the next room over here, and thanks, everybody, for coming. [inaudible conversations] s

are permitted to speak for up to ten minutes eesm the senator from rhode island.

mr. reed: mr. president, i ask that dr. jeff fine and lawrence that dr. jeff fine and lawrence >> mr. president thank you very much first and ask unanimous consent that fellows of my office of the we granted historical support and i'm pleased that senator heller has joined me, so this is a bipartisan bill also. and it's something that we have to deal with today. it is a huge crisis. aces i said, 1.3 million americans have lost their benefits as of december 28, but we can expect through this next year approximately 3 million

more to exhaust their state benefits, typically 26 weeks, and not have this federal long-term benefit available to thevmenvery many. this has awless received federal support on a long term basis. it is something that impacts this entire country. it impacts people who work. you cannot get this program unless you have a job and through no fault of your own you've lost that job. and in this economy people who lose jobs are competing with many, many others from for very few jobs. 1.3 million americans were pushed off an economic cliff just nine days ago. this vital lifeline was helping them cope. they were not left -- let go from their jobs because of something they did. it was because of no fault of of their own.

and they're searching for work in an economy that has nearly three job seekers for ever one job oasmg i will us will traive of this a front-page story in "the washington post." in maryland they are opening up a new dairy operation. and what this story speaks to is something that is happening across this country in so many places. when the good humor ice cream plant closed here two summers ago, more than 400 jobs and a stable punch-the-clock way of life melted away. i would add parenthetically that in connecticut, in rhode island, across this country, west coast, east coast, north and south, we have seen this happen, manufacturing plants close, move overseas, shut down entirely *67.in plant sat vacant until a

co-op of dairy farmers purchased it to process milk and ice cream though on a smaller level than unilever churned out every day. randy spaictded the plant's plas revival to trirk plenty of interest in its three dozen or so initial jobs. 36 jobs. what he did not expect, 1,600 applicants and counting. that's what this economy is about. skilled people losing jobs through plant closures. their whole way of liervetion many of them working for many of them working for losing jobs through plant closures working for decades and suddenly see a app possibility but it is not one job for one applicant,

but 1600 applicants for 36 jobs. they are trying. they are trying awfully hard. but unless we have this legislation thisc evening to begin the process come a day are not trying.nal bu on the economic side from dynamics fell 1/5 failure to renew the unemployment insurance would cost to the 1000's jobs andho the south point to% economic growth by the end of the year. why? because these payments go to people who are desperate to who need theen extra cash it is $350 per week. when they needed to pay s rent, buy greece, keep the boiler reding in sub '04 temperatures as they look

for work and in order to collect they have to look for work. b not just a fair to people who have worked hard but it is smart for our economy. this is one of the best fiscal tools we have available to create additional jobs and as i indicated if these benefits lapse and go away 200,000 jobs are lost at a time where every member of this body went to create more jobs for america. o we can't do that.te. but we have to start today of this procedure to vote. of the families that have weathered through the toughest part of the of the recession t in 2008, 2009,

2010, they were better off one year ago maximum unemployment benefits, the 73 weeks plus state benefits is 26 that is 99. that is about two years. are they got through some of the hardest part of this w recession and shows they are goodgh workers, they were struggling and working when unemployment was much higher. now they need help. i believe we have to give them that. we should be working together so when there are new plant openings there was a lot more jobs. you could see that 1600 jobs and 1800 applicants the my

colleagues said they cannot do this because they need the offset. it is the emergency spending because they extended that of the emergency basis aren't 200,000 jobs if we don't extend them. helping our economy. and we have to do this. we did this so it is just three months to provide immediate assistance to pick up those people who lost benefits december 28. with the committees and the house. in the orderly way. to make changes if necessary to look at the appropriate offset that those are all -- necessary but to work in

these three months to richer people have something to get by with. by my count my colleagues voted to move forward on the non-emergency benefits 10 times since 2008 we have taken this 10 times insurance program passing it with the emergency basis. so this is not a new or novel approach in fact, what is new but it provided offsets for emergency spending. i hesitate to say i would venture, if we brought up the bill that had a huge tax cuts for the wealthiest corporations and individuals to their repeat of very little discussion with offset.

talking about a program that helps working people, offsets, traditional ly we have not done it but we can't have that conversation but to help these people we have to move forward. give us the time to instructive lee and collaboratively and it's awfully move on a program and also on possible offsets. we should be passing this measure working cooperatively through the program if we can, and if we give it appropriate discussion. i have heard some of my colleagues have been very vague about their offsets. some suggestions of medicare, social security, discretional spending, but i don't think americans would want to see those types of cuts.

but through good work through congressman ryan we have a budget for two years and appropriations bills but we're beginning to provide certainty and support for the economy. i do sense my constituents know that there are many people out there that are struggling to find a job that want to work and need a little help just to get by. that is what we are doing if we pass these measures this afternoon. again, we will seriously talk about the steps of the change to respond to different dynamics in the economy. with tooling proposals it is done to regular order in the committee. i cave in here and offered a

one-year extension that was not offset my colleague it objected in i completely understand for doing that and the right to do that they argued it should go through a committee but this three month bill does help people and immediately, and gives us the time to do our jobs. a few weeks ago there was an argument that has been percolating that somehow the fault unemployment insurance program is being abused him beneficiaries would rather collect the of work but the reality is $300 a week is not something i think people would give up for a job or allow themselves to be displaced just to collect to the benefit. i believe americans really want to work and get back as

quickly as they can. they want to do the work they have been trained for not just their time but there whole self. one of the interesting things about work not only a form of economic enumerations but the way we define ourselves. within a few minutes of me i bet one question pops up. what do you do for a living? for millions of americans to say just that i am looking for a job as millions are. there is academic research that is bandied about all this business that the research supports the notion that individuals would rather work than collect unemployment insurance.

unemployment insurance benefits are a fraction of what they would earn in the job they had previously. these benefits keep people hold while they search for work. there was a very eloquent editorial in "the new york times" and i think his words are very potent, he wrote wrote, we are not sure some people abuse any form of help but i present this is for the up for. not the wealthy to take advantage of subsidies and tax loopholes without blinking an eye but somehow the poor people largo's who unexpectedly fallen on hard times to give you digit benefits that they are eligible talks about the morality in character of the port as a whole?

i think that is the case. i agree with the senator. these are people who want to work. they need some help. we have given them help in the past and we should continue to do this. this program has been a critical and crucial safety net to families. helping them get back on their feet and helping them get back into the workforce. and it has been with us since the great depression. it affects a whole spectrum of individuals. if you look at 2012, about 40 percent of the houses that received benefits had income prior to job loss between $30,000 and $75,000. these are middle income americans who would much rather be working to make close to what they made before they were laid off and collecting $300 per

month. in fact, more and more it is a middle-class in middle-aged people who never thought beyond unemployment insurance. there supporting elderly parents, they have children, mortgages, a professional career career, accountants, paraleg als, bookkeepers, now looking desperately for work. or those in dairy processing plants. 1600. or those who were so desperate on some of the present days there would be qualified to do many things but they are looking because they desperately need work. but the argument is the program doesn't work than the people are undeserving

we are not doing them a favor. i disagree. we have to pass this measure because it is the right thing for these families in the right thing for the economy. it would be foolish frankly the we are confident we can create 200,000 jobs and increased gdp by 0.2%, that is the best form of policy to stimulate demand and economic growth to say we will not do it. i think we say we have to do it. there is another aspect of appropriate to the issue of long-term unemployed. we see a remarkable number of long-term unemployed

individuals in this recession. typically these benefits were never ended of long-term unemployment was 1.3%. this takes care of long-term unemployed. the standard program of 26 weeks with a brief episode of unemployment if you lose a job than five weeks later you get a job you are in the first to launch of state benefits. these individuals at least have been without work 26 weeks. we have seen that number long-term unemployed double 1.3% now 2.6%. this program is more important now than any other previous one we have had based on these numbers. again, another reason to extend these benefits. i urge my colleagues to support this procedural vote to so we can consider the

measure. we need to move swiftly to pass a bipartisan bill to have some stability, some support for families that are struggling. the answer i would suggest is those who are considering voting against this evening is fine. if you come down to tell the clerk no. what will you tell the 16th hundred people in maryland and across the country who are looking for work and need support. what will you tell them? i hope not. with that i yield the floor. a senator: madam president?

the presiding officer: the senator from nevada. mr. heller: thank you, madam president. madam president. >> madam president. >> the senator from nevada. >> i rise today to discuss initiatives on the forefront of the bringing in the new year. that is extending benefits for the unemployed. that of course, is for americans. >> i want to thank my colleague from rhode island senator it reid for his efforts on his behalf as we work together as our staff has work together to get this proposal to move forward for today's vote. i hope my friends and colleagues everyone returned refreshed and ready to tackle these issues we had in 2014. fortunately while congress was in recess approximately 17,000 people greeted the year now with the optimistic

view was of a fresh start bit how they would pay their bills. the congress left washington d.c. in december of important matters were left undone if expire. many americans were left with no idea whether or not their benefits would be fixed retroactively, something that has become all too common for this congress to do. helping those in need should not be a partisan issue. providing the social net is one of the responsibilities of federal government. unfortunately instead of planning ahead to figure out the best way to do that, we are now forced to decide whether or not to reinstate these benefits after they have expired. we should provide some relief to the millions of americans that were left hanging when congress went home in december to temporarily extend

unemployment benefits for the next three months. is the right thing to do. the shore period multifamily is whose benefits expired abruptly while congress works out a longer-term solution with some certainty with that is fiscally responsible. in the stand the concerns of the cost of my colleagues and the desire to pay for this extension. i also want to see our federal debt brought under control but my voting record is proof of that concern. i also believe congress should be more focused on passing laws that help to create jobs. growing our economy should be the primary focus and concern of this body. as a senator of the state of the leads the nation in unemployment, believe me i understand the need to focus on jobs. i would rather be down here discussing today integrative ways to create jobs instead of the need to extend unemployment benefits yet

again. but madame president, because of this administration and even some of the choices of this body body, unfortunately, congress not going quickly enough millions of americans are still hurting including a lot of the vatican's. i repeat often on this floor consistently nevada chops -- tops a chart of bankruptcy's and foreclosures those statistics are revealing the more startling is the increase of impoverished nevadans that i am when i go home for crime like to show an example. every thanksgiving wonder to of my children to serve thanksgiving dinner to folks who are in need, cannot cook a thanksgiving meal for the souls. this year my daughter in her freshman year of college and

joined to be in this experience. every year. that dinner sees more attendees. every year more individuals and families you need help increases. this year it was absolutely packed when my daughter in dire by to the line was four blocks long outside. it is such an obvious example of how so many nevadans are unable to provide the basic needs and this cannot be ignored. there is a nashville employment rate that is improving but we don't see it at home. the unemployment rate in nevada consistently exceeds the national average and has led the nation the past three years of unemployment. the results of our people in nevada are hurting. it is difficult to stand here, in the nation's capital, an area that has

little negative impact for the recession to describe just how tough times are for so many of my constituents. at these thanksgiving dinners individuals are forced to make to buy gas for their car or heat in the frigid nevada whether or buy school supplies for their children or perhaps save for the future. these are hard-working individuals who rely on these benefits and try to find a job. they want to provide for their children. but for these benefits to simply vanish without giving families a time to plan or figure out an alternative is just not right. i understand the concerns about the cost of these benefits. i would prefer to see them paid for in a manner that does not burden the nation with more debt. i previously introduced legislation that would do that.

that would extend unemployment benefits while still paying for them. at the time i introduced my legislation as the alternative to more costly bill because i think it is important to bring our nation's debt down. a ready to work with my colleagues for similar legislation again this year but in the meantime, i propose we pass this short extension now. to allow congress to spend the next three months how to pay for benefits in the future or perhaps on much longer they should be extended. those are important questions worthy of more debates. in the meantime, congress simply must provide some temporary relief to those who are unemployed. these benefits would be the best approach. congress could have taken a harder road to figure out how to do that before departing for the holiday break and leaving millions

of americans hanging. but they did not so let's pass a short-term extension and put out a more fiscally responsible solution for the long term. madam president, i yield the floor.

instability through 2014. including the serious civil war and afghanistan in nuclear program. life from the council on foreign relations tomorrow morning 8:30 a.m. eastern. c-span2. . .

to does challenges facing korean's economy in the 2014 and korea's growing influence in the global economy. korea's story is one of the economic success. korea merged from poverty after the korean war to become one of the world most vibrant economies, in fact, within the span of 60 years. korea has moved from state defendant of foreign aid to becoming the 12th largest economy in the world and a member of the exclusive club of developed nations. in fact, the highly respected financial affairs journal

recently picked south korea as well as the sixth hot markets to watch. according to the editor of foreign affairs, south korea has profited from smart leadership and approximate sim toy bigger players making their manufacturing-driive economies especially appealing for investors. does this mean everything is per nect in korea? no. economic and political events in other part of the world can negatively effect korea's growth. the ending of quantitative easing, economic policy of the new japanese government under prime minister, the volatility of the northern korea's regime and trade protectionism around the qorld chip away at economic growth in south korea. it's not all. korea faces domestic changes as well from demographic changes to a skill skip in the work force, which according to the world bank required korea to recruit

nearly one-half million immigrants to fill open positions in the 84,000 small firms over the past decade. our purpose here today is to hear from korea's preimminent scholar in the field of international economics, and the role korea places in the global economy. he's qualified to talk about the matters. working through two different periods in korea's economic history including the asia financial crisis of 1997, and the global financial crisis in 2008. doctor lee was recently appointed as new president of the korea institute for international economics, international economic policy, which is south korea's leading institute concerning global economic issues. and also, as ambassador for

international cooperation and g20 here is pa for the republic of korea. you're pretty busy. dr. lee we look forward to your remarks. he's going to speak for 15 or 20 minute. and we'll open it for questions. if you see waiving it's time for questions. at 3:50, we have another korean guest, mr. samuel samuel minje cho. is he here? did he come yet? okay. and he will make a few brief remarks on korea's role on in the global economy. dr. lee, the floor is yours. >> let me get my watch out to keep the time. can i have the presentation on the screen? thanks. >> okay.

what i plan to do is spend five minutes discussing about the global economy. next five minutes how the g20 views the concentration, and the next following five minutes on the current economy. so i'll sort of spend five minutes each on the three topics. they are all intire related. the first five minutes, i'll speak as the president of kiep. that's -- the following five minutes of the sherpa. that's what we're disuthing at 20 level. and the last as an economist -- independent exist -- economist. let me start. let me start with the economist. it -- by essentially talking about the global economy first. according to our outlook, kiep

is the only government-owned think tank in korea responsible for international economy as well as analyzing the potential impact on korea and we have our own protection of the global economy that we work closely with cimf. it's related to me being former -- actually happened before. i actually joined kiep. as we can see here, next year economic -- global economy will be socially charting along no surprise is expected. there's a big question to be asked whether the flow recovery essentially represents a growth or -- existence of large output gap or weather the growth is low. the questions are still up there. nobody knows for sure what the answer is.

next year most leekly will be growing strong per. they face their own problems. i don't think they have been able decouple themselves. depending on what happens on the advanced economy the countries economic growth reveal factored. and large part also through how fast it will take place. whoops. so our economic outlook globally next year lead by advanced economists but there are secialtly five risks. i'm not going to go through it all in detail, but essentially the question i'm asking myself is, will the u.s. recover sustainable and obviously it will dependent on several key factors. the answer to which i am not fully adversed and covered these

in a minute. and the second is -- in reality or will it continue to slide downward? and again, there are assumptions for one to answer the question. and third, china up for a reform of growth here. the outlook -- little bit more certain of the actual outlook if we know what the policy -- because the economic growth in china is largely quiet pretty well determined by what policy actions of chinese authority will be taken. then can economic -- [inaudible] growth in japan. again, here there are many conditions one ask has to ask. and five, what is the source of economic growth in emerging economies? related to decoupled themselves from advanced economies or not. if not, you know what has lead to recent strength or recent

weakening following strengths in the economic growth so calm of these -- even at the outset crisis. u.s. recovery fiscal consolidation was shale gas benefits. part of the, you know, the -- u.s. recovery will be sustainable we have to ask ourselves how fast will the fiscal consolidation be, and also will the impact from shale gas benefits be larger than what one -- what the recent reports seems to be indicate. so depending on where you -- which path emphasis recovery would be sustainable. but if you look at over the medium term, again, the outlook doesn't indicate that there will be any certainty in one direction or the other. there's still consolidation that has to take place. particularly if the new health

plan and the pension payouts based on demographic will have to be financed in some way. that means that the nonhealth part and nonservice part of the government spending has to come down quite rapidly over the next 10 to 120 years. it's not clear whether it be sustainable. it depends on economic growth can sustain itself. so there's a lot of ifs there. but the point i want to make -- point out here is that u.s. recovery -- whether sustainable or not is not a guaranteed outcome. there's a lot of ifs that have to be satisfied. and then the second question is monetary policy normalization versus higher cost of funds. again, if you look at the average u.s. reel interest rate depending on the structure in

real term is potentially the operate -- by cpi and calculation shows that in order for the current interest rate to return to 50-year average in real terms, on the short end side interest rate has been increased by the basis point on the medium long-term side it has to be increased by 50 basis points. what will the impact on the balance sheets financial system corporate sector. not only in the united states but the rest of the world. so and how fast will it take place? that's the question that has to be asked. it's not necessarily the case -- it's not necessarily the speed of -- [inaudible] here it's in the on the table the right inside this is from the cfo. you can see that cso assumption itself is showing increase in

interest rate from.5 in 2015 to 3 percent. that is 50 basis point, which is what i was indicating. and the addition nam comic we have to consider -- [inaudible] financed at the moment is because the huge demand for -- [inaudible] once it takes place it's the recycling of the dollar funding of people itself. so that would be another drag on the u.s. economy. i'm not going to go in to too much details here. and europe -- [inaudible] part depends on whether financial can be stopped, reversed partly. or inaggravate whether the

financial market or the banking system capital can be raised very quickly to what extent the leveraging has to continue. what extent fiscal consolidation cam can reverse. in g20 there's discussion. some -- it remains above 0. it's relatively tight. it's easing but not sure where it bottomed out. on the supply side, again, demand sluggish reflecting weak investment.

it means thereby a recovery. and partly the result would depend on banking unit is -- [inaudible] can be successfully completed, and i think this is a very critical two component for the stability of the euro system i.t. without the conditioned satisfies i'm thing what -- the european countries may be able to recover relatively quickly. at some point in the future the same problem will arise again unless one can assure constant relative unit price across european countries.

having looked to the comiendz economy, the economic outlook or the performance in china is depended on the government policy, and if they position for the government to delay the reform and emphasize more than short term growth then i can assure there will be short term growth. but the cost is that essentially delay the reform to the future, and the reform magnitude that has to be dealt with in the future would actually start growing. it will be in the form of increasing in various forms. it's not captive easily in the banking but will be in reflected in some way in the economy and at some point will be reviewed. investment to gdp ratio. we came out with an estimate it should be around 40% for the

economy to be sustainable. the actual invest system about 50%. it varies a lot across regions. on average what we found was the east coast areas where economy development is relatively advanced, investment there seems to have good traction. but in noneastern provinces where investment tends to be even higher. attractions are poor. there's a lot of -- seems to accumulate. at some point somebody has to pay the price. whoops. let me point out one thing. one of the things that actually grieve -- drove the economy -- the recovery in japan through economics was the welfare -- an exchange. if you look at what happened actually in the stock market is

during the last twelve mobilities -- months we saw sharp increase in the sub prices and -- consumer confidence build up and increase in demand. but the composition of sales and. purchases once you start looking at this in more detail makes you feel a bit uncomfortable because essentially what happened was there was a lot of nonresident purchase of japanese equities, and very -- i equivalent lent amount of sales by domestic investors. as foreign inversers were coming in purchasing this equity, they were shortening their -- [inaudible] at the same time. so what that tells you is, okay, there's a problem in the global financial market that pull out, and meanwhile the japanese investors who we thought were, you know, the behind the confidence building were

actually not the case. they were actually pulling their money out and investing outside in sovereign fixed-income market. you may wonder, okay, why are they doing this? behind it it's largely the japanese banks. something goes wrong in the process -- and they said dollar market tightening and investors nonresident invest decide maybe it's time to pull out who already have the exchange positions. you will leave a large gap there. and with a we found out was simplest make based on -- indicate that if they torp pull out in a matter of about three months, equity prices could fall very rapidly it would a negative or worse effect. reverse the trend. if you add on to this -- the consumer tax next year,

there could be some problems. i'm not saying this is the likely scenario. we're not taking it as a baseline scenario. all i'm saying it's a possibility that one has to watch out and part of it. advanced countries through a normalization of policy -- monetary and fiscal impact on [inaudible] and four type of the countries in this regard. one is those with structure problems building structure problems as they expand. it's typically sort of china. but those who have been accumulating problems internally sort of a touch disease cases. commodity exporters, trek, at lough strong demand in commodity resources. and commodity prices went down the last couple of years. even during lately has been coming down. there's that problem. certain type of problem with the pressuressings pangs of

policies. it went up because -- [inaudible] global economy. once it normalizes they have a g.o.p. problems. and the final type are reversing back to local growth. both are largely countries where they had temporarily boosting demand. but the type of investment is not have systemic risk domestically and that is what happens if the condition normalizes. the economy revert back to a more probably growth. it's more of -- [inaudible] what one was lead to believe. okay. and more fundamental issues. these are the issues that we raise at the g20, and i think i already overshot my time commitment. so i will be very quick. the question that we have been

asking in g20 for the last year or so is the pace of recovery. is it normal? and of course the banking crisis usually it was severe then the recovery takes longer. it's not, you know, a surprise that the recovery is taking so long. but the question that we have is this slow recovery normal? and then we decided to address the problem. you're not quite sure whether it's normal or not. it's too slow. that's the conclusion that came up at the g20 level. it's not -- it's economy -- building out. the second question if that's the case is it technical or structure? that's the second question we ask ourselves. if it was a -- replanning help create the demand. rebalancing, as you know, will help make sure that some countries demand strength, and some countries demand weak and sort of overall global demand

remains. sufficiently robust in order generate or pull out the economy from the recession. and interest in rebalancing. if you look at the overall savings and then the press account balance. that's where the rebalancing has become from. and you can actually see that the countries savings has been rising very rapidly a share of gdp. advanced countries and -- countries savings have been follow -- falling. it seem to be the case. if you look at the chart it's a case to be made a rebalance to ensure the global economy -- robust. however, if you look at the second schart which shows consumption and gdp. you suddenly realize, whoops maybe we missed spg. because major advanced economy

g7 -- yes. g7 cubs demand as a share of global gdp is falling. while the consumption from en countries rising very sharply. the question becomes more -- complicated. maybe a simple rebalancing won't help. the reason it took place was because simply growth in the countries of rapidly. two -- too rapid. the question becomes not only rebalance but more how do we ensure that slow growth in the countries does not knowly accompany slower consumption? because consumption was growing already very fast and partly depended on the fast growth in gdp itself. but there is certainly a case to be made that investment has to

increase, but again, this is not a straightforward issue because it's more of a reallocation of global resources rather than, you know, race other investment on up. again, once you look at these things in more detail, these things become more complicated. it's not very clear how the global economy can actually incorporate to address all the issues. if the problem is structure in nature then it may not have -- at the public resources. okay so you know in the argument. if one were to become convinced that as long as the global economy can provide adequate, robust demands. let say for the next two to three years gamp start the global economy. i'm sure all countries will be willing to do this. the problem is if the real problem is structuring the nature, then if even then if the global economy torp agree on this stimulus, then two years

after wards everybody would be -- so the risk and we have to ask ourselves is it really structure or, you know, technical. and so the answer is not very clear. let me skip here. and probably reason why we think it's not straightforward. if you look at corporate profits, and this is just -- i can assure you this is not only the case in the u.s., but generally the case in all g20 countries. corporate profits have been increasing. for the sluggish economic growth, expansion fiscal policy, unemployment is not falling except the corporate sproft rising. it begs the question whether the competition product market. at the same time unemployment is very high particularly the use -- and it remains robust even

though the participation rate is declining. many young people are leafing labor market. even then unself-employment relatively sticky. it beg the question whether it's starting to demand creation. if you have an example if people get less and less and rich people get more and more income share, then the demand will be lower. the higher people much lower than those at some point if you go over the threshold that could impede economic growth all together and actually some -- study that has been done recently that shows a relationship between the two. i'm not going to work the detail. the problem is financing.

again, if the market is relatively competitive and working normal why is there not enough funding going to -- as usually higher risk. but then why are not properly price and no market created? any the problems that we don't know the answer to. lastly. let me me conclude by showing you a few slides in korea. just to indicate the problem of korea faces a lead to the rest of the g20 as i'll show you. let start with gdp growth. it is well above world average mid 2000. since then it sort of was growing at the average speed of the global economy and more recently the global economic growth in korea have started

familying below the global average. so korea has some economic problems at the moment in that it is sort of slow. it could be a temporary phenomena. part of the reason depend on the growing. it's natural to expect the economic growth is also affected. since the crisis. yet largely increasing that have more to do with short domestic

investment overall. and this, again, i showed you early yes we have investment problems at the global level. it's not the reallocation issues. from slowing exports snap driving up the -- [inaudible] the -- [inaudible] one has been appreciating a lot recently. but that is not reflected on the trade side. so whatever seems to be happening on the trade side doesn't seem to be directly related to the real exchange rate going on in korea. japan has been negative. the yen appreciated a lot. it indicate growing fist

indication of growth and vertical integration. even if it's actually growing. let me skip here. because all i wanted to show is that the -- [inaudible] that i describe for the g20 countries increasing corporate profit, increasing wage declining wage to the corporate are also true for korea to a lesser degree to lesser extent than the average g20 country but still it's evident. income inequality has been improving. overall if you compare it to 20 years ago it deterritorial rated. not as much in the average of g20 but still. it's reflective of what is going on at the global level. policy response, i think for the --

through bilateral as well as had some in bali package fortunately. so it hopefully will help promote trade. sorry i don't have time to go to all the detail. i want to lay out the key policy charges are. and the final thing is changed the economy itself. essentially it's more -- innovation and making ideas sellable. and make sure indian finally innovation is translated to f -- not i'm thinking too much recently on fta. [laughter] and innovation. making innovation to tsp it's important and more complicated than appears to be.

let me start here and answer questions. [inaudible question] stand up and introduce yourself. >> i was looking at the u.s. budget figure. you mentioned the growth of the -- [inaudible] in the next ten years projection is interest on the debt -- the debt. one and a half percent of gdp to over 3% of gdp. at the same time, the discretionary spending -- [inaudible]

you can see the interest payments are -- discretionary spending down. this will translate throughout the world, won't it? that's my question. if you can elaborate. >> what will happen is that spending in con elevation u.s. will suddenly impact on the u.s. economy. so and that the impact on the rest of the world will be because slow growth have -- [inaudible] the but the average interest rate for the rest of the world. and that will have a severe impact on the e.u. countries as well as -- [inaudible] balance sheets.

again, i have not -- [inaudible] the interest rate for -- [inaudible] already probably that close to -- [inaudible] of gdp interest rate. i'm not sure 100% at the moment it's -- [inaudible] large share of global -- [inaudible] if interest rate increases by on average then it means truthfully and assuming that sort of pass on -- in that what it means is that revenue to interest payments a share of revenue would probably go up from 30 to 40%.

, you know, taking on the balance sheet on government as well as corporate as well as financial will be -- [inaudible] will be fairly large and have large implications. that's what i was referring to. >> i guess -- [inaudible] the next question. oh, come on! well, okay. next question or comment. way in the back. [inaudible question] i was wondering your visitation was -- [inaudible] with great mathematical analysis. i appreciate that.

reflective g20 in general and -- [inaudible] the g20 on average. i was wondering for you can sort of e will be rate -- elaborate or speak about korean -- [inaudible] and how capable it is of addressing those challenges. it you can do real toift g20 that would be helpful as well. >> just talk right in to the mic. it's too high-tech. >> the simple answer is yes. korea will be able to address the challenges. this is the politically correct answer. [laughter] the current policy in korea. we are pursuing actively opening up a trade system through --

recently concluded that, you know, it was australia. with have to express interest in joining the tpp or studying the discussions. we are also pursuing with china as well as china and japan together. so in other words we have a lot of things going on in the trade side. so obviously we would like to further liberalize it. it not only help boost export and imimportant provide greater -- within it as well. it's one area. second area is creator of the pursuing policy that will end competition in the market. it's very focused on ensuring that competition in korea product market is improved. and she would like through

ensuring the regulatory framework is in tact. and also the competition-based or unfair competition in the system. these thing she immediately cleared the g20 summit. that's a work in progress. and lastly but not least. we have a policy established that -- creative economy. that's the last slide i was showing that -- the pots trying to convert innovation in to tfp. that's the shortest and the most probably accurate discrepancies of the economy. i'll give you one simple example. innovation is not -- innovation becomes tfp if it has -- and that's the key. that's what she's trying to achieve.

probably national economic council. a quick question. with china's recent sort militant single female and sort of the -- and sort of assumed that the -- inaudible question] will it have an impact on the korean economy? >> i don't know the answer. purely from an economic politic economic point of view. the defense -- and policies in term of economic growth. it could work the other way

around. i don't know the answer. i haven't looked in to the issue. yeah? you had discussed in your presentation the -- [inaudible] the united states has a significant account germany and china had surpluses in the trade account. but what are the challenges that you face is that to do this, it means as you mentioned as well that some countries need export less how do we overcome those sort of broader economics and rebalance the economy to a more

sustainable level? i think the surplus countries certainly are not accumulating -- are not maintaining surpluses because they want to. of course, one could argue why don't they let the exchange rate as a sing the strowment allow their trade or -- [inaudible] the reason i'm saying that is because in many -- not all, but in many cases, i think that reason for the surplus is not necessarily because of the wrong relative prices but because the recent flow of the domestic economy growth. and of course the classic call answer to this is, okay, exchange appreciationuation. because you have the exchange

rate appreciation and switching impact. if they go that, i think as i mention they need to appreciate too much. the policy they are trying to pursue is why not letting the account surplus go out of hand. they are trying to boost domestic consumption and not necessarily through microeconomic policies using the exchange rate. while it's the part of the equation. we are trying to go it structure reform. and the problem there is because different countries have different problems. there's a misunderstanding of, you know, the reform are being implemented or not. and this is the key issue we are discussing at the g20 level and the australian presence this year. the single most important theme that we will be discussed is grows strategy bhap are the right reform that will actually

ensure fast recovery in all the g20 members. and hopefully by the end of the year we'll have some answers. [inaudible question] so before you give up the

microphone, your first question? >> economics. -- [inaudible] >> right. [inaudible] [inaudible question] the information how do you know that i know? [laughter] okay.

i don't believe what my colleagues told in japan. i don't think there are -- they aware of what individual

reforms, even if successful will do in term of enabling long-term growth. it's jond l normality. that is all i can say. the point i was trying to make even before you go to the sort of era what i'm concerned is that if the financial market encounters stability the worst effect may refer to the -- and that could have disruptive impact. term of the tampering as i alluded to certainly things go as planned and by that what, i mean, is the pace of tampering will take place in such a way that it is well faced with the strengthening of fundamental in the u.s. economy. if that happens, nothing will -- [inaudible]

replacing liquidity with -- so that's the baseline. on the other hand, if that doesn't place and somebody goes wrong and obviously it become an issue there will be flight safety and this time may not include it and only include if that happens cups obviously like those which group it was but i would put india as one of the groups that would refer back to the lower potential i don't think that -- again, i'm not an expert in india. based on my conversation with my colleagues what i was lead to believe is that india was enjoying or the of a temporary boost from liquidity marc economic policy, but even if the

liquidity from the market doesn't seem to indicate that has actually build up systemic risks. and thus it may revert back to more stable somewhat lower potential growth than any significant disruption. there are other cases but i don't want to mention the country's name. i think the classic call imf program may be -- >> sure. any other questions? [inaudible question] you think the structure reform are another option. how about another direct tool with the fiscal policy. can you e will be -- elaborate on the --

[inaudible] could you share -- the boost fiscal spending in the near term? i think korea's policy is already reviewed potentially. and the position we have taken and made public through the g20 process is we take flexible approach in the short run. and consolidation over the medium term. that's our position. how you want to interpret that, women, you may have already noticed that the actual outcome the fiscal position relative to the initial plan has been relaxed already for the last year. and the path has been accordingly adjusted. i don't think we have changed our position from the last summit where opposition was made very clear.

i i have a question and i want chairman choe to come up and give a remarkses. what are the indicators that government -- a government, may be too aggressive in interceding in the economy? >> interceding -- that's correct. the sciences the government may be too aggressive. >> that's correct. >> can you be a little bit more direct? >> yeah. because there's a -- you were asking for something and i'm not quite sure. i assure it's not a trick question. [laughter] the debate taken place over at the states is that the government should step back. a lot of economy the opportunity through the free enterprise

system to recover sits opposed to one stimulus from the other ands it's a big ghat continues in this country. and so at what point are there any indicators in your mind question -- questioner in rick in interhave a convening in the economy? well, what i can tell my view in the short run if the economy sluggish and the government does not engage in expansion their policy the, i will as political intervention. in order, if you can see clearly there's -- [inaudible] maybe that's too little intervention. the other extreme if you see inefficiency building up in

sectors, still the government does not slow its -- intervention or inflounce in resource allocation in the case i see as excessive intervention. the latter is usually found cases where a country is emerging from low-income or developing to more middle income group where the economic structure i.t. is becoming a little bit too complicated for the government to be able to plan itself way forward. >> that was a good economic answer and good political answer. >> i think that's -- [inaudible] [laughter] the political answer? well, i think you should answer that question. >> okay. okay. we can do that another time. obviously there's a lot of discussion going on as to whether or not the and the

qualititive easing every time the fed decides it wants to back away from it. some kind of a ticker brought on in wall street some get excited. some don't. it's not your problem in korea. it's the problem here in united states. and i thank you for sharing with this the insights here. schairm cho, why don't you come up. he's the chairman of the -- [inaudible] i have to ask my staff to give me a better spelling here. [laughter] i'm not sure -- a couple of remarks. the perspective on the korean

economy. over the last half century has been nothing short of spectacular. and the korea economic is not just in the past. it's expected a continue in the future. foreign affairing magazine recently selected south korea as one of the six hot market global investors watch over the next -- [inaudible] it is true korea faces a range of tough challenge. they include domestic factors such as aging population and the widening world gap and external such as geopolitically unstable region. l i would like to not -- connection between the south korea exporting sector it's mainly composed large company

while the domestic sector is driven by small and medium-sized enterprise and the self-employed. global competitiveness they tend to look overseeing for the manufacturing basis instead of investing in korea where they believe the labor cost is too high. as a result, concern is being voiced that the exporting sectors contribution is not as much as it was a decade ago. conventional wisdom has it that korea's exporting sector is the engine of the korean economy. fortunately, the korean government is keenly aware of the challenge. since the president took office the administration has been focusing on the -- of a greative economic and

foster more vibrant start-up. and the government is pushing ahead with a barrier to the service sector. in conclusion, i would like to marcus nolan for international economic. south, korea, of course has proudly proved that expectations wrong. and since -- [inaudible] for years to come. thank you. i want to thank you. i want to make -- [inaudible] former colleague in congress. thank you. it's good to see you. remember of the 103rd congress. stand up. why don't you stand up?

[inaudible] it's not a question really, but a comment. i've been hearing in this presentation [inaudible question]

[inaudible question] [laughter] >> you have about two minutes. >> okay. [laughter] >> well, there's my no personal view because i haven't actually discussed it with anybody else. but my personal view is that the current economy, at the moment, is facing some difficulties like

any other cubs partly because we also have dependent on export and ex-- [inaudible] but given the policy that implementing at the moment i think i'm quite confident long and medium term that it will not come back with a negative return. particularly given the, you know, slow growth prospect in the rest of the world. so on a net basis a good flies invest, and i don't think that hopefully that threat for military threat for north korea is as serious as one might actually think. more recently kim jon un indicated the willingness to sort of talk with south korea government. then congressman, you are the expert in the political economy. [laughter] let me just stop here. >> i would concur. i was in korea last spring, and

it was whenever the united states has a joint military exercises with south korea, somebody in north korea gets bent out of shape. as i was there, i turned on the television, and a network, whose name i will not mention, was talking about south korea going to the subway and exercises for some type of a military assault on the north. the stores were jammed, the streets were jammed, i called my wife and said everything is fine. the -- the the, you know, continues but, you know, it's very interesting is the fact you're going see china when this is a lot of profit or anything china is very much concerned over what happened to kim jon un's uncle

because one of the reasons why he was executed was because a portion of real estate was sold, i guess, in the -- industrial area, and the chinese were amazed because that's the joint effort. ..

with the korean built cars and the korean named cars made here in america given the greater market share. so the alliance between the united states and korea in my view continues to grow stronger and in light of what's going on in north korea. so, well thank you very much for coming and sharing. thank you all for coming this afternoon. a. [applause] [inaudible conversations]

next journalist discuss cybersecurity issues and the impact of cyberwarfare on business, government and

individuals. we'll hear from correspondents and editors from "the new york times," "the wall street journal" and foreign-policy magazine. the forum was hosted by the brookings institution. >> i'm a fellow here at brookings and i am really honored and i'm really excited to celebrate the launch of pete singer and allan friedman's really interesting book which i have right here in my hand, cybersecurity and cyberwar what everyone needs to know. endorsed by everyone from the former commander of nato to the head of google, to the producer

of 24 and homeland. were going to talk about the big issues in cybersecurity so what are the policy implications and what are the policy responses and what can we do with ordinary folks? peter as i'm sure you all know is direct or of the center for 21st century security and intelligence here at workings. allan is now a visiting scholar at the cybersecurity policy research institute at george washington and was here at brookings for three years. and it's interesting to me, just to kick things off that this look is coming out now. we have sort of had it seems like a stream of cybersecurity stories, mishaps, events in the

last five years and so i guess i'm curious why you guys decided now was the time to sort of in a way kind of go back to basics and set the table and kind of lay out a primer for folks about what they need to know. >> i will weigh in on that and i first want to thank all of you for coming out. really appreciate it. it's an exciting time for us and that actually links to your question because a book is a journey. it's coming out right now but it's showing a journey of almost two years and the idea behind it and why we think it's particularly relevant right now is that i would argue there is no issue that has become more important that is less understood than cybersecurity and when i say more important, more important in terms of its

policy implications whether you work on classic military issues, national security issues to legislative questions to the business side. to your own role as a medicine but also as a citizen. another way of putting it the issues that are at play here are as weighty as the future of world politics to as important as your own personal privacy or your kids and what they are doing on snapchat or the like and there's a gap there in the gap can be seen in lots of different ways. we can see it in the former director of the cia described it as he is never dealt with an issue where there was less knowledge among the people around the table making decisions to 70% of business executives have made a cybersecurity decision for their company and 70% of cto's and css

are the exact general and no teaches as a management issue. the way we handle ourselves on line in terms of our favorites dori is probably the most popular password is still password followed by a 123456 which is you know the joke was that is what i use on my luggage but also again to how we handle all these different issues popping up right now whether the nsa or the like here the goal behind the book was to as you put it get to the basics. it's not back to basics because we never got to basics in the first part so to give you an easy-to-read primer of all the key questions are mabry thing from how does this all work to why does it matter to finally what can we do about it and to do it in for sizing what everyone needs to know because as long as we have the internet and we are using it we will have

issues of cybersecurity and cyberwar. >> allan seems to me 2013 was kind of the year of the leak in terms of cybersecurity. i don't know if you guys heard there was an inside contractor who got ahold of some documents. what do you see 2014 heading in what is the text landscape like and what are the big issues we face? what is 2014 going to be the year of? >> it seems like the past but more so so looking back one of the interesting things about 2013 was a think it was the first year that no major person in the policy world gave a speech that amounted to the problem with the internet was it was built without security in mind. the solution is to build a home internet at this time to make a secure so we are starting to move in this direction but ultimately we want to move from

an area where cybersecurity is something that is seen as unique and separate and cut new out of whole cloth into an issue that is now integrated where a manager can't just say i'm going to call my cyber guy. one thing i think we can expect to see it or to directors are going to start having briefings. they are going to say how our recovered? at the technical level we are going to see a lot more moving from just taking advantage of a human error and finding new challenges. one of the largest questions are always at the intersection of the technical and the economic and political. so who bears the responsibility for security? is that the manufacture of the phone? is that the manufacture the operating system or your cell phone company?

i think in 2014 those questions are going to come to ahead and we will see a lot of lawsuits and we are going to see a number of people trying to pose new text -- technical fixes. the challenge will be to make sure we don't fall for snake oil and work toward a quarter native approach. >> i'm going to ask a couple more questions of these guys because there are things i'm dying to ask them and then we will open it up to the audience so you get your questions ready. you know, both of us have sort of worked around the pentagon types for a while and it always seems like a answer to any cybersecurity question is more offense, and you know if we are being hacked and the answer is to hack them back 100 times more first of all do you see that trend continuing in the government that everything has got to be about offense and secondly does that trend so far make any sense?

>> it's a good question and it's a big question of consequence. when we think about not just what we are -- but the potential for it to spiral out into directions that we don't want to or we lose control. so this notion of cyberoffense is very appealing. it's appealing in terms of just how it sounds. if someone attacks me i will attack them first or the best way to defend yourself is a good offense. we can see it in its implications and the assumptions we are starting to bake into our military doctrine that's out there. for example there's a pentagon statement that says that in this cyberspace, in cyberspaccyberspac e that offense will predominate quote for the foreseeable future. that's the pentagon's assessment. there's a series of issues without. the first is actually cyberoffense, a chew cyberoffense, and affect it one

as stuxnet type and the next and we will hear from experts on the to do something like that is quite difficult. it's not as if we have seen senior pentagon officials describe where they are raising a couple of teenagers and this is their quote sipping red old wearing flip-flops in their parents basement could pull off the weapons of mass destruction style event. no, they couldn't. there is very real cyberthreats out there but to do some of the more effective stuff it's not that easy and also the defender actually has a series of steps they can take to make cyberoffense difficult. what i'm getting at is that it's not as easy offense. the second is when you start to connect both the technical side to the military side to the policy side to the history side you see some lessons crossing back and forth. so for example every time in

military history where someone has said the military offense will be dominant actually history had a great way of teaching them that it played out the opposite. prior to world war i with a really good example of this. the next problem is where do these assumptions sometimes take you? and we have seen this in what we are spending on right now. the u.s. military, depends on which study but roughly 2.5 to four times as much on cyberoffense research as they are on cyberdefense research, which one has certain implications for instability but also if you go back and connect to security studies is a lot like thinking that the best way to protect your house, your glass house romm a gang of roving teens is to buy a stone sharpening kit. and that is the implication. we need to come to balance not

only in how we talk about it and how we assess these threats but also balance in what we are spending on and how we approach it. >> just or make political perspective one of the things that i think is a novel aspect of the international conflict perspective is when we talk about attacking their systems and they talk about attacking our systems, they are the same systems. we are using the same plot forms and so often we are faced with the decision of do we exploit the other guy or do we work towards defending ourselves? when you start to realize actually it's not just us versus them, it's us to find many different ways and a whole lot of different them's review need to have some equilibrium where we tipped towards the defense and emphasize the fact that we are all better off if we move towards a more secure posture. >> the same story which is a think one of the reasons why a lot of people are outraged is they are not just undermining

accessing e-mail accounts of a couple of terror suspects but they are sort of undermining the fundamental security protocols that work for all of us. >> i think that's a key point and we don't want to overstate. there's a headline in the "washington post" this weekend that says the nsa is trying to break all of our codes. that is kind of their job. their job is to be a foreign intelligence operation. the challenge is how were we going to scope it and how well is this playing with other national rarities? and we want to make sure that other national goals for diplomacy, for commerce and. are balanced in the government's process and i think that is why a lot of americans are upset and people around the world said what does this mean for us? should we be doing this as well and that doesn't lead to a very stable world. >> peter, i will just be personally. i think pre-snowden and i was

doing some policy work here, and frank lee or relied on trust in the governmengovernmen t that i feel like i can't take anymore after the snowden leaks. maybe you could talk to me a little bit about how those leaks are kind of affecting policy prescriptions across-the-board? >> i think the challenge of what was disclosed is the massive scale of it brought together a variety of things and so when we are talking about the leaks i categorize them in three types of activity. the first was smart, sensible espionage against the american enemies. there is a series about goodies that were disclosed that way. the second category i would put in terms of questionable. legally questionable, political

questionable, basically efforts that involve u.s. citizens through some way be it via a fuzzy legal definition, a technical back door, using a foreign effort that basically is the category of questionable. and to be blunt and direct a third category that we could call on strategic or stupid which is collecting intelligence on close american allies. the challenge is that we have these three categories that are out there so when people talk about this issue and how either upset they are about what the government is doing or a set they are with snowden and should he get clemency or not, and we usually focus in on what are those categories categories and interned it affected the way we talk about it. we have defended these programs in public where much of what matters in the u.s. legal discourse is category 2, the legal questionable stuff is saying not to prevent another

9/11 doesn't make angela merkel and the others feel good about it because they are in category 3. the real effect is not in terms of how we exchange political discourse but the long-term impact of it is probably most going to be felt i would argue in two ways. one, on american business for technology companies which at least according to our report from forester will lose as much as $180 billion worth of revenue because of disclosures around these activities. that is why they are so each. the second is and it goes to one of these 2014 questions, is the ongoing debate over the future of the internet itself and its governance which in the book we talk about these issues and looking at the itu, these questions around internet freedom and frankly the internet freedom agenda that the state department has been pushing

feels almost dead right now. we have sort of lost their swagger and in the year ahead these are big decisions to make. my worry is that the accommodation of us using -- losing our swagger and internet freedom issues combined with may have lost certain key swing states that were with us previously and so my fear is that if we don't watch out in the year ahead, the internet that all of us have grown to know and love will not be the ones that are kids inherit. >> and that's because of why? explain that. >> is the idea that they they're very different visions about the internet and how it should he govern so to speak and what should be the role of states versus multi-act your layer of responsibility, weirdly but wonderfully in formally set up right now that his work so well and we are particularly seeing this push by authoritarian states. another way of putting it is if

you like the way that russia black to sit 82,000 web sites, so when you enter an address and it doesn't go where you want, that very much could be the future for don't watch out. that's different than the nsa where you talked about which is the monitoring. it's two very different state problems but in the politics of it they have gotten wrapped together. >> that's exactly what we have been tying together. so you have genuine concern about the process that peter mentioned and that's a very ad hoc which i think to be fair does seem to hew closely to american interests. we have set up this organization and it works well although if you look at the organizational structure on paper from a political perspective you say well that's not there and let's move to a more representative style for every country gets in and while that may sound from an good from an organizational point the consensus seems to be

is really going to empower two types of countries, those that want to throw up their ears around their own national networks for national security reasons and how they define their own national security and countries that want to throw up their ears for economic reasons that want to build out to the telecom monopolies. this discussion has been sort of really pushed last december in 2012 and came to a head at a conference and the united states and its allies including brazil really held off and lost the vote but maintained enough to keep the status quo working. and i think if that vote had been taken shortly after the snowden leaks, i don't know how many european aileen -- allies would have voted with america so the real risk is the internet where each country sets up not only its policies at the network level but says lesson we want to make sure that our technology is in the network and

in the computers. we are going to have national level policies about what kind of cryptography we can use or how you stay or your data. that means everyone is making this technology needs to make a separate chip for each country. that really is going to hurt innovation and sort of change how the cyberspace evolves. >> two things on the domestic side links to classic cybersecurity questions and one is what this has done to the politics of cybersecurity on capitol hill where look, we haven't had major cybersecurity legislation passed since 2002. that's five years before anyone heard of the iphone and because of this and a number of other factors it will be another year at least before we get anything around it as we have this whole other bundle of questions that just got tied into it. the other goes back to original idea of trust and its trust in the computer labs and in silicon

valley, which you know i met with a senior leader at a silicon valley company who described that they felt they were now in an arms race with their own government, with the u.s. government. in the same when it comes to -- in the book we talk about the importance of finding the i.t. folks and how do we deal with his human capital problem with cybersecurity wax now some of our government agencies have a major issue. at the same time we need to do a better job of recruiting cybertalent by one measure. we are only getting 10% of the cybersecurity professionals that we need. that's going to be more difficult because of the tenor around this topic. >> if i could take some questions from the audience. please phrase them in the form of a question, not a rant, statement or diatribe. that means it needs it question mark at the end or have your voice turn up at least at the

end. starting here in the front. we have got a mic for you here read it's the i am jim paine with a local contracting vendor's dna. i want to pull the thread on the internet governance. it says this is as much as a threat as a physical attack on the internet so my question is this what they question mark. where neat administrations is this issue of the internet governance reside? who sets the policy? many people believe that the current i can model is too u.s.-centric so as we need to involve wearing the administration and what organization and agency does this reside? >> like a lot of cyberissues, they really covers a lot of ground because the question of internet governance covers everything from how do we get domain names are top-level domain names so we are moving from a world where everything was either at dot.com or it .uk

to now anyone can have their own domain, that's a trademark issue about thoreau questions of how do we secure that domain system or alec tate the remaining ip addresses because we are running out. and those cover very different issues. traditionally this has been the department of commerce which has the contract to negotiate what is called the head of the internet with the domain system. in the book there's a nice graphic to help you understand it. what passed administrations have been successful in doing is working to make sure this is an purely an american question but at the same time your facial questions of who is going to be in charge locally is a question of international diplomacy for people on either side of that is predominately residing in the state department. >> part of the challenge when it comes to the policy and the strategy here is to key words,

ignorance and imbalance. ignorance, senior policymakers, the older other truly can make decisions are not well-equipped to deal with these issues and we have got all the wonderful grade and goats in the book on this whether it's a senior dip or mad about to negotiate with the chinese on internet issues who asked us what an isp was which is a lot like going off to negotiate with the russians in the cold war not knowing what an icbm mess and i'm not mocking this but my mom also doesn't know what an isp is and does know what an icbm is even though one is clearly more important. my mom who is a nurse, to the former secretary of homeland security who proudly talk about the fact that she hadn't used

e-mail or social media for over a decade ago she didn't think it was useful. we could go on and on with all these examples. you've got that level of kind of ignorance and it's just there at the imbalance site is also there. it's there and when we talk about the threats, you know that this may be as big a policy issue as there is and yet that's not talked about when it comes to actual cyberattacks as opposed to a structural problem. i would argue that the massive campaign of intellectual property theft going on against the u.s. right now maybe as much as a trillion dollars worth of value lost, that matters far more than the narrative that's out there at half million times we have talked about cyber9/11 or cyberpearl harbor at the 31,000 news and magazine articles that have been written about cyberterrorism despite the fact that no one has actually been hurt or killed by cyberterrorism. in the book we joke it's a lot

like shark week where we access about sharks even though you are 15,000 times more likely to be hurt by your toilet. the reality is a shark has hurt someone unlike cyberterrorism. squirrels have taken down the power grid more times than the zero times that hackers have so we have this imbalance in the threat but also how we structurally respond whether it's her spending when it comes to budgets and the more focus on certain agencies to the decision-making question and the white house you have got 12 people on the national security staff the nsc working cybersecurity questions. you have got one on the economic side who also by the way has responsibility for things like copyrights etc.. so we very much need an approach that is both informed and balanced.

>> the next question over here. >> thank you. richard downey and thank you for a very interesting discussion. you mentioned a little bit about corporations and how they protect, how well they are or are not detected. intuitively you would just assume that large corporations are banks that have lots of resources would do what was required to protect themselves against these kinds of threats. and i have seen this, it's a cybersecurity maturation model that measures how prepared either organizations or countries are against these kinds of threats and essentially an ex-wife axis zero starting his defenseless and the curve goes up to defenseless which is if you get an attack he can defend against it easily. i wonder if you can talk about in general how along that curve, hopper bar -- prepared you have found

corporation banks to be in preparation against these kinds of threats? >> think the spectrum you are referring to is the -- there are a number of approaches like that. you know it's funny that you use banks and major corporation because i think that helps us understand the issue a little bit. probably the leaders in both developing defenses and working together to understand how their risks are interconnected as the financial year. why? because the financial sector faces very real loss, threats from criminals. why do you go after banks? that is where the money is. so the financial year has learned to work together develop their defenses and also understand it from a risk perspective. they don't have to stop every single attack. they have some models to understand the relationship between how much to invest in what they get out. most companies in the broader economy don't