or a racist. i ain't going to do nothing to you. you don't want to hate no buddy. you just love yours to the extraordinary degree. when you have the mistaken economic policy in your pocket clinical representation at your but have that combination is pretty great. it's pretty horrible if you were on the other. [applause] we have two more participants home run hitters here. ..

and we want her to talk about the effect of pension cuts on a very critical segment of our population, the police. thank you so much. [applause] >> thank you very kindly. good evening, ladies and gentlemen. thank you for being here. one again, i'm brenda, a retired deputy chief. but i'm a police officer. i did it thirty years. i worked the streets, i walked the beat, and i'm proud to be that. and everything we worked for for many years disappearing before us. a couple of thicks give a

different perspective. i think i'm probably the only police officer on the panel here. but the retired detroit association believes there should be no cuts to pensions or health care. we believe this there are other avenues and revenues to be had. i want to say it again. other avenues and revenues to be had. this is story i want to talk about. we firmly believe what we earned through blood, sweat, and tears through twenty five years or more shouldn't be reduced or it impaired. our pensions are constitutionally protected. the detroit police officers have been shot at. i know, i have. we have been shot, we have been injury, we have been killed, we have been maimed and demeaned in every possible way. there's no social security benefits for us at the end of the day. we depend on our pension and our

health care to see us through. we have truly all eyes are on detroit. what happened here's in detroit can will happen across the country. consider how devastating that would be. the painful choices that many of us will have to make. how do i pay for this coverage and more importantly what do i cut in order to be able to do that? many knew nice palty will be look for quick fix to the phenomena and pension seem to be the bull eye for many communities including here in detroit. i want to say congress, local pop tickses, economists and leadership be mindful of the devastating effect pension and health care cuts will have on

the economy. i don't think we talk enough about it. i'm a licensed realtor as well in the state of michigan. i've already had people come to me talk about foreclosure and short sale concerned about losing their home. the vast majority of retirees are the middle class. baby boomers, the president has stated from the beginning and throughout that hef concerned about preserving the middle class. pension and health care cuts will road the middle class. there will be -- [applause] thank you. there will be an increase of foreclosures. which will further erode fragile communities that are struggling to survive. and revitalize. cities will begin to lose revenue through property taxes as people lose their homes and move to other communities or states. retirees who will consider

buying -- reconsider buying new homes, cabs, -- cars. i won't say the rest. i'm getting cut off here. i want to leave this with you. we have earned the right our pensions. no one is giving up anything and no one should be taking nick from us. we are here today as a collective voice to have a loud and clear voice to mr. or, the court, and the nation that a cut to any retiree's pension benefits is unacceptable and we will continue to fight -- [applause] fight and fight some more to ensure our pensions are exact. thank you. >> thank you. [cheering and applause] >> well, we have heard from the extremely articulate and handsome man and the fine and formidable women. one of the finest and the formidable jewel ann. [cheering and applause] >> before we have --

an economist, and author and president of bennett college for women. she studies economic strategy indication of the american pop legislation. she studied the economic status of more than people in particular. got a ph.d. from m.i.t. at 26. >> come on now. >> she's a bad woman. >> no! [applause] we want her to tie it up for us and talk about the implication of the potential detroit bankruptcy. reverend dr.. >> thank you. i will thank brother anthony. and sister monica. she's here and extend that to her. ant any one of the few people

when he ask a woman to come to speak or let you sit -- >> most other people make you sit in the back and bring you up. they think it's pomp and circumstance but it's just inequality. i appreciate my brother. it's great to be in your house. and of course, my brother john conyers. i'm going tell you who understands economics. that's john connier. >> that's right! >> i don't know when he introduced hr40 to simply study the impact of slavery and african-american people, to simply study all the people who have no sen said after ref ration bill. when he said the study is the tragedy of that, michael, only 22 members of the congressional black caucus signed that legislation. which means that everybody -- come on now. one night essentially apply to

the situation with the mrnl manager. i'm not going to be go there i'm not from detroit. i've been to detroit a number of time. it's a city i love for many reasons. a brother can come here or a sister with a trent grade education and make cig fur -- six figure. you continue see it. you have the highest ownership among black people in the city of detroit. now what you have literally the e viz ration of a black middle class had which is being followed all over the country. that's not a city majority african-american or even 50% african-american that have not been subject to some assault. >> that's right. >>let talk about the -- [inaudible] there's a parallel. the orally impaired a essential physical crisis. and the first response of that crisis of take over. so that new orleanss have a

bunch of charter schools. few public schools, the committee decided they did not want transportation. in fact there was a man who quoted in the "the wall street journal" saying question restructure our city economically, politically and demographically. that's when he said. now the crisis in detroit is not a crisis. t a manufactured crisis. that's right. first you destroy it and take over. then you decide you want it. the run down thing you did not want before. when you essentially suspend political democracy you also suspend economic democracy which means that the city council cannot follow the money. because if you can follow the money, there is no need for bankruptcy. t a choice. let just look at this.

the big three here between $35 and $45 billion for the united to bail them out. they were too big to fail. why can't the city -- outcome i get excited that i get e phonic. how come the city that houses them not too big to fail? [cheering and applause] that's right! [cheering and applause] detroit owned $18 billion. it's a fraction of what the big three owe. and so if anything ought to happen, those big three should be pressured to fight for detroit justice like the detroit, quite frankly, fought for them. [cheering and applause] that's right! that's right!

that's right! [cheering and applause] the most important thick about this is what we see several people on the panel have talked about well and the wealth that was especially with the housing crisis. you have seen a lot -- loss of black well all over the country not only because of housing and high unemployment, attack on pension. all the thins are happening here. add to this the bankruptcy, so-called. i call it the exappropriation race of resources. >> that's right. >> what you have is a major shift in ownership. you have a resource challenge. if they want to sell the water company, which is worth money. if they want to deal with a museum which is worth money. parenthetically it's interesting some folks didn't get in to this until the pa papa paintings were being threatened.

[cheering and applause] this is just a simple wealth tran for. because a governor and mr. or, i don't know the brother. i don't know why he would spend $100 million trying to figure out what to do with detroit. i'm sure we can figure it out. the fact it's not clear that every resource has been used to prevent a bankruptcy. this is an optional bankruptcy that someone is imposing. because, a we have no urban policy. b. the tea party wants to take over, quite frankly. [cheering and applause] [cheering and applause] >> that's it! that's it! you let it speak, girl. >> i told you i was going preach. >> see most importantly what has happened here we have not fought

hard enough. >> that's right! we have not fought hard enough. [applause] >> that's right! [cheering and applause] >> and to put it in an democratic context in the short run those who have bankruptcy may get some behalf they want. in the long run the american people will be hurt by the fact detroit is going to be attacked. several people dealing with the pension issue. that's not just detroit money. these are -- these people are traveling and industry that is coming back. this effects all of the american people. these people want to turn detroit in to disney land. downtown is a big contrast what is downtown and what is in the city. if they have disney land, you have to pay a toll to go to disney land. i suggest there be a large imposed on those who want to play in disney land as opposed

to the people who are trying to live, work, and struggle. dealing with drip detroit's bankruptcy will be a drain on the national gdp. dreams with the dispersion of our people and deals with an erosion of our political power. you see detroit is a political epicenter. of michigan. t a political epicenter. when you have concentrations of people you can elect people. when you have it here, there, and wherever. the critical ma is gone. that's economic as well. when you erode what happens in detroit, in term of sending senators, the lansing and congress people to washington, d.c., that erodes what brother conyers can do here and the congressional black caucus. just to know with the power of cbc is. they wrote the president a letter saying question slow our ?roal. >> yes!

he's going spend $140 million with air strikes. drones in the air means boots on the ground essentially. there is too much people spending money. we can afford, first of all, to have a recovery. this is premature. if we cannot come with a recovery plan, then, fine, take the next step. what this is hosh belie premature. the people of detroit must fight. do you also also fight it with a passion it deserves. thank you. [cheering and applause] woo hoo! [cheering and applause] [cheering and applause] >> doctor did know know she was going on the panel. that's how cool she is. that's improvization at the

height. and you know what? i learned something every time i hear her. i learned something today. i didn't know i preached with dr. anthony several time. and i've always sat in the back. after i shined his shoes he told me i would have to press the roll and come free. thank you for liberating me. and i'm insisting on equal treatment in the future. look, there are two microphones that are here. we want to hear from you. we want to tell the audience at home as well. before we have the live question for more information and background material check out our website, www.democrat.judiciary.house.go. without democrat.judiciary.house.gov. and for the latest news, the

forum on the legal implication of detroit's bankruptcy filing will be found there. we want to hear your voice adds well. if you have a question for congressman conyerss or leave a comment feel free to post on his facebook. www.facebook.com/congressman coy www.facebook.com/congressmancony cony www.facebook.com/congressmancony con i www.facebook.com/congressmanconi cony www.facebook.com/congressmancony ers. >> or tweet him. he's a hip man. he's that kind of guy. let go to the microphone. if you have question to ask of our panel, please come. i know, many of you have passion and --

so we can get response from the panel which ask to be equally brief we'll be able to get through as many people as possible. all right. >> my name is jerry. i'm an antiforeclosure attorney in detroit. i worked with the moratorium coalition. i want to echo what many of the speakers have said. while we have been under the gun in detroit. for many years because of detroit's leading role on the black liberation of working class struggles, the immediate direction of our neighborhood that we experience since the mid 2000 was that the direct result of the -- [inaudible] racist -- [inaudible] of the bank city government itself and the predatory loan with interest rates and absorb

an instrument. make no mistake the emergency manager act and the bankruptcy i.t. is geared to ensure that the banks get paid at the expense of the people. look the the list of the creditors the banks are considered secured creditor while the pension is unsecured creditor. we say we don't know -- [inaudible] [inaudible] international tribunal trcial assembly against the bank in

detroit. for the banking all over the world join us for the international assembly. let fight the bank. let fight -- [inaudible] we don't owe them a dime. >> good evening. [laughter] >> i miss detroit so much. all right. >> thank you. thank you, brother glover. >> good afternoon. >> yes, ma'am. >> i'm coibl member brenda johnson. i want to thank you congressman john conyers and the entire panel for enlightening all of the audience. my question is to you, congressman john conyers, and that question is have you had an

opportunity to discuss what is going on in the city of detroit with erick holder, and/or with the president of the united states? [applause] >> thank you, ma'am. >> i have been able to mention this to the president, but it wa house with thirty or more other members of congress. i have no guarantee that it soaked in. when i go back to washington on monday, i'm going raise this directly with him again. i'm also going to raise it with either of the democratic caucus in the house of representatives nancy pelosi. we want all of the democrats supporting our issue. [applause] >> all right. nowlet --

since we've had a limit on our panel can we have a limit on the questions. let's take minute or less. so we can get a minute or less response and move to the next so everybody can get involved. is that acceptable? >> thank you. >> next question. over here. back and forth. >> hello. [inaudible] my thing is about education, economic, and politics. we want to correct everything. you -- pathological science, history, that does not honor the ancient egyptians and the ethnicity. -- [inaudible] economic is going to start -- bridging chose to the ground level. up. with you go to new jersey you go to gas station. there's regulation going to come out.

and automatic -- and their gas is ten cents cheaper. how can they do that? why can't we do that. we know that. we can push for it. [inaudible] >> all right. >> [inaudible] now politics is the thing is thank you for the it. what is your question, my brother. give me a question. what is your question. >> i wanted to -- [inaudible] >> that's very good. all right. very powerful. thank you. >> over here. one minute. >> good afternoon, conyers and all member of the panel. my name is con stance philip. i retired recently from the city. the mayor made a prompts if we retired take advantage of the package but he didn't follow through. my question is -- >> hold your microphone. >> hold the microphone. >> hold the mic up further.

can everybody hear me now? constance philips. repeat retiree from city government. the plan was to encourage us older workers to retire so younger employee could take advantage of government jobs. that was not a real promise. i want to know what is going to be our promise process to get the collectible. mr. garrett, you gave several figures earlier. i tallied up the number. that was $1.47 billion you talked about. we need money from people who owe us. we need a collection process. what will it be? [applause] thank you. you want to respond briefly? >> there is a consent at large you can correct me. the gentleman attorney. looking at impossible effort in terms of us going and trying to

-- on the attorney general for failing for the city to collect their taxes. we're exploring that. that's one option. the other thing we have done. it's also in the litigation in this bankruptcy is in is challenge to the city being insole vent. -- part of the argument there's ref new they collect. that's one of the -- eligibility issues. so number one, we have the far blown idea there is a number of way with can get the attorney general in and fundamentally in the bankruptcy process we're challenging the question of city being insole vent. >> thank you. it. >> next question. >> dick connelly. i'm here in from chicago because -- [applause] you're right chicago is an hour behind detroit. they're going steal their pension including my brothers who is the city --

[inaudible] retired. and the only alternative is to bankrupt wall street by passing the glass stegall bill -- [inaudible] my question concerns honorable senator conyers, and the pastor here. we have a pamphlet here that i would like to get out to everybody. i would like per emission to get out to show how detroit can one again become the workplace, the manufacturers for the whole nation. i ask permission to pass it out. you know, i was -- >> thank you, sir. we appreciate it. thank you. congressman conyers want to respond. thank you. >> can i point out, sir. we want to renew the glass stegall act. i'm a cosponsor of it. but i do not need --

[inaudible] to explain to me what i should do what i'm already doing. [applause] [inaudible] >> wanted to respond briefly. >> i want to make a quick remarking about glass stegall and inform forms that president obama has indicated he would like to larry summers to lead the federal reserve bank. rear summers is the person who me sidedover the repeal of glass stegall. it caused financial hoopla we experienced. people should be writing our phot suggest there are better candidates than larry summer to lead it. thank you for that. yes, sir. i'm sorry.

i'm sorry a licensed real or it working in the city of detroit. i would like to ask sin there's a 56d million of the $100 million settlement that banks had to pay through the row bow signing case that. [inaudible]

away from just the area of downtown, the fda a and midtown? >> thank you. great question. >> i want to thank my brother who already knows the answer to the question. he used to work for the congressman. the question is right on the money. the money have not been spent as they were intended for as the federal government needs to not just monitor an effectivenesses happening in planning and development. of it not the only the city council. they need to -- the money is -- [inaudible] have been taken away and

identify to be use as the department to dpdz what they want to go based on their own agenda. you do what you. the the federal government need to come in here and oversee these federal dollars. you, absolutely right. the money is supposed to be spent to hire people in the city and contact the people in the city. too oversight this and stop this illegal pushing off of money. i have two lawyers from the judiciary committee of the house of representatives that have just told me they're going to take this up on monday.

[cheering and applause] [cheering and applause] we will work on this. >> let me say this. it's not just an issue for congressman con years. for a for the michigan delegation. they have, taking federal dollars and they have been using the money plug the hole in their own. >> that's right! and monies targeted for detroit. ie like demolition. every house does not have to be busted up. that's the way of guaranteeing jobs and putting in training. that's the way of determining and restricting the dollars that come not to the state but they should come directly to the

city. and should be restricted, congressman, so that the emergency manager but the local officials direct how those monieses should be used with any context of developing the city. that's an alternative for some of the thing going on right now. [inaudible] people who promote states right on the one hand don't want to talk about the redistribution of those funds within the local government. >> know question. >> thank you for the responseses. brother gene, you could become a late-night dj too with your voice as well. over here. >> i'm a proud retired city worker and northeast detroit -- [inaudible] i have a specific question to

ask on june 27th emergency manager put on the website and announcement. it wasn't an order. it's unconstitutional he put an announcement he was going pull the meters with the public lightening department which serve 115 customers and pollute in the private utility meters of dte. and by doing that emasculate our public lightening department it will be gone. that's illegal it prohibits article seven section 25. the selling or transfer of -- that's the language is repeated in section 12 of the emergency manager loss photograph ff 4-rbg and said you cannot sell. it's the law or -- in the prohibit him in to what he's going to do. i want to know from the panel here what can citizens do to

stop this? i filed in the bankruptcy court an on jerks on this. that's the only venue we have now. what el with can do to stop the illegal, unconstitutional action by the mrnl manager which has a pattern in the last four years of completely ignoring the law. >> thank you, sir. thank you my good trend is a long standing. the first unconstitutional the fact there's an emergency manager. if you are going to deal with unconstitutionality you have to start with the fact that -- because the $2.3 million st. repealed mj manager. of it illegal to come back with basically the same loss.

it not exist. it's unconstitutional appointee, why not go back to the beginning? all is illegal. all is unconstitutional. you have to fight all of it. not a piece of it. this is happening right now. bankruptcy which will be stopped. part of the hearing will determine what is legal and what is not and what can go forward

and what cannot go forward. i suggest to you, russ, that there is a lighten authority good bad or indifferent and the department of public lightening from my understanding is being shifted the weight and responsibility to the lightening authority. the emergency management, does not, according to my information does not have the authority over the parking, i mean, the lighting authority. he is articulating a lot of things they have not blessed. there is breech right now relative to who has the authority. and they come online is going offline or to the degree that is going to come under authority. i would suggest you talk to jones and the members --

based point understanding responsibility for dealing with the lightening situation. -- the street lightening authority only get the -- they don't get the customer. ultimately stopped in court. that's one part that's not whole thing. it cannot be wiped out. people haven't voted. who need to address it? the people. the people. a general point that may address this question and maybe some other. it's a knew nice pal case.

i think none of you want the federal bankruptcy judge supporting local officials as to how to conduct their affairs. so federal bankruptcy court don't have the power to tell people what to do in that capacity. what has to be done then is ask has to be made to list what called the automatic cay of the injunction sort of put everything in one forrule. so you to ask for realities so that release can be sought in another forum. that's the procedure that generally has to be thought.

it's basically try going away from the grid of the city of detroit and shifting over to dec. [inaudible] you can't about the snow on the neighbor's pornl -- porch when yours isn't clean. you can't throw stones in a glass house. i want to say that. i think that's what you do first. the first thing we need to do is

organize, mobilize, and destroy the people. and get them out. >> thank you. we have about ten minutes left for questionses.

filing was unconstitutional as you have defined. and what you must be aware of and the audience must be aware of which the court makes the decision on the issues, they will be taking the pulse of the community. and to decade it has been too silent in the streets. this is not going to be won in the courtroom. it's going won in the streets. [cheering and applause] so that is i think we would be greatly remiss if we did not hear from the learning panel what the call to action is as it relates to taking the fight to the street.

if the panel is prepared not to give us the directive tonight i suggest the panel reconvene expeanut dishly and come back -- [inaudible] >> let me just say, if i can, reverend. that's a -- [inaudible] he's the attorney who argues that the font size issue was respect to be put to the people so we would have an opportunity to vote on the rerepeal. she's been you know what the answer is. every time there's a court hearing there should be at least this many people waiting to get in the courtroom. every time an organization like

the national action networking tells people to show up, so they can lodge their objection to the bankruptcy? should be standing room only there. we people keep saying. people come upping up to us and asking us what we are going do. i keep saying there's a you in us. i'm ghoingt to get a pension after thirty years. i have a smalling. i cannot fight by myself for your pensions. you need to make sure that every time you come to a forum like this. you're going knock our your neighbor's door and tell your neighbor to get dressed. i have a table full of people sitting here. they are invested in this fight. you need to do your work and make sure you recruit people to come here.

if i may, there are several court hearings scheduled. they have a website called stand with detroit. you can go to that. it will tell you the event. where you can demonstrate when the court hearing is. what they were talking about mobilization of people. we will give you the location, we will give you the event, we will provide lawyers in case you are arrested.

he already knows many much us been out in the street on this issue. they have all been engaged in this. there are plenty to get engaged in the level. for the purpose of c-span and the panel tonight, again we commend congressman conyers. the porn of information that through c-span as they broadcast

it. let's give c-span a hand for coming here you can contact the offices and the naacp office and contact the office. bottom line is this. it's enough hell bushing around in detroit for everyone to get their own individual bucket. if you want to marjorie dannenfelser. if you want to make phone calls, plenty of phone call for you to make. if you want to help volunteer

thank you for coming. [applause] one other informational website. without.com rdpma.org. we pose a lot of lot of things on the website. we have links to the bankruptcy court. and i'll add some other links of what has been mentioned here. rdpma dpoirg. if police officers across country, people you know to come to the website. that's it. >> thank you. >> who was extraordinary

everybody ought to know. stop patronizing -- you know control by white wing people. based on what they think they're going to be doing. we need to be in charge of our own industry and anding and controlling.

don't let somebody else buy off the land. we need to be empowered and recognize we are two larger majority in the city. not to own and control wealth and the industries we keep alive. >> hold up. >> you taunt the wide view -- there are corporate entities here in drought that do support this bankruptcy.

[inaudible] i'm afraid we're going to have to end. i know, i'm just saying. you have energy, you have passion. you have more to see.

they have to reorganization, reconvene in your local community and keep the fight going. inappropriate imaging of black people. one forum in detroit will not exhaust all the intelligence you possess. it's a good thing that -- don't threat end. the program will end. but not the progress. and the movement. hold on. joe will be next week the former head of the naacp. slow down, now. will be here next week and september -- wait minute. i'm going to let the people speak. the people have to let my man talk. that's me. hold on. i want to be respectful of you.

sinned that. so you to understand there are other peoples going to and they can't stay here all night. it's not they are disrespectful. who wants to go goes. reverend anthony can he stay? >> no. after the program is over? they can come to church tomorrow. [laughter] let me say this. >> hold on. >> and to my brother and everybody this was scheduled from 3:00 until 5:00. we knew we were not going to be able to hear from everybody. c-span are not going to be here all night. you can follow up with the questions and concerns brother online. they gave you the web page you can deal with. there's going to be another town hall on september 16th.

sirius xm is coming in. you invited to come to that. that's going to be the african-american history. some of us going to get up and going church in the morning. we ain't going do this all night. thank you for coming. brother, we are glad you came all the the way here. from whatever city you came to be here. thank you john conyers for the leadership and the dr. julian and everybody being here. we thank you, brother mike. >> thank you! [inaudible] monday, september 16, wright museum. all right. joe madison, town hall. these issues will be taken up. we thank you very much. let give a round of applause to the extraordinary panelists and thank the reverend for opening the door of the church. [cheering and applause]

on the next washington journal the proposed military strike on syria. we'll hear from california economic representative barbara lee. she'll discuss legislation she's proposing to pursue diplomatic efforts. then new jersey republican

representative christopher smith on his bill proposing a syrian war crime tribunal and the national clan clandestine service with former deputy director. "washington journal" live at 7:00 a.m. eastern on c-span. secretary of state will be on capitol hill tuesday. i can remember the day it happened. my father was a minister. we had gone up to the church. my mother was the choir master. so we had gone to the church to get ready for service. all of a sudden, there was a loud thud, and we knew a bomb

had gone off. you knew it. we thought maybe in our community. and then a little while miss lawrence rice came in. she was my father's cousin and said 16th street church had been bombed. a little while later we knew the name of the little girls who were killed. and denise who was one of the little girls who was a family friend a kindergarten friend. there was a picture of her in the book giving her the graduation dip ma from kindergarten. it was a sad ander iser terrifying day for our community. a 50th anniversary commemoration of the 16th street baptist church bombing. live sunday at 11:00 a.m. eastern and throughout the day. on american history tv on c-span three. according to the latest monthly

jobs report unemployment dropped to 7.3%. according to experts was largely due to people stopped looking for work. next nobel prize winning economist peter diamond. he talks about the causes of high unemployment and a debate between economists dean baker and kevin. this is about ninety minutes. [inaudible conversations] >> welcome to aei. i'm an economist here. we are have to get started. it's being carried live on c-span. welcome the topic of the panel today is structure unemployment. in the after math of the great recession unemployment remained high. it lead economists to question the unemployment of. workers don't have the skills

employers employers are looking for? a number of economists produced excellent study to answer the question and the consensus while both type of unemployment are effecting the labor market. the primary cause is the shortfall of demand. having said that, the employment report has made people question there are structure problems at the u.s. labor market. flex, we learned on friday the labor force participation rate for august was the lowest in several decades. we learned over the summer like a standing improvement in the labor market was a illusion. every since the recovery officially began the share of the population employed has improved very little so while the unemployment rate has been dropping. the employment rate has been roughly flat, which suggests that the drop of the unemployment rate is driven by people leaving the labor force and not getting jobs. long-term unemployment has remained a historic high both in term of absence numbers and in

term of share of total unemployment. the share of national north carolina going labor has been dropping. and jobs disappeared during the profession. so you are left to wonder whether there is something else going on other than a textbook drop. a tool that exists frequently use to study is the curve. to help us think about structure unemployment and the beverage curve we are delighted at aei and honored to have one of the most imminent and respected economists in the world here today. peter diamond is institute professor of massachusetts institute of technology. the author of many books and papers. the past president of the american economic association, for his groundbreaking work on the analysis of markets with search frictions, hef awarded

nobel prize in economics in 2010, and we're delighted to have you here today, professor die monday. to discuss his work we have two prominent economists and public intent yule. dean baker is here in washington. dr. baker has consulted for many prominent policy making organizations and often several books. are and then dr. baker will discuss then we'll have some questions from the audience. thank you for those kind words. i appreciate them. and if my son is watching now, he appreciates them too. the issue of unemployment is, in

my mind, a crisis in this country. t a crisis in lost gdp. it's a crisis in what is happening to workers. it's a crisis for young people who are not building up the human capital that normally leads to much higher earnings by the time they're in the 30s. and of course it's a crisis particularly to the long-term unemployed who have so much trouble coming back from the position. even if they worked hard tat. i want talk about not why -- i think that's pretty obvious. but how to think about the role of aggregate demand and the need more. without disputing there are other things going on. ..

and then they have a chance of doing it. the loose labor market. so let's start with the beveridge curve. this shows us the unemployment rate and the vacancy rate month by month. tls puts this out each month in the different colors referred first to earlier business cycles

and then the green is as we went into the recession the economy was declining. obviously vacancies were falling and unemployment was rising. and then we hit the bottom at the recession and the recovery started. what seems like the slightly odd thing happened the vacancy rate went up with unemployment not touching and then unemployment dropped for a bit without vacancies. changing and then we followed this pattern where the path back is consistently above the path down. so calm cut that is the picture we have had and that has led some people to raise the question is the curve back above the surf in the recession because of a mismatch in the labor market, because the

workers have the wrong skills or the wrong locations or are there other things going on as you study in detail the relationship between unemployment and vacancies which make this pattern not a basis for reaching that conclusion like that. so, just to put this in the context of the discussion here is a statement. it's an older one but the pattern i showed you is in place already. coming from the st. louis federal reserve bank, and there are two parts of this that i want to play for you. one part is staying if, and that is why i bolded it, if this pattern is coming from more difficulty in matching jobs with workers, then as the statement

goes it's not immediately clear how monetary or fiscal policies might alleviate the problem. so they are two things i want to do. the first is to explore what kind of logic will help us interpret why the pattern is doing what it's doing and the second i want to make as you think back on that figure is even if we are on that new trajectory with higher unemployment for each vacancy, is it still the case that we need more aggregate demand because we are still with much higher unemployment than the employment point even with a higher mismatch. my first is the conclusion isn't right under that picture if you analyze what might be the target bullet point.

that's the thing you worry about. you are way above it and unemployment so there's a need for continuing stimulus some mixed pattern of monetary and fiscal policies. the second thing, the real purpose of this talk, is to focus on how do we look at things likes here is another quote. idly enough by chance it's one of the panelists here and he says first economies tend to move up and down a relatively stable beveridge curve over the business cycle and secondly he raises the same question that a shift in the beveridge curve suggests that we may never get back to that low unemployment rate. so first let me take a look at stability.

there is a history of the beveridge curve going back to the 60s and oddly enough the word stable doesn't really calm at me. this is not a tight technical relationship the way the aggregate production function during full employment connects and puts an output. this is a curve that moves all over the place in part for reasons we can identify and part not. secondly, if you look at turning points like the one i showed you in that first slide, the path back being above it has happened a number of times before and sometimes after that, you stay above. sometimes after that when you get back towards full employment you are back to the old curved or even below it. so the issue of making about --

thinking about how to interpret the pattern we are seeing is something that really calls for digging underneath these aggregates and what i want to talk about is that problem. here is where i suspect we may be losing some of that audience. i am not aware that we would be aiming at people outside of this room. the beveridge curve is a relationship between unemployment and vacancies and the usual simple model we are starting to think about is to say the employed relationship. workers quit and workers get laid off and for those of you who like looking at equations as the separation rate that moves peofrple from employment into

unemployment and the second thing that happens with a matching function is people get hired and a number of people who get hired depends on the number of unemployed and the number of vacancies. and historically if you fit the data and look at hiring there is a pattern there. it's a strong pattern. it's not a tight pattern. the point i want to make is this simple picture is sent a tight technical pattern because the animal planet rate and the vacancy rate are really proxy variables for a lot more complicated set of things that are going on in the economy that are much harder to think about than the simple model. the simple models help identify issues but by itself it's not enough. so let me sift through a number of the reasons why this is a more complex proxy.

the first element is that firms don't just hire the unemployed. firms hire people who are not in labor force who have dropped out or who were new entrants and you are interviewed from month to month and one month you said i'm not looking for a job so i don't count as unemployed, i count is not in the labor force if i don't have one in the next month you are employed. it doesn't mean in between they didn't do some looking but in terms of our month-to-month statistics it looks like that. there is a measurement problem if people get misclassified and there's a question and adequately. they don't remember oh yes i did do some looking last week. they blocked it out because it was unsuccessful. that doesn't have much of an effect on the measured unemployment rate because you get both kinds of errors.

but it has a big impact on the change from one month to the next. so i got up there what are called adjusted figures based upon research by a fur idea of economists on how to adjust to that and i'd i'm adjust it and what you see from that is the flow from not in the labor force into employment. in largest the flow from unemployment into employment in the flow out of employment is inside both of those. so that simple image they are unemployed, that they are unemployed, you find a job, you don't find a job, you lose a job leaves out this large pool of potential workers who are also responding to incentives. so that makes this a proxy and

to give you the sense of proxy what is called the youth six unemployment rate adds to the measured unemployed people who are not labor force who say they would like a job but they didn't look so they are not measured or employed or people working part-time to wish they could find a full-time job. and this then is a somewhat different measure. it gives the same story. you see that same basic picture of the recovery showing more unemployment relative to vacancies than the recession did and so, that is the sense in which we actually have a pretty good proxy. but now let's dig more deeply into the dynamics of what's going on. well, if the flow from unemployment to employment is a proxy for the ability to hire from both of those pools how did

these flows behave relative to each other over the business cycle? did they look different in the recession than the recovery then that might here reason why write now the beveridge curve is high and something that would go away as the labor market got tight and we go back to where we were before. so here is a chart showing the ratio of flows into employment on the one hand from those measured in the labor force and from the other those who are unemployed. what you can see is that swings a lot. it has a systematic pattern in recessions with the dark shaded areas and recoveries message number one you don't expect the recovery to be exactly back on the track of the recession. and measure number two this recession being deeper and

longer and connected to the banking crisis and the housing crisis looks somewhat different from before. the speed of her cover is slow and so that is making the pattern on the recovery different from the pattern in the recession. we would expect by more than happened before. and what about the other flow? where do people who leave their job or lose their jobs go? well, again the pattern is different. what we are seeing here is the flow out of the labor force plummeting. to begin with it had a lot of people who don't normally pass through unemployment that were losing their jobs. they had a strong attachment to work. they stayed unemployed and made the unemployment rate much higher and again the recession and the recovery were somewhat

different. this recession looks different from earlier. there is a study coming out of the federal reserve system saying well what if the pattern change what we think it look like and we can see unemployment is much much higher than it would have been if that pattern had not changed. the second element to look at in looking for structural unemployment is let's focus on the actual hiring that is going on. we can do that in two ways. given this simple model i showed you earlier, we can talk about the level of efficiency of the matching function in terms of the parameter a for those of you who love the questions as much as i do. and secondly we can look direct way, we can relate hiring to the number of unemployed vacancies

rather than looking at the change in unemployment relative to unemployment. so we have two different ways of measuring this efficiency pattern and they closely parallel each other where seeing again the relevance of that simple model from the fact that these are closely parallel but notice a couple of things. the vertical line was when the recession officially ended in the recovery officially started. the matching efficiency which is falling well before that, so if you say gee if that point when the beveridge curve shifts that the matching problems became serious. no, no, no, it started much earlier and actually has been getting worse is trying to connect the shift in the beveridge curve with what is happening in hiring, it really

doesn't work. the timing is off. what we really need to do is put together all of these pieces. this is research in progress. the research i'm doing at the boston federal reserve tank and all the pieces aren't there yet but kevin thought this was a good time to report on things as they are going. another element. a a lot of hiring happens from the already employed. you quit a job because you found another one order you understand the firm is in trouble and you might get laid off and you start looking for a job before that. and that flow is normally very large. and so the separation rate which means the people leaving employment includes those going to other jobs and going to unemployment to not in the labor

force. so let's take a look at that separation rate. that is one fraction of the employed one month are not employed the following month and it's again no stability in this. there is a clear pattern over the business cycle. what happens early in a recession a lot of layoffs. then the layoff picture stops and what happens after that is points are a big issue so we saw the separation rate plummet and not come back. what is driving that is the different behavior of quits and layoffs. so layoffs now look much like they did before the recession. the firms that were in trouble a lot of them have shut down and the layoffs aren't happening but the quit rate has been very slowly rising and the quit rate is a prime measure of the sense

workers have and the experience workers have about the labor market. quitting into another job is one way to go. quitting because you expect to find a better job is another. and this drop in quits which affects the separation rate and therefore the beveridge curve is another reason why the recession and the recovery may well be different and another reason why this recession could well look different from other recessions and up back in the same place. one last item of this very academic digging under the beveridge curve. this is terrific work done by david haberman and paul. they said we have vacancies all

across the economy, lots of different sectors. how long does it take to fill a vacancy? well it varies a lot in a number of different dimensions. so we would expect since the recession doesn't hit every part of the economy in exactly the same way the particular patterns that the recession is hitting the economy will affect the speed of hiring, will affect the speed of filling in the vacancy. so the first part of the table, that is by industry. so let's ask the question which industry fills its vacancies most quickly? >> answered, construction and i'm sure you are all aware construction is the industry that was the hardest hit by the recession. which industry fills its

vacancies most slowly? health and education. what is the industry that is held up best during the recession? health and education. we don't have month by month data by industry that i am aware of. so presumably this pattern is there and it says construction was particularly hard hit in this recession. it should be slow where recovering than typical previous recessions. and since we expect in time we will grow into the overbuilt housing and commercial construction in time for construction to move back and so when we are looking down the road is when we might hit a full employment point, this effect should disappear. what about the second one?

the second one looks at how long it takes to fill a vacancy by size of the firm. no surprise. small firms fill vacancies much more quickly than big firms. what happens in this recession is because of the banking crisis having a bigger hit on small firms the arles more from banks than on big firms which are capable of going directly to the capital market we have another reason for thinking. it's not as large an impact is the first one but again maybe what we are seeing is something that will be transitory, temporary, not reason to not be stimulating the economy. the third one is particularly striking. there are lots of firms come to think of fast food, with a lot of turnover and don't need a whole lot of training.

some training and so there isn't a big push by the firm to retain workers as much has happened in places where you have to invest much more than getting a worker going for you. so what we are seeing here is a huge tenfold difference in the speed of filling that the vacancy between high turnover firms and low turnover firms. you have already seen the data. quits plummeted. i haven't seen data can to connect but you have to think an awful lot of the quits related to high turnover jobs and high turnover firms. so this is another reason why the current recession combat, that the recovery is particularly looking like the labor market problem that might not really be there.

i guess this is kevin hassett began saying well come to let's look at the serious and upsetting fact that we have a huge increase in long-term unemployment and perhaps that is behind the apparent shift in the beveridge curve. so there is the underlying data. this chart is a bit out of date. it comes from the calculated risk web site. they haven't updated it but, and i love it so much, all those colors. this really is nice to look at. that red line that is so high in long-term unemployment and the other three are short duration unemployment. and the others are back roughly where they were before the

recession long-term unemployment is not. and work by dickens and pay up have looked at average curves separately by the unemployment and you see the picture. if you plot the vacancy rate against the short-term vacancy rates it doesn't look like a big shift. if you apply to the long-term unemployment rate and it does look like a shift. so what we know is that depth and length of a recession shows up in long-term unemployed and as you are recovering the short-term unemployed are finding jobs back at the normal rate. the long-term unemployed are not and we know long-term unemployed

always have difficult times getting back in the question is is this what is driving the picture of the beveridge curve or instead what is driving it is the fact that with a lot of unemployed curved agencies with a low-level of incentive for firms to do hiring out of the state of aggregate demand and the concerns about what is coming is that the long-term unemployed are particularly heard by the small amount of hiring that is happening rather than the long-term unemployed are causing the smaller mark -- amount of hiring that is happening. that is the picture and here is kevin. here is his answer to the question he posed citing a different study by the same person who sent out the sperry

is resume to see who would get called for an interview and no surprise the long-term unemployed are much less likely to get in for an interview. that is often referred in the literature as ranking so i firm gets multiple applications it's not going to spend the effort and resources to interview every single one. it's going to interview some of them, the ones that look most promising and we can ask the question what difference does it make to the functioning of the economy in a recovery if in fact we have that rather than say choose at random which is what we might think is closer to the story in a tight labor market and a small number of applications. oddly enough that question was asked by olivier blanchard at the imf and the co-author who

was with him at m.i.t. at the time. this is a sharp model where everyone can fill that job so it's really not an interview process but the question is who do you give it to? let's compare if you have three applications for third probability of each of them, that would be random hiring or let's say you always give it to the worker with the least unemployment who applies. and what happens in this case is that the long-term looks just like the long-term in both of these two cases. the short term look very different. the way they look different and this is where hiring is worthwhile is the impact on wages. wages don't fall as much with

ranking as they do with random hiring. the reason is the workers have more leverage when they know if they are unemployed or they get passed up on this job it's easy to find another job when you have ranking the short-term are doing better relative to the long-term unemployed so for a given hiring they know their prospects are so bad and the ability to attract them requires higher wages. those wages interned impact on the vacancies. this doesn't directly connect with kevin's statement but i start with great skepticism that the long-term unemployed are the reason the economy is doing this unfortunate pattern in the beveridge curve.

there are a couple of other things i will skip done again by david sabin and halter wanger. nick laurel makes the same points that there are other things going on. let me turn now back to the case of the philadelphia fed. in a statement by its president charles plus or saying basically if the real problem is a mismatch problem then what is the role of monetary and fiscal policies click stimulus doesn't help if what you need to get out of a recession is trained carpenters. first of all let's make the obvious point, to employment in construction plummeted and hasn't come back much. so there is a real issue there. but i want to disabuse you of

the notion that simple picture that employment happens with these moves of total change in occupation and not the kind of really dynamic economy. keep in mind even in bad times 4 million people in month get hired. this is a very dynamic economy. you are not waiting for the retraining before you can fill in nursing vacancy so to take a look at that i pulled up the data on displaced workers. this is interviewing workers who lost a job and asking at the interview time and it looks back three years on average, to looking back a year and a half, where are you now? are you employed now? are you unemployed now? are you out of the labor force? what i wanted to do was ask a

question does construction really look that different from the rest of the economy? and i get asked this question by looking at people who lost jobs in the construction industry and looking at people who lost jobs that were labeled in the construction and maintenance occupation. and these are what is called long tenured displaced workers. these are workers who held their job for at least three years or more before losing a job. what you can see, construction, general of economy, that they look pretty much the same on the story. the idea that you have to focus on retraining. retraining is important, don't get me wrong. i think it's a very helpful part of helping workers and helping

the economy but the thought that you shouldn't do monetary and fiscal stimulus because you are waiting for retraining doesn't past -- pass muster. here it is with all workers. they don't have it with all occupations. the same picture. it doesn't very -- differ very much. construction and economy as a whole. so my bottom line is we haven't unemployment crisis. we need to be running not just monetary policy to stimulate the economy but fiscal policy and unfortunately the federal government has been moving the wrong way on helping the unemployed. and has been doing it in a way that is well, let's just call it not very intelligent in the sense of cutting spending on

things that we really need to spend more on as well as the things we have to spend less on. we are not seeing a focus on what helps the economy grow on investments. investments in infrastructure, investments in education and training, investments in basic research because that is an important part of the growth of the economy and with the drying up of federal research funds there's a whole generation of potential basic researchers who don't see an employment opportunity down that road. well, but about the debt problem collects i call it a debt problem in contrast to the unemployment crisis. washington thinks we have a debt crisis and only in unemployment

goblin. i call it a debt problem because long-term we must be doing something to get sustainability. the thought is that would derail the economy in the short term just the amount of debt held on the public seems to me to be extraordinarily unlike late. but is there anything i would recommend doing right now that would have a serious impact on the long-term debt problem and is it something we know how to do and is it something that is worth doing on its own? the answer is social security which as far as i can tell is on the agenda of no politician. that is why i'm an academic. and yes, under current law a couple of decades from now

everybody would be getting a 25% cut in their benefits and that would he a crisis. it's a crisis that we were facing in the reagan years the last time we did a major reform of social security and we can wait until the last minute and do something about it in the congressional budget office assumes that is what will happen and the debt rejections are based on the assumption that benefit cut doesn't happen and benefits go on being paid. so if we restore actuarial balance and there are a lot of different ways of doing it, can't naturally i think the book i wrote with peter orszag close to 10 years ago is still a good start on the problem. with that book 45 years down the road from it, so we took 25% of

gdp reduction in the debt held at the public. so this is not something trivial. this is a big deal. this is worth addressing and to be fair to the panel i looked for something that dean baker has said that i could disagree with. this is 1999 and admittedly i had to go a long ways back but barry is saying oh social security let's not deal with that. i think in the current time given the unemployment crisis, could given the fact that anything in social security will be slowly phased in and if we do that it won't he have done like lots get voted and voted. social security will stay fixed for the term that the fix applies to so let's stimulate the economy. let's focus on investments and

do that and let's fix social security. thank you. [applause] >> thanks very much mr. diamond. i'm sure there will be a lot of questions from the audience but first let's get the other panels a chance to respond. do you want to go first? >> i won't get into social security but i will say a word about the debt. i would be a little stronger in saying i think there's little concern for the debt at present. japan sets an example because people probably know there's a new government in japan this last fall with the explicit policy that they would stimulate the economy. early in that story their growth rate moved the first half of 2013 to 3.5% and just a starting point there had debt to gdp ratio is about twice as high as ours. that is one reason why i'm not

that concerned about that right now and i'd also point out we look at the metrics of interest payments to gdp although the debt-to-gdp in the u.s. is at its highest level since world war ii. our interest payments are gdp above 1%. by comparison in the early 90s it was 3% so if a while at least my feet to rethink the debt is posing a serious burden. i want to go over a few points. i agree with most of what peter says knight don't have that much to beat him up on but i will emphasize a few points in take a couple things in the debt different direction. looking at his paper and i should i have known he would bring up to date data but the data for the most part data for august of last year and is kind of interesting to me. obviously i have more up-to-date data as well but what is interesting is if we were looking at the beveridge curve story as of august of last year it's in much worse problem are

much worse anomaly that the unemployment rate was at 8.2% step in -- and so this 7.3%. if we look at how much we are out of line by 40% and so if we were looking at this at structural unemployment 40% structural unemployment unemployment we have had disappeardisappear ed. i can think of one simple story that i think explains a lot of fat. period of extended benefits has been cut back and i suspect that's a big reason for it to plummet. if we look at the unemployment population ratio for the most part it looks like a story people are leaving the category of unemployment. not good news but if we are simply looking at this as evidence of why we have the problem in structural unemployment that problem is their third -- measured by the beveridge curve is less serious. there is good research showing

that most people in their benefits are ending are not going into employment. they are leaving the labor force. that seems to be what's going on. not necessarily a happy story but that was her story of structural unemployment. much has gone away fairly quickly. again you can argue what you feel about unemployment benefits but i think a lot of what has gone on in terms of the beveridge curve is a link to benefits which of course is ace policy with the implication being of course will benefit people have a lower unemployment rate. again is not a happy story people leaving the labor force but if we are looking at structured unemployment but we have have done is affect people in labor force who would not otherwise have been in labor force. the second is ghayad and

dickens i agree with kevin and i know i have no idea where kevin will go. my view is actually the finding is interesting and to remind everyone the finding is the shifting out of the beveridge curve is entirely a story of long-term unemployment so we look at people unemployed less than 26 weeks there's no shift doubt whatsoever. to my mind is a pretty good reputation of the structural unemployment story because all the long-term unemployed work was one-time short-term unemployed and they are not being hired with any less frequency than they were before we saw the ship so we are seeing the shift. the long-term unemployed were short-term unemployed at one point and they got hired with the same frequency before the shift. i think we are trying make an argument about we have a fundamental structural shift in the economy. i think that helps to underline that story. so again i'm not sure if that's

the direction kevin will take that but if you look at that and see the notion of the short-term beverage courbet does underline the case. another point that peter made and i want to carry this a step further. looking at the instruction -- there's a lot of wisdom the story as we have lost these jobs in construction and manufacturing and health care wherever they might be. and again taking peters pointed step further we can look at unemployment rates for construction and manufacturing and construction is a seasonal element but it really won't change anything. and structural unemployment for people used to being in construction in august is roughly 5% of the workforce. the difference between 9% at 7.3 is adding one tenth of 1% of the unemployment rate.

that can't explain very much. those wondering about manufacturing its about 6.3 where people have been in manufacturing is somewhat loathe the overall unemployed grace of someone who wants to tell a simple story might be a more complex story that we lost all these jobs in construction and manufacturing and those are coming back or coming back slowly whatever you want to say it doesn't fit the picture very well. clearly that can't explain anything. the next point i was going to make as we have the first side of of the unemployed. they want to make an argument about structural unemployment at least implicitly it's a story that we do have these sectors for shortages. on the one hand we have workers with skills and on the other hand implicitly some occupation location that has real labor shortages. the question i would want to ask is what are those? obviously there is things we would look at obviously rising

wages longer work weeks because we have firms that want to get more workers but they don't have the right people with the right skills in the right location. you can look through the economy and i'll think you'll find a major set or where that is true. i always have people that point to north dakota and i'm willing willing to get them nd. the labor force force have outlook that it is roughly 300,000 workers in north north dakota and let's say we increased that by 25% so we have 100,000 workers there. we reduce the unemployment rate by 1% so you know i'm sure there are a few other nd's out there but the point is you really can't tell that story easily. just a couple of other points. one is the point that michael made at the beginning about the jobs being created in bad jobs. i was just curious about a simple test of this.

i -- the change in the restaurant share of employment against the state unemployment rate. the question is the states that have the highest growth in the restaurant share of employment the restaurant being a proxy for bad jobs the highest growth are those states that seem to be doing relatively well getting a lot of jobs are doing relatively poorly. there was a strong significant relationship between the unemployment rate and a positive relationship with higher unemployment rate. my take away and i'm not saying it's exclusive but my take away is what's going on is to get bad jobs and you don't get other jobs. if and when we see the economy recover. the last point out bake and deserves to be driven home like a thousand polls and peter is trying to make it not as well perhaps but again there is no more distinction between the

structural rate of unemployment has risen and whether we can benefit from stimulus. let's hypothesize before her structural unemployment rate at 45% and now it's five to 6%. we are still looking at an unemployment rate of 7.3% in that suggest we have a lot of room for stimulus. i think we have to keep that in mind unless we are prepared to say the structural unemployment rate is something like the rate we are seeing today. there's lots of room for stimulus and we really should talk about that. >> thanks steve and thanks peter for your comments. they are always quite challenging and stimulating. i think the punchline of my comment is going to be that i think on policy you and i would agree or at least that is an abstract principle that there is a possibility that there is a

structural problem that needs to be addressed because of the unique characteristics. that's his thing in my research and writing including some that i have been focusing on. the basic idea is we had the deepest recession, at very long deep recession with very high unemployment rate for the same period of time. this recession is a little bit different from the ones, if we go back pridie president herbert walker bush and you look at the recessions typically they lasted less than a year and gdp would drop a couple of% but the year after it would go up six or 7%. and this one we went down and the state down and we did not snap back so the question is what kind of enduring problem

might arise from this position and does that present a challenge to policymakers without throwing away the part i want to make sure it's not misunderstood without throwing away traditional rules but doing it to think about adding a few that we haven't used before? if you go back and look at the beveridge curve it's parallel to the one from the last decade. as an abstract principle with the clever enough stimulus policy monetary or fiscal or whatever that might be, you ought to be able to slide along that one and take it to an unemployment rate that is acceptable as well. the question is that the only thing you need need to try? is there a reason to think about white this time might present any challenges and i think for

me i have been moved in to buy some writing by dean and others that suggest that when you have, when you create a stock of folks who have been unemployed for a long time they are deeply difficult to reattach to the labor market and in fact one of the first things that made me think about this or wonder about this was when vince reinhart was still here and he had this data and rogoff were working on what happens after financial crisis. one of the things that stuck out when you look at the data was that if there's a financial crisis and a recession that all is the financial crisis in the typical country that has a financial crisis at decade after the crisis happens the unemployment rate and now i'm using eyeball is double what it was before the crisis happened. so it's very common for the

unemployment rate to stay high for a long time. so back when we were starting to worry that this would be a long one and you are worried about it and it made the point that is why we should to infrastructure stimulus because who cares if it takes a long time it's going to be long recovery. the question is why is it that the unemployment rate has stayed so high for so long? i think this is what i've been writing about after someone has been long-term unemployed or has been unemployed for a good long time they face unique treasures and challenges that i think policymakers have been tone deaf about here in the u.s.. this is the chart we showed and this relates back to the point. if you're wondering about the beveridge curve which is one of the topics on the unemployment it seems like the -- i'm not

saying it's causal but the question is is it likely that the folks who are now long-term employed if they lost their job a few years ago that they will be especially challenging for old-fashioned plain-vanilla fiscal policy. i think that without going into it in huge detail because it's just a comment i think there is for me an overwhelming case that long-term unemployment is uniquely an awful thing that next to the death of a family is a very horrible effect on the people and in the united states today we insufficiently have a sense of emergency about the poor people who are going through this right now and we need to be open to policies other than the traditional

stimulus policies because of that. for those of you who are watching on tv you don't necessarily have to keep the tv down but if you go to aei.org you will see this event is on the web site and the materials are there so few want to look at slides are additional reading material from the panelists you can go there. for the long-term unemployment rate the death rate increases by 50 2-1/2%. that obviously will be correlated with health. death and health work related. increased suicide rate increases male suicide rate at 1.5% so as of now that means we are still 128 suicides per month higher than we would if we didn't have the long-term unemployment problem. risk of dying of cancer.

you see these rates and again i think it's related probably to increased stress and i'm sure there are a number of factors but also in increased prevalence of comforting substance abuses and so on correlated with oncological risk. financial losses are significant. fewer work or to experience long-term unemployment between 202,011 have experienced a loss of income of 40% of more so refilling the whole is a big challenge. once workers who unemployed find jobs there earning stay low for a good long time so those significant losses are also going to be something that i think will tend to make them be reluctant to reattach to the labor force if there alternatives such as disability they can turn to. long-term unemployment is such an awful thing for family that

rental unemployment increases the chance of a child repeating a grade by 15%. children whose fathers with his job when they are young have lower earnings as adults. my point is this is a horrible human tragedy that gets worse and worse when a person is unemployed for a long time and we have got millions of those people in the united states right now i'm just having some extra aggregate demand is not enough. dean you probably know this fact but the probability of being reemployed if you are over 55 and have been out of work for more than a year is pretty close to zero. it's pretty close to zero but these are people we need need to reconnect society and this is why some of the writing is funny. i have been celebrating more than usual if at all and left-wing places in the last year. because i've been arguing for

example for a number of measures to reattach people to the labor force including direct hire. the government jobs program where we hire people so they have a job so they can look for a job and so i would just say that i think the data said to me because we have had an extra long recession with extra high unemployment that we have created a class of people that because of the stresses and the awful life experience that can hit somebody who has been out of work for a long time they will start to have health problems and become a person an employer may not want to take the risk on that we need to be super aggressive about reconnecting and just relying on aggregate demand management seems to be insufficient. that is what i've been writing about. i promised at the beginning that i would have a highly traumatic moment where i would say c., don't we agree? don't you agree? [laughter]

[inaudible] >> thank you. contracts. yes,. [laughter] yes, targeted programs on the long-term unemployed are something we have under invested in for a very long time and the cost of under investment is particularly large now. but, let's ask about the context where those programs will be functioning. if it's in a tight labor market, they will be functioning dramatically differently from how they will be functioning in a loose labor market. you retrain people in a place where and an economy where it's very hard to get jobs because

there are a low number of vacancies. vacancy rates are low on those beveridge curve charts. then the probability of a payoff from that investment goes down. so yes i agree we should be investing in helping to reconnect the unemployed but i hope you will agree that a plan like that is far more likely to be the label if it's accompanied by actions that give us a much tighter labor market than we have now. okay? the second thing i want to do is again the context shift around something dean said. when you talk stimulus it sounds like there is something out

there that you turn the faucet at stimulus and the turn of the other way it goes away and you don't get the details of what is involved. if i were focusing on what do we need to do to tighten the labor market to enhance economic growth the word stimulus comes late in my presentation. i would start off by saying that we have under invested in infrastructure for decades and that hurts the economy. it's not just the jobs. if we repair it rich rather than having it fall down and rebuild it, but the economy functions better when the bridges are up there. when the air ports are running better, when the trains are running better.

we need infrastructure spending and the question i would ask is this a particularly good time to be acting against this multi-decade neglect? you but, because in part the workers who will be drawn into it would have been otherwise unemployed. the social cost of that infrastructure investment is a lot less than it would be in a tight market and we do get the employment on this, the multiplier. but i want to start with we have a severe infrastructure problem and this is a great time to be addressing it. as a bonus it will make kevin's plan worked better. and i say the same thing with

basic research which is vital for the economy and i would say the same thing for our need 4k through 12 investments. we need experiments. we need to have a better sense of what works and what doesn't work but you have got to have a very serious view of the teaching process to think that laying off what is the, 500,000 teachers in total to date, a big number, that is going to help with education. that seems to be very unlike way.